Bitcoin halving, one of the biggest events in the crypto-world, is estimated to take place on May 11th, 2020. It is a rare occurrence, which happens every four years and has the potential to have a lasting effect on the entire crypto community. But what is Bitcoin halving? How does it work? How will it affect Bitcoin and other cryptocurrencies? In today’s blog post, we are excited to share some thoughts and clarify any confusion surrounding this event.
What is the Bitcoin halving?
Unlike traditional fiat currencies such as euro or US dollar, Bitcoin (BTC) was designed with a fixed supply. To be exact, the total number of Bitcoins that can ever be created is 21 million. Currently, over 18 million BTC are already in circulation, but even more are being produced every day through mining.
As you may know, the Bitcoin network is run by miners that maintain the shared transaction ledger called the blockchain. Miners solve complex mathematical problems to validate transactions and add them to the blockchain. Once the math problem is solved, a new block containing the latest batch of transactions on the network is added to the Bitcoin’s blockchain and verified by other miners on the network. That is how new bitcoins are created. For every successfully mined block, miners receive some Bitcoin as an incentive to maintain the network.
However, Satoshi Nakamoto, the anonymous creator of Bitcoin, programmed Bitcoin protocol in such a way that for every 210,000 blocks created (approximately every four years), block reward gets halved. Consequently, the number of Bitcoins will also reduce until Bitcoin issuance stops completely with 21 million coins in circulation. This is called bitcoin halving. By periodically reducing the coin supply, the system ensures the scarcity of Bitcoin in circulation and hence helps prevent price inflation.
What to expect after BTC halving?
The upcoming Bitcoin halving is estimated to take place on the 11th of May this year. However, pinpointing the exact time for when it will happen is highly improbable. The halving should occur once the network verifies and creates the block number 630,001. You can check the latest block height in SpectroCoin Bitcoin Explorer.
Back in 2009, the initial reward for solving a block of transactions stood at 50 BTC. During the first BTC halving in 2012, it was cut in half to 25 BTC and then cut again in 2016 to 12.5 BTC. This time miners will see their rewards cut to 6.25 BTC.
Since this is only the third Bitcoin halving in history, there is not a lot to look back on to anticipate its effects on the market. Ultimately, Bitcoin market is determined by supply and demand. While it is commonly believed that a decrease in supply forces the increase in price, each halving is distinct in the way it affects the market.
Please note that if you hold Bitcoin at SpectroCoin, there is nothing that you have to do to prepare for the Bitcoin halving 2020 as your assets will remain just as safe as before the event. As mentioned before, BTC halving is aimed at miners and their rewards.
If you would like to buy or sell Bitcoin, SpectroCoin offers a wide range of crypto and fiat payment options. At SpectroCoin you can buy Bitcoin with debit and credit cards, bank transfers or a number of e-wallets, such as Skrill, Neteller and more. Sign up and try our Bitcoin solution today!
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