BITCOIN MINING EVENT (BITCOIN HALVENING)
Bitcoin halvening
Bitcoin halvening is an event that halves the rate at which new Bitcoin is created. This event occurs once every four years. Many people in the crypto sphere know that Bitcoin supply is finite. That is one of the reasons why Bitcoin is referred to as digital gold. There is only a limited amount of it to be supplied. 21 million coins are expected to be generated. This implies that someday when the 21 million coin is generated the network will stop generating new coin.
Where are we?
Right now, there are about 18 million Bitcoin in circulation. This make a total of 85% of the total cap. But guess what! It does not mean that Bitcoin is about to reach its limit soon. Why? Bitcoin halvening.
What is Bitcoin halvening?
Bitcoin halvening is a protocol coded in the Blockchain system to make the process of generating new Bitcoin difficult. Do you know the reason for this..? From economics theory of demand and supply, the less the supply of a commodity, the higher the price, i.e., scarcity brings about increase in price.
Has this economic principle been true with Bitcoin?
Keep reading to find out…
So the halvening protocol cuts down block reward also known as mining reward in half.
So every time Bitcoin halvening occurs, miners begin to receive 50% of the former reward.
What is Blockchain/mining reward?
It is the amount of Bitcoin miners receive to every new block they add to the block chain
So how much Bitcoin do miners receive for each mine?
At inception, when Bitcoin was launched in 2009, miners receive 50 Bitcoin per block. In 2012 when the first halvening took place, miners began to receive 25 Bitcoin for each block. The second halvening took place in 2016 and miners began to receive 12.5 Bitcoin. The next halvening will lower the block reward to 6.25 Bitcoin. So when is the next halvening going to take place?
Based on the current performance of the Bitcoin system, the next halvening should take place between 10th and 20th May, 2020.
Here comes the big question..
So what will be the effect of this event on the Bitcoin sphere?
Will miners still be interested?
Will it affect Bitcoin price (rise or fall)?
Stay tuned for the next update where I will discuss and analyze the possible effect of the event and the significance in crypto sphere.
