You might have heard about “Bitcoin Halving” and the event many people in the Crypto space are discussing. While there are some significant changes that keep happening in the entire Cryptocurrency world and forks, bridging and everything else keep happening, Bitcoin halving is an event that was programmed into Bitcoin’s code. Hence, it occurs in any case, and it is timed to happen every four years. Let’s check out what Bitcoin halving means.
Would the entire supply of Bitcoins go down to half? No. While the literal meaning would’ve been that if you look at the words “Bitcoin halving“, in this case, the halving means the reward given to Bitcoin miners for processing transactions is cut in half.
Every 210,000 blocks, the number of new bitcoins created as a mining reward is cut in half. This precisely is what is called Bitcoin halving. It was programmed into the code so that the inflation of Bitcoins is controlled. The next Bitcoin halving event will happen in the first half of 2024. When is the next Bitcoin halving date? The next Bitcoin halving date is scheduled to take place at block 840,000 and based on how it is going, the halving is predicted to occur on April 26, 2024, at 03:13:57 AM UTC.
The History:
- When Bitcoin was introduced back in 2009, the original reward was 50 Bitcoins per block
- The first halving happened in 2012, and the reward was reduced to 25 Bitcoins per block
- The next halving happened in 2016, and the reward was reduced to 12.5 Bitcoins per block
- The next halving was in 2020 when the reward was reduced to 6.25 Bitcoins per block
How does the Bitcoin halving impact the miners and market
The halving event has a lot of impact on the mining industry, not just on the overall Bitcoin and crypto market. The halving event leads to a reduction in the rate at which new Bitcoins are created. The supply growth is hence slowed down and since the total supply of Bitcoin is capped at 21 million, the halving events help in controlling the issuance of new Bitcoins into the market.
While the Bitcoin halving is seen as a positive event in terms of the market structure overall, it impacts a bit negatively for the miners. With the block rewards getting reduced to half of what it was so far, they would have to go through dynamic changes in the mining strategy, and many of the miners give up and end mining given how the situation for them is in terms of the cost of electricity and hardware.
On the other hand, the market usually reacts positively because Bitcoin becomes more scarce and valuable and this in turn increases the value of the Bitcoin token. But this hasn’t always been the case, so it is a very interesting situation whenever Bitcoin halving happens. The event could lead to all three scenarios, i.e. the price going up, down, or staying stable. Also, the pricing would not only depend on the Halving event and this could only be stated as a reason for how the market sentiment is.
