Bitcoin Halving
By Kriss. S. KILONZO on ALTCOIN MAGAZINE
What Is Bitcoin Halving?
Bitcoin is a cryptocurrency that has generally revolutionized money and financial transactions in particular. To understand Bitcoin halving a few fundamental features should be put into consideration.
- Bitcoin supply is limited to 21 million coins.
- All bitcoins are generated through a process called mining.
What Is Bitcoin Mining?
Techonopedia describes mining as the acquisition and creation of bitcoins by introducing more coins into the system, by solving complex computational work. The blockchain entails a public ledger of all transactions on the blockchain. The miners confirm the legitimacy of past transactions on the rest of the network to ensure that spent coins are transferred accordingly without being double spend.
Their primary role is to allow bitcoin nodes to become secure and tamper-resistant, and they are designed to be difficult and resource-intensive this ensures that the number of blocks discovered by miners each day is kept steady, to avoid rapid inflation. Each block in the public ledger blockchain must have a proof of work to be considered as valid.
After undergoing rigorous verification by all other bitcoin nodes in the network in each block, they are after that confirmed and verified. This is referred to as proof-of-work-function. Miners are awarded some bitcoins, which is agreed upon by everyone in the network.
In 2009 when Satoshi Nakamoto invented bitcoin he put down the ground rules in code which entail the following:
In every 210000 blocks of bitcoin mined the rewards given to miners for verifying transactions in the blockchain will decrease by half.
In 2009 when the first bitcoin block has mined the rewards to miners was 50BTC per block. On average, six blocks are mined every one hour . therefore bitcoin halving happens after mining 210000 blocks, which is approximately every four years.
Bitcoin Halving History
2009 block 1 =>bitcoin rewards per block 50BTC
2012 block 2101001 => bitcoin rewards per block 25BTC
2016 block 420001 => bitcoin reward per block 12.5
2020 block 630001=> bitcoin reward per block 6.25
2024 block 740001=> bitcoin reward per block 3.125
when will the last bitcoin be mined, and what happens after that?
The last bitcoin will be mined at exactly the 20999999.99th block in the year 2140. After the twenty-first millionth bitcoin is mined mining will continue not to create new bitcoins but to enable verification of transactions and to secure the bitcoin blockchain. Bitcoin miners will keep getting rewards through transaction fees.
The Genius Of Satoshi Nakamoto
One of the most considerable disadvantages of using fiat currency is inflation. Central banks can print lots of money flooding the markets with fiat currency increases the supply and lowers the demand leading to inflation. Bitcoin, by comparison, has a limited amount (21 million coins )and bitcoin halving increases the scarcity of bitcoin hence through the laws of demand and supply increases the value and reduces inflation.
What happens next?
Nobody knows how bitcoin halving is going to affect the current price or value of bitcoin, but according to past halving events, Bitcoin price has surged in price during the few months before the halving events.
Disclaimer: The content in this article is purely for educational purpose and should not be taken as investment advice, nor do I endorse any project that may be mentioned or linked to in this article. Buying and trading cryptocurrencies should be considered a high-risk activity. Please do your due diligence before taking any action related to content within this article. Finally, I do not take any responsibility should you lose money trading cryptocurrencies.
