Bitcoin Halving for Beginners

Bitcoin Halving for Beginners

2020 is off to a rough start with multiple difficulties attacking humanity’s peace in different sectors including environment, economy, politics and the hardest hit of all, our health. For the past few months, the Coronavirus pandemic has caused major setbacks in our daily life’s routine and not to mention, the paranoia of being violated by a dangerous virus.

It’s not completely bad

There is a silver lining from this bad cloud. Air is getting fresher as “appreciation” washes over our daily outdoor activities that we took for granted. However, morning coffees and delicious pancake breakfast at our favourite diner can wait until the virus blows over. In the meantime, as suggested in our previous article last week, make the most of your extra time. You could finally start investing in cryptocurrency and lucky for you, this is the perfect time.

‘Tis the season for Bitcoin Halving

As you know, new Bitcoins come into the world as a reward for miners whenever they mine. Halving or ‘Halvening’ is a period of time when Bitcoin’s block subsidy cuts the bitcoin block reward in half. The Bitcoin halving was designed by Satoshi Nakamoto to keep Bitcoin’s inflation in check. What will happen is, every time a Bitcoin halving occurs, miners begin receiving 50% fewer BTC for verifying transactions.

How does that work?

Every 210,000 blocks mined which roughly take around 4 years, the halving of Bitcoin’s block subsidy occurs. This rare occasion will continue to occur every 210,000 blocks until there’s nothing to be mine as the supply of Bitcoin is finite. The Bitcoin Halvening is expected to happen in June or May this year.

What will happen during Bitcoin Halving?

Some believe that there is a price impact on Bitcoin after Bitcoin Halving which will either drive the price to increase or be unaffected at all. What’s certain is miners will be receiving lesser rewards as years go by. This dynamic can be explained with 1 simple theory – Law of Supply and Demand.

When was the last Bitcoin Halving?

  • 2012, Nov 28 – Bitcoin’s block subsidy dropped from 50 BTC per block to 25 BTC per block.
  • 2016, Jul 9 – Bitcoin’s block subsidy dropped from 25 BTC per block to 12.5 BTC per block.
  • 2020 – ?

Now that you have learned more about Bitcoin Halving, what will you do?

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