The time of the next Bitcoin halving has recently generated some buzz and rumors. While some expect that the Bitcoin halving will spark a price rise in 2023, others believe that it will only be 60% complete by September 2022. Which should we trust?
To begin, let's understand the idea of Bitcoin halving.
The term "Bitcoin halving" refers to the slashing or dividing of the supply of newly created Bitcoin as well as the mining reward. When the supply of Bitcoins is reduced, new bitcoins are generated at a slower rate or speed. This idea is consistent with the principles of supply and demand. The value and demand of a financial commodity increase with its degree of scarcity.
Every four years, the value of bitcoin is halved. Every 10 minutes, a bitcoin is mined, and it takes an average of 30 days for miners to finish one bitcoin. This indicates that 6.25 BTC are mined every 10 minutes.
"I've never heard of Bitcoin halving; is this a brand-new idea for the #blockchain network?" you might ask. Since 2012, there has been a halving of bitcoin.
The key dates you should be aware of are listed below;
1. 50 BTC were earned as a reward for mining when Bitcoin was first founded in 2009.
2. On November 28, 2012, there was the first Bitcoin halving, which reduced the reward to 25 BTC (50/2).
3. On July 9, 2016, the second Bitcoin halving took place, reducing the mining reward by half to 12.5 BTC (25/2).
4. On May 11, 2020, the third Bitcoin halving took place, resulting in the halving of the mining reward to 6.25 BTC (12.5/2).
6.25 BTC worth of Bitcoin are currently mined every 10 minutes, however, this number will soon be halved reducing the number of Bitcoins available on the market.
5. The reward would be cut in half to 3.125 BTC (6.25/2) at the fourth Bitcoin halving, which is predicted to take place in 2024.
According to a study, 19.1 million bitcoins have been mined on the blockchain network. 21 million Bitcoins are created in total circulation, hence 1.9 million more need to be mined based on this calculation.
By the year 2140, there should be 21 million Bitcoins mined overall. After Bitcoin's supply is cut in half, demand rises as a result of the decreased supply, driving up the price. When you conduct #research, you'll discover that Bitcoin's price has risen again and again following each halving procedure.
Here's the justification for the different ideas that have been made about this. Due to an increase in the number of miners or hashing #power, less time is spent #mining when more miners are available to do so. The solution to this problem was created which make the miners' challenges and puzzles more difficult.
When mining is completed in 2140, miners will no longer receive bitcoins in exchange for their work; instead, they will be rewarded with transaction fees, which are predicted to rise with time.
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