Cryptocurrency enthusiasts worldwide are keeping a close eye on Bitcoin’s price chart, as the next halving event is right around the corner. What is Bitcoin halving, and why does it have such a big impact on the crypto market? TRASTRA Explains everything you need to know about this crucial event in the history of Bitcoin.
What is Bitcoin (BTC) Halving?
Bitcoin halving is an event when the number of mined blocks reaches 210,000, and the reward for each block mined by miners gets reduced by half. The current reward is 12.5 BTC per block; after halving, it will become 6.25 BTC. This process happens approximately every four years, and the next Bitcoin halving is scheduled for May 2020.
This event is significant because it helps keep Bitcoin‘s inflation in check. When Satoshi Nakamoto created Bitcoin, he designed it so that there would only ever be 21 million BTC in circulation. The halving events are part of this design, as they ensure that the supply of new Bitcoins coming into the market is reduced over time. This makes Bitcoin a deflationary asset, which is one of the key reasons why many people believe that it has the potential to become a global reserve currency in the future.
How does the Bitcoin block halving work?
The Bitcoin halving process is actually quite simple. Every 210,000 blocks (approximately every four years), miners’ block reward for their efforts gets cut in half. So, if the current block reward is 12.5 BTC, it will become 6.25 BTC after the halving.
This may not seem like a big deal, but it actually has a major impact on the crypto market. That’s because the halving event reduces the supply of new Bitcoins entering the market, which tends to drive up prices.
It’s worth noting that the halving doesn’t happen at exactly four-year intervals. That’s because the time it takes to mine 210,000 blocks can vary depending on the overall hashrate of the network.
The reason for this is that the difficulty level of mining adjusts every 2,016 blocks (approximately every two weeks) to ensure that a new block is mined approximately every ten minutes. So, if the network’s hashrate increases, the difficulty level will adjust upwards to make it harder to mine new blocks and vice versa.
As a result, the 210,000 block mark can be reached a little bit early or late, depending on what’s going on with the network. The last halving event occurred in 2020, and the one before was in 2016.
What Happens When Bitcoin Halves?
When the halving occurs, there are a few things that happen. First, as we mentioned, the block reward for miners gets cut in half. This means miners will receive less BTC for their efforts, which can impact their profitability.
In the past, some miners have even been forced to shut down their operations due to the halving event. That’s because their profits can drop below the level where they can cover their costs, such as electricity.
Of course, this also impacts the overall hashrate of the network. When miners are no longer profitable, they’re likely to stop mining, which will cause the hashrate to drop.
The good news is that, so far, the hashrate has always increased after a halving event. That’s because the price of Bitcoin also tends to increase, which makes mining profitable again for those who have stayed in the game.
It’s also worth noting that the total supply of BTC doesn’t actually change when the halving occurs. That’s because there are already a large number of Bitcoins that have been mined but are not in circulation.
These are known as “lost” or “unspent” Bitcoins, and no one can access them. As a result, the actual increase in the circulating supply of BTC is usually much less than what the halving event would suggest.
Does Halving Have Any Effect on the Bitcoin Price?
The simple answer is yes. The halving does have an impact on the Bitcoin price. In fact, it’s one of the key factors that many people believe will lead to a major BTC bull run in 2020.
This is because the halving event reduces the supply of new Bitcoins in the market. This, combined with the increasing demand for Bitcoin, increases prices.
Of course, it’s worth noting that the halving is not the only factor that impacts the Bitcoin price. Several other factors, such as global economic conditions, can also influence the price.
Nevertheless, the halving is still a major event in the Bitcoin world, and it’s one that you should definitely keep an eye on.
When is the next Bitcoin Halving?
The next Bitcoin halving is scheduled to occur in May 2024. This will be the third halving event in Bitcoin’s history and could have a major impact on the crypto market.
So, if you’re interested in buying Bitcoin or other cryptocurrencies, it’s definitely something you should keep an eye on. Who knows? The next Bitcoin bull run could start right after the halving event.
Summary
Bitcoin halving is an integral part of the Bitcoin protocol, which occurs every four years. Miners are rewarded with new Bitcoins when they successfully mine a block, and this reward is cut in half every 210,000 blocks. The next halving event will happen on or around May 2020. So far, the effects of bitcoin halving have been largely positive for the network and its users. TRASTRA has all the answers for you about what to expect from the next bitcoin halving event – head to our blog to learn more!
FAQ
What Happens When There Are No More Bitcoins Left in a Block?
When the last Bitcoin in a block has been mined, the miners will still receive a reward for their efforts. However, this reward will come from transaction fees instead of new Bitcoins.
Transaction fees are paid by users who send Bitcoin transactions. These fees go to the miners who process the transactions and secure the network.
Why Are Halvings Significant?
Halvings play an important role in Bitcoin’s monetary policy. They help to keep inflation in check and ensure that the Bitcoin supply grows at a predictable rate.
How many Bitcoin Halvings are left?
The next halving will occur in May 2024, and the one after that will happen in May 2028. After that, there will be one more halving in May 2032. After that, no more halvings are scheduled to occur.
