Cryptocurrency has grown in popularity over the years and with that also sprung numerous crypto coins. Undeniably one of the most popular and successful ones has to be Bitcoin. Whether you’re new or have been around the crypto scene, you most likely heard or read its name many times.
When stepping into the crypto realm, it’s crucial to understand everything there is to know about the cryptocurrencies you want to invest in. Since Bitcoin is currently the biggest cryptocurrency on the market, you’ll want to know more about this one. So if you’re curious, Casino Days India has listed everything down below:
What is Bitcoin Halving?
A great way to start is by knowing how Bitcoin’s network functions to maintain its high value. Precautionary measures are ensured by crypto companies to maintain and sustain the currency’s value. This is where Bitcoin halving enters, which is a process when the reward of Bitcoin mining is cut in half.
Bitcoin mining was created and implemented into the crypto’s system to limit the total sum of Bitcoins to exactly 21 million. Records from May 2021 claims that there are more than 18,715,000 BTC in circulation which means there are over 2,285,000 BTC left to be mined.
Additionally, Bitcoin mining is a key event that takes place on the blockchain, and its major goal is to reduce price volatility. After the cut, inflammation is reduced, which lowers the available supply of coins. As a result, this will create a higher demand for the coin, making its price higher than the previous one. But even after all these changes, miners will still get incentives.
Cuts have been linked to dramatic increases, with prices ending up higher than they were before the occurrence.
What happens to Bitcoin’s price during cuts?
Now that you know cuts increase prices, the next thing you should learn is the stages Bitcoin had to undergo to reach its current rate. To give you a better idea, here is a summary of the major initial halves Bitcoin has undergone:
- The first cut – The first cut was done in November of 2012. At that time, Bitcoin only was worth US$11 per coin. Within a year after the cut, it increased to hundred dollars.
- The second cut – The second cut happened back in July 2016. Bitcoin’s network was currently at over 420,000 blocks at the time, which prompt the halving to occur. Bitcoin’s price shifted from US$500 to US$1,000. After a couple of months, in December 2017 Bitcoin was worth a whopping US$20,000.
- The third cut – Bitcoin experienced a recent cut, which had occurred in May 2020 when Bitcoin was valued at US$9,000. A year after the cut, its price rose to US$30,000!
Moreover, halving only occurs once every four years and will continue until the year 2140 when all 21 million Bitcoins are mined.
How does Bitcoin’s halving affect miners?
As years pass by, the rewards of Bitcoin halving lessen but its value continuously rises which shows the pros of Bitcoin halving. In other words, even if you get a reward of 50 BTC back in 2019 and only 6.25 BTC in 2020, you’re still getting a fair reward since its value increases every halve.
To give you a better idea of how these rewards pay through the years, here’s a chart showing the year, block number and reward of halving:
What happens if Bitcoin reaches maximum halving?
The calculated year when Bitcoin reaches its maximum halving is in 2140. Experts anticipate that during this, the last 21 million Bitcoin will have already been mined and the process of halving will come to finality.
Miners, on the other hand, will continue to get incentives for continuously validating and confirming new blockchain transactions. This is because the rewards miners get is said to increase in value through the years. This is done to create a higher volume of transactions followed by a fee that’ll make Bitcoin’s net value rise.
Is Bitcoin halving necessary?
Bitcoin halving is a necessary procedure the cryptocurrency has to follow to keep its value high. Halving is considered to be Bitcoin’s key feature that ‘solves the issue of controlling cryptocurrency emission and also aims to curb cryptocurrency inflation’, says founder and CEО of Listing.Help, Sergei Khitrov.
How many cuts are left?
Based on the most recent halving back in May 2020, the cuts will last until February 2140. According to calculations, there are only about 32 Bitcoin halvings left. The next halving event will take place in 2024 or when the number of blocks in the Bitcoin network hits 740,000. Even if Bitcoin halving ends, its value will still increase through the following years.
How can one benefit from halving?
One of the quickest ways to benefit from Bitcoin halving is through derivatives like Contracts For Difference or CFDs in short. This allows you to check the currency’s price fluctuation without owning the underlying coins. You can also opt to use a crypto exchange for this. There are a lot of exchanges available online. You just have to find one that has been performing well in the crypto industry.
In conclusion, Bitcoin halving is something you should know about especially if you’re interested in investing your money in Bitcoin. As of now, only four cuts have been made and 32 more are left to go. So it’s not too late for you to get into the mining scene since halving will cease to continue in February 2140. Additionally, even after that, Bitcoin’s rates are still expected to increase throughout the following years which will make your investment worth it.