Important information about Halve Bitcoin, the development of the price of the digital currency and the outlook for the coming months.


What’s this? Halve Bitcoin?

The Halve Bitcoin It is an event that is to take place in the digital currency network each time a total of 210,000 transaction blocks are processed, which take place every four years on average.

This measure implies a reduction in the margin again Bitcoins Generated by the network every time a transaction block is processed that takes place every 10 minutes. This reward is aimed particularly at the mining community as an incentive to support the network. The funds are obtained from the mining device, which performs the appropriate calculations, and with the code required to compile the transactions performed by the users.

Originally Bitcoin It is programmed for a total of 21 million tokens. The only way to generate new assets is through mining. Therefore, only the operators of the devices are able to produce funds. BTC because of the work they do.

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What’s this? Halve Bitcoin?

This reduction in the reward range is a measure envisaged in Satoshi Nakamoto’s original plan to operate Bitcoin, The aim is to ensure the sustainability of the digital currency and its network over the years as current assets continue to increase in the market.

since Bitcoin There will be a limited number of tokens in circulation. The reduction in the reward margin is intended to guarantee and emphasize the deflationary properties of the digital currency. To achieve this, increasing acceptance is predicted over the years and a principle of reducing supply and demand is applied which would lead to an organic increase in the price of cryptocurrency over the years.

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How many Halve has had Bitcoin? What is the reward range?

Since the start of network operations in 2010 Bitcoin wears a total of two Halving, Reason why the reward range has changed as follows:

  • For the first Halve This took place on November 28, 2012 in block 210,000, and the profit margin for the mining community increased from 50 BTC to 25 BTC.
  • The following Halve took place on September 7, 2016, when the 420,000 block was processed, resulting in a reduction in the reward range of 25 BTC until 12.5 BTC.
  • The next Halve will take place on May 12, 2020 during block 630,000, and on this occasion the reward range will go from 12.5 BTC until 6.25 BTC.

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What are the consequences? Halve for the ecosystem Bitcoin?

Although theoretically the reduction in the reward range in the network Bitcoin It only has a direct impact on the mining community every time it is new Halve There are important changes both in the markets and in the structural functioning of the network:

price of Bitcoin

According to both BuyBitcoinWorldWide.com y CoinMarketCap, the price of Bitcoin then experienced a steady and organic surge Halve occurred in 2012 and 2016:

  • For the Halve In 2012, the value of the digital currency on that day was approximately $ 12.35. Six months later Bitcoin It rose to USD 127, exceeding what was seen before the rewards were cut by more than 1,000%.
  • For his part, for that Halve 2016, Bitcoin it was cited at around $ 650. The digital currency was then quoted at $ 758 within six months, an increase of more than 15% over that date.

In this regard Halving, The price of the digital currency already exceeds USD $ 7,500 and continues to increase over the days. Analysts are assuming what happened in earlier cuts and, given the growing acceptance of the digital currency, expect it to do so in the next six months Bitcoin could see organic value growth.

Given the high volatility that the digital currency is exposed to and the number of important events that could be critical to its future, there are currently no clear ideas about the estimated value it could register. Bitcoin after that Halve in May 2020.

Mining activities

Contrary to what can be seen in the price of the digital currency, history shows this Reductions in the reward range are noticeable in mining activities. The fact that the profits intended for the operators of mining equipment are reduced affects in particular the sustainability of this activity, since the operators have to bear the costs for the power consumption, the bandwidth and the price for special hardware.

As reflected in the graphics in terms of the levels of Hash In the network, two important phenomena occur in every halving:

  1. Rebound in the levels of Hash before the Halving: Before reducing the reward margin, many operators see an opportunity to make a bigger profit by putting their devices into operation before this activity becomes impractical. So much is to be produced Bitcoin and save it until it dramatically increases in value.
  2. Drop level Hash once the Halving: After reducing the reward margin, the profit margin affects the profitability of this activity. Therefore, mining device operators with less processing power choose to turn off their devices hardware so as not to register any losses.

After these specific events and at the same time as the introduction of new, more and more powerful hardware, the levels of Hash They are increasing again as the mining community registers a larger number of operating devices, which are mainly located in mining companies that are operated on a large scale.

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When is the next one coming? Halve?

After the cut in the reward range scheduled for May 12, 2020, the next one is estimated Halve will take place in the first quarter of 2024.

When block 840,000 is mined, the reward range of 6.25 will increase BTC about 3,125 BTC, and it is expected that the digital currency will have a much higher value than what was seen for it Halve.

What other currencies have Halve apart from Bitcoin?

As such Bitcoin It is not the only currency that is programmed to reduce the reward range for the mining community.

There are currently other currencies based on the code used by Bitcoin, which included a series of operational changes that were aligned with the goals and philosophical foundations that support their respective proposals. These cases are:

  • Litecoin: This coin had hers Halve on August 5, 2019, with the miner’s reward range remaining at 12.5 LTC.
  • Bitcoin Cash: Alternative version of Bitcoin this regains its value as a payment system for products and services. Be Halve It took place on April 8, 2020 and the profit from mining activities was 6.25 BCH.
  • Bitcoin SV: Currency that is born as a fork of Bitcoin cash To follow ideals associated with Satoshi Nakamoto’s philosophy. The rewards were cut on April 10, 2020, leaving 6.25 BSV Profit margin for miners.
  • ZCash: The cryptocurrency, with an emphasis on operational privacy, will be its first Halve in October 2020 and the rewards will be 6.25 ZEC per mined block.

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Articles by Angel Di Matteo / DailyBitcoin

Collage picture of Pixabay


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