Why We Won’t See Effects of the Bitcoin Halving for a Few Years
First of all, what is the Halving?
In Blockchain, it’s so easy to be lost in the acronyms, buzzwords, and terminology. Amongst which, is The Bitcoin Halving.
What is it?
In the simplest terms:
The Bitcoin Halving makes Bitcoin twice as expensive to “mine”.
After a halving event, the miners who spend their hard-earned cash on electricity to power their computers, receive half as much BTC for their troubles.
That’s pretty much the crux of it.
This rule is cryptographically engrained in the Blockchain to occur every 4 years or so, and can’t be changed.
Why does it affect the price?
Imagine you’re in the market for a new gold necklace. In our imaginary market, extracting gold out of the ground costs about $100 per gram (These numbers are completely made up, please don’t google it).
Let’s say after it’s extracted, polished, transported across the world to a refinery, moulded, made into a chain, and delivered to a jewelry store in your city, the total cost of that supply chain is now $200 per gram.
