Bitcoin Halving Is A Process That Reduces Bitcoin Mining Reward Per Block To Half Of The Previous Value That Occurred After Every 210,000 Blocks.
Why is the bitcoin halving important? Decreasing bitcoin supply increases scarcity, which historically has led to a higher value. In july 2016, the bitcoin network arrived at the milestone of 420,000 blocks, triggering a second halving.
By Issuing Fewer Bitcoin Over Time, The Halving Makes It More Likely That Bitcoin’s Value Will Rise (Assuming Consistent Levels Of Demand).
This mechanism ensures that cryptocurrency is resistant to inflation and keeps its value. Nevertheless, it is a fact that bitcoin increased significantly in its value after every halving. This high amount was set to attract as much attention as possible and get investors and miners motivated to get involved in.
In This Article, I Use The Supply And Demand Curves Of Economics To Explain How Its Value Will Increase Because Of The Halving.
By reducing the rewards of mining bitcoin as more blocks are mined, bitcoin halving ensures that the amount of bitcoin in circulation does not increase exponentially, which also tends to put upward pressure on its price. Bitcoin halving simply refers to reducing the rate of daily new bitcoins generated with time which decreases the inflation rate of bitcoin with time. That is a staggering amount by today’s standards.
The First Point I’d Like To Clarify Is That The Term “Bitcoin Halving” Does Not Indicate A Bitcoin Halve In Value, Or That The Price Will Be Cut In Half.
Now, the assumptions that the price of bitcoin could rise to $50,000 or $100,000 do not seem so crazy anymore. Back in 2009, when bitcoin was first created, each block contained 50 btc. Based on the halving model, the last bitcoin will be mined in 2140 after the 64th halving event.
As A Result, Bitcoin Becomes More Scarce Over Time, And It Will Rise In Value As Long As Demand Stays At Least Constant.
The bitcoin halving prediction is based on the latest block height of 726,074 and the average block time for the last one thousand blocks, which is currently at 603 seconds per block. The halving ensures that bitcoin is a deflationary. A bitcoin halving event is when the reward for mining bitcoin transactions is cut in half.