Bitcoin halving is an event that happens when the reward for mining new Bitcoin is cut in half and superpower computers are used to earn or mine them to enter circulation. Moreover, this event is also known to cut the inflation rate of Bitcoin in half as per the rate at which newly the mined Bitcoins enter circulation in the exchanges. In order to know more about Bitcoin halving, first, we should have a clear idea of how the Bitcoin network works or operates.
Well, it is not that tough to understand as Bitcoin and the blockchain where it operates are basically a collection of computer algorithms or nodes that are circulated around the world by having the Bitcoin’s code embedded on them. Interestingly, each of the computers operating in the network has all of Bitcoin’s blockchain information stored in them. Meaning that every computer do carry the entire history of Bitcoin transactions that happened earlier, thus ensuring that no one could act as fraud and cheat the system since every computer would be able to oppose the transactions.
Moreover, Bitcoin is kept transparent so that no one could make any transactions without notifying other block members in the network. However, those who do not hold a position in the network simply working as a miner could also check the transactions happening in real-time by viewing the movement of other block participants. Another interesting fact is that every four years, Bitcoin mining rewards which are also known as “block reward” are also halved as well. Moreover, simply because of Bitcoin’s Halving event, less supply will be available over time, so the Bitcoin is made in a way that it is more likely to increase in value rather than decrease as found to happen with the fiat currencies.
Bitcoin halving has taken place in the month of May 2020 leading to a substantial impact on the cryptocurrency rates across the globe. However, after the number of blocks in the network hits the mark of 630,000 there can be an edifying fall from 12.5 to 6.25 in Bitcoin. Some interesting facts about Bitcoin halving in 2020 –
• Mining of new Bitcoin’s will be limited to 900 Bitcoin’s per day.
• About eighty-five percent (85%) of Bitcoins would be mined.
• After the halving event, three million Bitcoins (BTC 3.15 M) will not be mined.
• Each Halving event can mark the start of new Bitcoin to have perished.
Significance of Bitcoin halving
Bitcoin halving will generate a huge amount of excitement in the cryptocurrency industry. The Bitcoin’s do stand at the very core of the cryptocurrency market, as they are only responsible for ensuring that the coins will be issued at a steady pace in contrary to a predictable perishable rate. However, this controlled rate of monetary inflation is one of the main differences between the cryptocurrencies and the traditional fiat currencies that have an infinite supply according to the monetary policies set by central banks. Moreover, it is also true that there will only be 32 Bitcoin halving events, and after the ending of the 32nd halving event and no new Bitcoin will be created as the maximum supply of 21 million would have been reached.