What Bitcoin halving means?

What Bitcoin halving means?

In this article, we are looking to examine Bitcoin halving.

What Bitcoin halving means?

According to Finextra website: Bitcoin’s 2020 halving took place today. This happens around once every four years and is of much interest to cryptocurrency investors due to the profound effect halving has had on the cryptocurrency in previous occurrences.

Halving refers to the number of coins that miners receive for adding new transactions to the blockchain being cut in half.

This will now diminish from 12.5 bitcoin to 6.25 and will halve again every 210,000 blocks until the last bitcoin is mined in 2140.

Previous halvings have been followed by bull runs that saw the meteoric increases in bitcoin’s value, most notably in 2017, following the reward decreasing from 25 coins to 12.5 in 2016.

“Based on what we’ve seen historically, the expectation is for the next bull market to form following this halving event,” Simon Peters, analyst at eToro, says.

The theory around this is simple supply and demand: the fewer bitcoins that are being created, the more valuable those in existence are.

When is Bitcoin halving 2024?


Why bitcoin halving?

Bitcoin is halving set to occur on May 11, 2020, at around 4 pm est. To explain what a Bitcoin Halving is we must first explain a bit about how the Bitcoin network operates. There is also the question of whether Bitcoin will be at the same price by 2021.

Bitcoin and its blockchain are basically a collection of computers, or nodes, around the world that all have Bitcoin's code downloaded on them. Each of these computers have all of Bitcoin's blockchain stored on them. This means that each computer has the entire history of Bitcoin transactions, which ensures that no one can cheat the system as every computer would deny the transaction. In this way, Bitcoin is entirely transparent and no one can make a transaction without everyone seeing it happen. Even those who do not participate in the network as a node or miner can view these transactions taking place live by looking at block explorers.

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Will Bitcoin go up after halving?

The May 2020 halving is different from the previous two events because it is happening against the backdrop of the coronavirus crisis.

“This bitcoin halving will certainly be different to the last, as Satoshi Nakamoto’s economic system will have the opportunity to prove its resilience and strength in comparison with traditional Wall Street protocols,” said Andy Ji, co-founder of Ontology, the public blockchain and distributed collaboration program.

The COVID-19 pandemic has shaken the global economy and forced governments and central banks across the globe to add trillions of dollars of stimulus to the financial system.

The global economy was in relatively better shape when the cryptocurrency experienced its second supply cut in July 2016. Notably, China’s producer price index, or factory-gate prices, bottomed out in the first quarter of 2016 and turned positive in September of that year, triggering a reflationary bull market in commodities and equities.

Put simply, people currently have a strong reason to search for alternatives like bitcoin, which are getting scarcer with every halving. As a result, notable price dips, if any, could be short-lived and the odds of bitcoin setting new highs next year look strong.

“Amid the deteriorating economic outlook for the U.S. economy and the likelihood of an ever-increasing monetary supply, which weakens the dollar and stokes inflation fears, we believe it could easily test previous highs above $19,000 as investors look for safe havens away from traditional assets,” said Simon Peters, a crypto asset expert at global investment platform eToro.

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