Bitcoin is a famous virtual currency with robust technologies such as a blockchain and a peer-to-peer network. These two fascinating technologies of bitcoin help bitcoin in achieving decentralization aspects. Decentralization aspects of bitcoin demonstrate that no authorities and federal banks can back up bitcoin.
Since bitcoin is entirely virtual, adding new bitcoin is correspondingly decentralized as well as virtual. Therefore, bitcoin is amongst the profitable businesses related to bitcoin.
Alongside bitcoin mining, bitcoin trading is exceedingly profitable. Suppose you want to get results in your trading expedition check, Bitcoin Prime for more details. You are familiar with the fact that bitcoin miners merely perform bitcoin mining to get the block reward.
Bitcoin mining offers you a valuable block reward in the form of bitcoin and the transaction cost. However, since bitcoin is politically independent, several factors affect the store value of bitcoin. Bitcoin halving is one of the aspects which affect the store value of bitcoin. After every bitcoin halving roughly every four years, the store value of bitcoin has increased to an exceeding extent. Here is everything you should know about bitcoin halving and how bitcoin halving impacts the market value of bitcoin.
What is Bitcoin Halving?
Before understanding the actual concept of bitcoin halving, you should know about bitcoin mining. Bitcoin mining adds new bitcoin units to circulation by involving computing power and processing powers. Bitcoin miners avail themselves of bitcoin in the form of block rewards alongside the transaction cost.
Bitcoin miners can only avail of the block reward if these miners decode the math puzzle under a given time. Once these miners verify and compel a set of transactions in the form of a block, miners can avail of the block reward.
However, the block reward of bitcoin mining progression is not permanent, and it keeps changing. Bitcoin halving is the event that declines the block reward of bitcoin mining roughly after every four years. Once bitcoin miners mine 210,000 blocks, bitcoin halving takes place.
Timeline of Bitcoin Halving
As mentioned ahead, bitcoin halving takes place after every four years. You are familiar with the fact that Satoshi Nakamoto released bitcoin in 2009. The first-ever block reward halving took place on the year 28th of November in the year 2012.
Bitcoin mining block reward at the very first instance was 50 units alongside the transaction cost. After the first-ever bitcoin halving, the block reward of bitcoin mining was 25 units. The second bitcoin halving took place on the 9th of July in 2016, and bitcoin mining’s block reward after the second bitcoin halving was 12.5. Recent bitcoin halving took place in May 2020, and bitcoin mining’s block reward after the third halving is 6.25 units with the transaction cost.
Does Bitcoin Halving affect the profitability of Bitcoin Mining?
Bitcoin mining is a costly process; all the more, bitcoin halving decreases the block reward every four years. So undeniably, bitcoin halving decline blocks the reward of bitcoin mining, but it does not affect the profitability of bitcoin mining. Yes, you read it right.
The prominent reason is that bitcoin halving declines the supply of bitcoin units by decreasing the block reward of bitcoin mining. Therefore, a decrease in supply leads to higher demand, and higher demand leads to an incline in the store value of an asset.
In a nutshell, the value of bitcoin is correspondingly increasing alongside the bitcoin halving. However, according to some rich sources, the expense of bitcoin never increases as an incline in-store value balances out bitcoin mining’s profitability.
How does bitcoin halving impact the store value of bitcoin?
As mentioned, bitcoin halving decreases the supply of bitcoin, and due to this reason, the value of bitcoin is correspondingly increasing. Therefore, bitcoin halving has impacted the store value of bitcoin decisively over some time.
After the first-ever bitcoin halving touched the milestone of $1000 for the first time, after the second bitcoin halving, bitcoin’s store value touched $10000. Finally, after the recent bitcoin halving, bitcoin has touched its all-time amid April as bitcoin has touched the store value of $65000.
Above mentioned is everything you should know about bitcoin halving.