Bitcoin-Block Reward Halving Countdown

in #bitforexlast year

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Introduction

The halving is coming!

It is no secret that the market capitalization of the patriarch of cryptocurrency exceeds the total capitalization of all other blockchain ecosystems. Therefore, any significant event in Satoshi Nakamoto’s project—especially the BTC halving of 2020—attracts the attention of the blockchain community.

Many crypto enthusiasts have high expectations for this coin. In their opinion, the halving will be a catalyst for meteoric price gains of the digital gold, which will positively influence the crypto industry’s current situation.

Security

Virtual currency is a revolutionary tool, and it has a big future ahead of it. However, its reputation has been stained due to severe cases of fraud. The block reward being cut in half helps to get rid of the most inefficient mining farms.

The history of the development of the first-ever digital asset beneficially affects its cost in the long run. Central banks are powerful enough to print as many rubles, dollars, or euros as they want. The Bitcoin software code, however, has a maximum limit of 21 million coins. Halving protects this internet cash from inflation, making it similar to gold rather than regular money.

In the beginning, 50 BTC was paid to miners for each block, and the virtual currency cost almost nothing. This situation is a relic of days gone by. Over many years, two halvings of the coin with a stellar reputation took place: one on November 28, 2012, and the other on July 9, 2016. As a consequence, the compensation decreased to 25 BTC and then 12.5 BTC. Now, after the approaching halving of 2020, only 6.5 BTC will be paid per block. That is about $42,500 US. Not bad, right?

The higher the BTC price, the more profitable the mining. The event that can dramatically change the value of the first unregulated digital currency encourages the development of more efficient equipment and software for mining and storage, thereby increasing network security. The more reliable the system, the more promising the digital cash as a monetary instrument. The demand is also mounting.

BTC uses a proof-of-work (PoW) algorithm to make changes to the UTXO set more difficult. This algorithm eliminates the need for confidence-building and creates external costs for any potential bad actor. Miners pay for expensive hardware and electricity, expecting to receive a reward for the extracted blocks (based on their accomplished work). The prize financially motivates miners to act fairly and squarely.

The reward value is skyrocketing with the growing price of the virtual cash. This situation alone encourages those who keep the record of your payment to increase the hash rate. The higher the hashing algorithm speed, the more expensive it is for criminals to carry out attack 51%. It’s worth mentioning that attack 51% will not “kill” Bitcoin because the re-recording of the transaction history requires considerable efforts.

The Buzzword That Most People Have Heard but Few Understand

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Deemed as the rate at which a price rises, inflation can be caused by an excessive increase in the supply of paper money, leading to its depreciation. In this regard, the brainchild of Mr. Nakamoto has an absolutely different structure than that of traditional currency.

The current digital gold’s inflation rate is currently only 0.01%. The highest rate was in early 2014 (0.038%). Many remember December 2018 for the record low level of inflation (0.009%). If that doesn’t get your brain melting, then how about this: the inflation rate in Venezuela is 268,867,000 times that of BTC. Now think about diversification. You could destroy the crypto network and the internet, amounting to the suicide of civilization. But, you could restore it with just one saved copy of the blockchain.

The volume of coins is fixed, and it is impossible to forge the digital asset.

Crypto Enthusiasts’ Forecast

What will happen right after the next halving? Will this remarkable event lead to another bullish cycle or weaken the BTC ecosystem?

A great many cryptanalysts believe that the BTC exchange rate will reach a new historic high of $20,000 this year. Their forecast is based on historical facts. Halvings have already been carried out twice, and every time the price of the coin only gets higher.

Fran Strajnar, the co-founder and CEO of Brave New Coin, outlines his even more optimistic vision of the halving. According to his forecast, the digital gold will sell for $200,000 per coin at the year’s end. He refers to the inverse relationship between supply and demand. Bitcoin quickly gained a reputation as the most popular coin, and reducing the issue of coins will bring about a shortage and, therefore, a value increase.

Undoubtedly, no one can guarantee 100% accuracy of certain predictions, but the general trend in the electronic money market indicates the strengthening of BTC. The dizzying buffet of alternative cryptocurrencies is unable to compete with the king of crypto.

The Bottom Line

The halving of 2020 is a deeply significant event, and the consequences are almost impossible to predict. But mark our words: panicking is not something that we have to do. If the halvings of 2012 and 2016 did not lead to a disaster, then it will not happen now. If the periodical reduction of the block subsidy will not be different this time, then why bother? Even the most nightmarish scenario will not lead to the crypto industry collapse.

Presumably, BTC is going to stabilize for a while, afterward, it will grow slowly but confidently. There are new heights to conquer. Satoshi Nakamoto’s project will survive the era of paper money dominance and take its place in the new financial and economic system. Bear in mind the story of 2 pizzas for 10,000 BTC. Take your time selling your digital asset, it is promised to be mounting in price in the near future.