BTC Bitcoin Halving and its effects

You’re here to learn about Bitcoin. 

Before we begin, it’s important to understand how the halving affects the price of bitcoin. Let’s discuss the history of halving and other important topics in greater detail.

Bitcoin history is the history of Bitcoin blockchain and cryptocurrency. Bitcoin is a decentralized digital currency like gold, which is not controlled by any name national bank.  Halving is a process in which the number of new bitcoins created by miners each year drop from 50 to 25. It happens every four years and its effects on crypto market are various. Halving is defined as the reduction of supply and mining rewards paid to Bitcoin miners. It’s a process that applies to the Bitcoin protocol and its implementation in software, and affects the block reward that new miners will receive. Halving occurs every 210,000 blocks.

A Bitcoin halving is a block reward that halves in the space of two years. The Bitcoin halving is an event that happened on June 18, 2012 where the block subsidy was reduced from 25 BTC per block to 12.5 BTC per block. For this reason, new bitcoins have been added to the system only 4 times since its first use in 2009. 

The effects of a halving on crypto market and miners are quite visible. The price of Bitcoin has dropped from $19,000 in January to about $7,200 at the moment of writing this article. To make the situation worse, many major cryptocurrency exchanges that support Zcash have been hacked in the past days. And without enough miners there can be no transaction on the blockchain

The halving effect on crypto market is based on the assumption that bitcoin price will reduce by half if the new block reward is halved. The miners are given a fixed number of bitcoin that they can mine every day, which is presently 25 BTC. If this block reward is halved, the miner’s task will be even more difficult since their cut percentage fee will be reduced to 12.5 percent from 25 percent. As a result, many miners might leave the network as more and more miners are likely to leave.

A typical mining rig, which uses a lot of electricity, will halve the profitability of Bitcoin. This is due to a change that has happened in the industry and the factors behind it.

The halving effect, which occurred in 2017, is the latest hard fork in the history of Bitcoin. A little known detail is that after Halving and before SegWit2x, mining rewards will become more stable. The current bull run will rise to a new high because of this situation and we can see prices rising again by 8% - 10%.