Coinipop Presents – Everything You Need to Know About the Next Bitcoin Halving
Bitcoin halving is a popular term when block rewards for a miner start at exactly half the current block reward.
What is a block reward?
A block is a collection of all transactions that have yet to be written to the blockchain. A block must be confirmed and cryptographically protected by solving cryptographic puzzles and submitting proof of work to the Bitcoin network. Individuals and organizations with modern equipment and high hashing power compete to verify the block before it is written to the blockchain. To maintain the integrity of the blockchain and secure the Bitcoin network, they are rewarded with what is called a block reward.
As you can see from the diagram above, the block reward for each block mined used to be a whopping 50 bitcoin when bitcoin was starting to gain some steam. However, to maintain scarcity, Satoshi Nakamoto envisioned the concept of block halvening. The block reward is halved after 210,000 blocks have been mined, adjusting the difficulty of mining. This process usually takes around four years. The last halving happened in July 2016 and the next bitcoin halving is expected to take place in May 2020.
Bitcoin halving dates
When bitcoin started gaining ground, the block reward was 50 BTC. However, it suffered two cuts and the current reward is 12.5 BTC. After the next BTC halving, the block reward will be reduced to only 6.25 Bitcoins.
The dates when bitcoin was cut in half are:
November 28, 2012
July 9, 2016
In this way, the number of bitcoins will reach 21 million by 2140 and when all the bitcoin has been mined, the bitcoin will go from a mining economy to a hit economy.
What does the halving mean for the bitcoin economy
Usually, the bitcoin community gets hyped when the halving is near because if past trends are taken into account, it usually signals a bull run. In the last two bitcoin halvings, pre-halving uptrends have been observed for almost a year before the halving even starts.
Soon after the first halving, the price of bitcoin skyrocketed by almost 8000%. These bull runs, however, cannot go on forever. After this bullish wave, the market experienced a bearish year after December 2013.
Study of the charts shows that the upward trends prior to the halving started this time around nine months before the halving. This time, the halving triggered the bull run that brought bitcoin to its historic highest level, overseeing a nearly 2,800% increase in its price in 1.5 years.
If the past signs are to be recognized, we could be in a bull race, but many credible sources claim that history may not repeat itself. Coinipop developers and bitcoin investors think that bitcoin’s third halving may not be as fruitful for its price hike like the last two times. Doing your own research and analyzing the sentiment of the market is the best way to go if you are looking to invest in bitcoin before halving.