Bitcoin Halving: What You Need to Know and How Does It Affect Price
Bitcoin halving is when the speed of new bitcoin production is halved, which occurs every 210,000 blocks mined OR every four years.
Originally, when the Bitcoin first created, the rewards for each blocks mined is 50 BTC. The last bitcoin halving on last May 2020, bitcoin miners will receive 6.25 BTC per block mined.
History of Bitcoin Halving
Reward before: 50 Bitcoins
Reward after: 25 Bitcoins.
Reward before: 25 Bitcoins
Reward after: 12.5 Bitcoins.
Reward before: 12.5 Bitcoins
Reward after: 6.25 Bitcoins.
Reasons Why Bitcoin Halving Is Important
The explanation for this is to maintain a long-term sustainable circulation, which is expected to last until the year 2140.
Halving is noteworthy because it marks another decline in Bitcoin’s diminishing stock of finite. The total maximum supply for Bitcoin is 21 million. At the time of publishing, there are 18,551,075 Bitcoins currently in circulation, with just 2,448,925 Bitcoins available to be published via mining incentives.
In addition, if we follow the relationship between the shortage of gold extracted from the earth was cut in half every four years. If the worth of gold is dependent on its scarcity, so the “halving” of gold production every four years will technically raise its price.
When any bitcoin has been mined, the miners will be credited with the transaction processing costs that the network users will pay. These payments mean that the miners also have an opportunity to mine and keep the network running. The theory is that competition for these payments would allow them to stay low after halving has been achieved.
A block is a file that contains 1 MB of bitcoin transaction details. “Miners compete to create the next block using advanced hardware to solve a complex mathematical puzzle, generate a random 64-character output called “hash,” complete the job, and lock the block so that it can’t be changed.
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