Halving fun with Wirex
Happy Bitcoin Halving Day, fellow Wirexers!
Whether you’re a dyed-in-the-wool Bitcoin fanatic, curious but too afraid to ask or simply grateful for a distraction from the grim state of the world, we’re here to take you through what it all means.
What is it?
Bitcoin Halving is an event that takes place every four years (roughly). Unfortunately, we can’t talk about the Halving event without quickly going over how Bitcoin is produced. If you’re an expert (or a genuine Bitcoin miner), we apologise for going over stuff you already know. If you can’t tell your halving from your hard forks, this explanation is for you (in which case, why not have a browse of our blog, Help Centre or Community forum for the lowdown on all things crypto?).
In simple terms, BTC is produced by a process known as ‘mining’, in which participants use powerful computers to solve complex mathematical problems and process transactions on the Bitcoin blockchain. Processed transactions are added to the end of the chain, forming blocks of transactions (hence ‘blockchain’). Rather than figuratively hacking cryptocurrency out of hard code, miners are rewarded with a fixed amount of Bitcoin after a block has been filled.
This reward is halved every 210,000 blocks, which equates to once every four years, give or take. In the halcyon days of 2009, the reward for ‘mining’ a block in the Bitcoin Blockchain was 50 BTC. In 2012, it halved to 25. Until today, mining a block yielded 12.5 BTC — this has now halved to 6.5 BTC per block.
Why?
Halving the rate at which Bitcoin is released into circulation represents an artificial form of inflation control. There are a finite number of Bitcoins in existence (21,000,000 BTC to be exact); which means that limiting their supply and circulation — making them more scarce — will theoretically increase the value of a single coin.
The two previous Halvings sparked dramatic changes in Bitcoin’s price, complete with dizzying highs and vertigo-inducing plummets. In both cases however, the value of BTC was higher following Halving once markets settled. There are no guarantees though — this is still cryptocurrency we’re talking about.
What should I do?
It’s entirely up to you. Any Bitcoin held in your Wirex account will remain there, and you do not have to do anything with it if you don’t want to. Some people see Halving as an opportunity to buy, some see a chance to sell, and, as always, some people just want to HODL (hold on for dear life). We don’t judge either way.
HBHD everyone!
