Bitcoin halving might be a new term for you, especially if cryptocurrency interests you. It is not rocket science but simply refers to a process in which the bitcoin is cut into half as compared to its current price at the time of halving. The process takes place after the mining of around 210,000 bitcoins from the time it is released, which is approximately every four years.
The obtained bitcoin value is basically the block reward that is offered to the bitcoin miners on dedicating their time, energy, and skills to mine bitcoin. However, it is not as simple as it may sound but requires sufficient money, energy, and time to deal with the technical hardware and solve complex questions of the computer.
The basic idea about bitcoin halving is to keep the miners motivated to mine bitcoin by giving them a small share of the money the users profit from. However, it was introduced to halt the supply of bitcoin for some time and circulates them to calculate the mining fees of each bitcoin. Such as the 21 million bitcoin present today if it goes into halving anytime will have the value distributed into 4 halves for the easy calculation of the money given to its respective miner.
To date, there are 18,361,438 already in the process and around 2,638,562 whose mining value is not found. To know further about predictions of the next bitcoin halving in May 2020, you may visit Oil Profit official website and give your opinion if halving is a profitable decision or not.
With that said, here is more information that will help you know all about bitcoin halving and how it has impacted the bitcoin value in recent years.
- The first-ever bitcoin halving occurred right when the prices of bitcoin were skyrocketing – at the end of November 2012. The complete halving took 513 days to achieve a stable price value from $12 to $1,150 when the market capitalization at that time was $270.94. At the first half, Bitcoin experienced a series of declines that happened as 2.5, 12.5 to final 6.25 per block. As a result, the final market price of bitcoin got a whopping raise regardless of its scarcity which is why it was cut into four halves.
- At the time of the second bitcoin halving, this trillion-dollar crypto already had the value of $650 in July 2016. The halving brought a massive surge in the price of $2000 which was certainly a remarkable achievement obtained from bitcoin halving. It took comparatively more time which was 1068 days that made it to 51 weeks for the bitcoin to be under the halving process at a market capitalization of $20,074.
All the halving fulfilled the main objective, which was to minimize the inflation rate, lower the available supply rate, increase the bitcoin demand, and price to make the first largest crypto a widely recognizable asset used today. However, both halving’s proved to be a successful decision to spike the bitcoin prices from their lowest.
It is also used to determine the number of bitcoin tokens that are estimated to be found in each block of the blockchain technology through which bitcoin runs. At the time of the Bitcoin launch, Satoshi stated the presence of 50 BTC in one block that was reduced to 6.25 BTC due to bitcoin halving.
The reason for the halving every four years was due to the set bitcoin algorithm that depicts the creation of every new bitcoin block every 10 minutes. This fixed time interval for the 210,000 bitcoins makes it approximately four years which makes the ideal time for bitcoin halving.
However, the ten minutes decided for Bitcoin halving only depict the situation when a small set of bitcoin miners with normal power on ordinary systems try to mine bitcoin and can be decreased if these factors change into more smart and technical ones.