Halving is an event in which the block reward of a cryptocurrency is halved in order to reduce its level of issuance. It was initially implemented in Bitcoin and since then it has been one of the most important processes in its economic system.
Halving is an automated process of the bitcoins that miners receive as a reward for building a block. It was created to encourage mining through working test. This for establishment with each certain number of blocks, the emission must be reduced by half.
The first cryptocurrency used to start this process was Bitcoin. This is because the amount of Bitcoin that can exist is limited and is set at 21 million Bitcoins in the Bitcoin software one more. Bitcoin software says Bitcoin will be released to reward miners for building blocks by validating transactions at an average speed of 10 minutes.
However, the number of bitcoins that are released is not always the same, it is established by the software that every certain number of blocks is halved. This automated process is called halving and is used to establish a certain time until the coins have finished issuing in order to continue a deflationary pattern, or what is the same, that its value gradually increases.
What does the bitcoin halving mean?
The halving will be executed automatically. As is established in the code, so there will be no network downtime or anything like that. Everything will continue as before. Except that, from this moment, for each mined block, half of the BTC will be delivered to the world.
The halving is a mechanism created so that cryptocurrencies such as Bitcoin are not immediately distributed. To achieve this, this escalation mechanism has been put in place to control emissions.
This issue generates that there are new cryptocurrencies in circulation and we can buy bitcoins easily. A predictable process of initial democratization for the distribution of money which gives the possibility of avoiding that everything ends up in a few hands.
In this way, if we look at the evolution of Bitcoin so far, we see that we have reached the figure of 86.554% of bitcoins in circulation. It should be borne in mind that with the first 210,000 blocks, the figure of 50% of bitcoins in circulation has been reached.
The Bitcoin without halving?
It’s quite an interesting question. If the halving process did not exist, all bitcoins would have been mined a long time ago. For this reason, miners will only receive transaction fees as compensation. Some low-cost commissions since Bitcoin wouldn’t have had time to revalue so much that it was profitable to mine.
It would have taken a few years for all bitcoins to come into circulation. Initially, 50 BTC was distributed per block, which means 300 bitcoins per hour or 7200 bitcoins per day. An amount of 2,628,000 bitcoins would be released each year, which if we divide it by the total number of possible bitcoins, or 21,000,000 million bitcoins, would give us almost eight years the time it would have taken for all bitcoins are put into circulation.
Added bitcoin short-term projection
You can check the percentage of bitcoins in circulation compared to the total and the date on internet which this figure was reached. We can also see with how many bitcoins the period opens and with how many it closes, as well as the amount added.
Cut everything in half
Calculations of all halving are done and it is known how many bitcoins will be awarded for each block from its start until the last one is mined. We are currently in the third stage of the halving of the thirty-four stages that will exist.
Currently, each block is rewarded with 12.5 BTC (about €80,000), so some believe that in 2032, it is possible that a single bitcoin will be worth at least €100,000.
No one can guarantee that Bitcoin will ever reach this price, but if you are interested in investing in Bitcoin, it’s as simple as having some of the 21 million that exist and you don’t need to buy it. Whole one. If the price of Bitcoin doubles, your stake also doubles. If you want to do it on Bit2Me, you can do it in a simple way. It’s fast and safe.
Consequences for a normal user
For anyone who uses Bitcoin on a daily basis when transacting or sending money around the world, there will be no consequences. You can continue to use your wallet normally and as you have done so far.
Consequences for a Bitcoin miner
Miners are more important players in this case. In a few days, we will see if the same computing power is maintained while mining on the network or if a part of the miners will stop mining because of the high cost and the low reward (counting that the price of one bitcoin does not increase). Since every 10 minutes, they will receive 50% fewer bitcoins, the search and path to more efficient miners could increase. A very wide and exciting range is also opening up, full of possibilities, for all companies in the sector.
Consequences for speculators
For speculators, a halving may be the perfect time to start raising the price of Bitcoin, as the new reward will make Bitcoin increasingly rare. This of course, because it is the issuance of Bitcoin which reduced this leads to demand exceeding supply, thus increasing the price of BTC in short, “it’s fishing in a troubled river”, and those who know how to manage in these circumstances will be able to reap great profits.