What Is Bitcoin Halving

Are you interested in cryptocurrency and looking forward to starting investment into this promising sphere? In this case, the word Bitcoin should sound familiar to you. We believe that it’s not worth the time explaining the tremendous impact of Bitcoin on the modern world. Still, we believe that to make your plan regarding the investment clear, it’s necessary to take a look at the origin of this coin and explain the phenomenon of Bitcoin halving as a tidbit of the current crypto year. Bitcoin’s history started only 15 years ago. During the last decade, we observed a rapid increase in the BTC price, and only three Bitcoin halvings. Each halving provided miners with different block rewards for adding new spaces to the blockchain.

Over the years, the circulation of Bitcoin has increased, as well as the difficulty of obtaining the coin. It’s also worth mentioning the amount of influence that Bitcoin has on the modern investment world. Even though it has many competitors in the form of other digital coins, which also have some great potential, Bitcoin remains the indisputable leader in the market due to several specific reasons. First of all, Bitcoin is a pioneer in the world of digital currencies. Despite the open skepticism, this coin has gained a tremendous amount of trust and influence from investors around the world. Bitcoin and blockchain are the flagships of the crypto world. Many other coins have tried to repeat the success of this currency, but no one has come close to these results.

What Is Bitcoin Halving?

https://coinpedia.org/beginners-guide/what-is-Bitcoin-halving/ Bitcoin halving occurs approximately every 4 years. The particular range between the halving is connected to the fact that during Bitcoin mining a new block can be created every 10 minutes.

Therefore, since the creator of Bitcoin programmed the halving of approximately every 210,000 blocks, the next halving is expected to happen in April 2024. As was planned by the mysterious Bitcoin creator Satoshi Nakamoto, halving would be able to prevent Bitcoin from the fate of regular currencies, due to reducing the number of existing coins and gradually decreasing the block rewards, by increasing the coin’s value and remaining stable indexes of Bitcoin’s supply. So, let’s summarize the main characteristics of the Bitcoin halving:

• It’s a special procedure that reduces the price of Bitcoin mining in half.
• The halving occurs approximately every 210,000 blocks, which is equal to 4 years;
• The main cause of the halving is to control the release of the new bitcoins and the artificial price of the crypto coins.

History and Timeline of Previous Halvings: Bitcoin Halving Dates

To understand the importance of this process, let’s go back to the timeline and take a look at previous halvings. No matter how strange it sounds, it would be only fourth halving during the last 15 years, even though it feels like Bitcoin has been with us forever. On these specific dates, the Bitcoin price has been significantly cut, as was planned by Satoshi Nakamoto. In any case, let’s take a closer look at each event to clearly illustrate how Bitcoin halving works.

• 1st halving. The first halving occurred 3 years after BTC was created, namely, on November 28, 2012. During the first halving, the mining rewards were reduced from 50 coins to 25 coins. It’s worth reminding you that back in 2012, Bitcoin’s price was only around $12.

• 2nd halving. The second halving took place on July 9, 2016. On this day, the block reward for miners was reduced from 25 coins to only 12.5. It’s also interesting that the price of Bitcoin in 2016 reached the point of $650.

• 3rd halving. At the moment, the third and final halving occurred on May 11, 2020. In comparison with the second halving, BTC was worth more than $8k, and as a result, the block reward for miners was reduced to 6.25 BTC per block.

So when are the next Bitcoin halving dates? The fourth halving will occur on Friday 19, 2024, when the block reward for miners will be reduced again. After this date, Bitcoin miners will be able to collect only 3.125 BTC per block.

Why Does Bitcoin Halving Happen?

As we briefly stated at the beginning of our article, Bitcoin halving was conceived by its creator Satoshi Nakamoto as an efficient way of ensuring the controlled supply of the new Bitcoins that enter the market. By Nakamoto’s design, the capped limit of the released coins, as well as global decentralization politics, should prevent any risks to which the regular fiat currencies are exposed.

A contrast with fiat currencies is presented by the fact that the coin monetary policy prevents it from the influence of inflation. Also, since the creation of Bitcoin was connected with the shock from the 2008 crisis, it was intended to make sure that the coin would be unavailable for any governmental regulations. As we may see, so far Nakamoto’s idea has been successfully implemented. The new Bitcoin value has increased by 121.2 % only over the last year. As of today, the Bitcoin’s price is equal to $64k. According to recent predictions and market analysis, the maximum rate that will be reached is around $85k at some point in 2024.

As for the scarcity of Bitcoins, it’s worth mentioning that as of today there are more than 19 million Bitcoins that have already been mined. Accordingly, there are more than 1 million free coins that have not been extracted yet. So far, Nakamoto’s idea continues to be justified, since the value of Bitcoin continues to increase with the years, with the amount of effort that should be put into mining increasing as well.

Impact on Miners

We’ve already discussed the general idea and reasons for halving. Now, let’s take a closer look at the influence that halving has on the people who encounter it directly. As you might have guessed, we are talking about Bitcoin miners. Firstly, it’s worth mentioning that the amount of mining rewards that accompany the miners' community for extracting new Bitcoins has been decreasing over the years.

Thus, the amount of interest from miners is already decreasing. Also, let’s not forget that, unlike the potential profit, the fees for electricity and technological equipment have only increased. Finally, fewer Bitcoins and a decrease in the number of experienced miners can lead to a decrease in the hash rate. However, the last point can be interpreted as a positive as well, since fewer experienced miners can open new opportunities, as well as the ability to receive significant Bitcoin mining rewards.

Price Impact Theories

Of course, it’s not possible to ignore the direct influence of halving on the Bitcoin price. The fact that most of the available bitcoins have already been mined significantly raises the rate at which new clients will buy the Bitcoin. Also, when talking about supply and demand trends it’s impossible to ignore the fact of the market’s unpredictability in terms of the Bitcoin network.

Another factor that accompanies halving is market speculation, which could also lead to significant Bitcoin fluctuations. This phenomenon could be observed on the eve of halving and straight after it, which results in a bullish trend of the Bitcoin price. However, usually, the Bitcoin rates stabilize pretty quickly and reach the previous price levels shortly after the end of the halving event.

However, when talking about the rate at which new Bitcoin prices will form, it would be wrong to rely entirely on halving. The new Bitcoin price formation relies on a total of different factors that include the investors' behavior, market sentiment, technological influence on the market, transaction fees, etc.

Future Halvings and Roadmap

Many people who are connected with the cryptocurrency market, and in particular Bitcoin, are interested in the following questions: “When is the next Bitcoin halving?, “How many Bitcoins halvings are left?” & “When are the next Bitcoin halving dates?” Therefore, in this section, let’s take a closer look at the future projections of the Bitcoin halvings and define the timeline of date estimates of the future halvings.

According to recent calculations, the last halving should take place approximately in the year 2140. Until this time, the amount of extracted Bitcoins should reach the number of 21 million Bitcoins. And it’s also not difficult to calculate that in this situation, we only have 29 Bitcoin halvings left. But what will happen when the last halving takes place and the blockchain will not receive any new coins?

In this case, the miners will not be able to earn for solving hashes and receive mining rewards in the form of new Bitcoins. Even though, it doesn’t mean that the ability to earn on bitcoin will be closed for you. Instead, as it is known the miners will have to rely solely on the transaction fees for the actions conducted with the Blockchain system. Those transaction fees will form the basis of their future profit.

Conclusion

So let’s wrap up everything that is needed to understand Bitcoin's halving process in the year 2024. Halving is an extremely important process in terms of controlling the appearance of new Bitcoins, maintaining the stability of the Bitcoin network, keeping centralized regulations away from the cryptocurrency market, and of course, maintaining the scarcity of this cryptocurrency.

Since the moment the blockchain appeared and the first Bitcoin transaction was made, a little over fifteen years have passed. During such a short period, the Bitcoin market has gone through a variety of different metamorphoses. For instance, the price of Bitcoin in the year 2009 was closer to zero than to fifty cents. But in only two years, the price tag for this currency reached $32 per coin. The halving events played an essential role in the forming of the future projections for this currency. The first Bitcoin halving event changed the future of this phenomenon instantly.

We know that the number of potentially created Bitcoins is limited to only 21 million. It’s hard to predict any potential outcomes of this undoubtedly ingenious invention of the 21st century. But what can be said for sure is the fact that we will be hearing about Bitcoin and its influence on the world at least for the next hundred years. Therefore, it’s up to you whether to grab this opportunity or to let it slip out of your hands.

FAQ

When is the next Bitcoin halving in 2024?

The date of the next halving of Bitcoin has already been determined. The halving is going to take place on April 10, 2028. During this halving, the estimated block reward for the miners will be reduced from 3.125 Bitcoins to 1.625 BTC per block, according to the algorithms that are laid into the structural code of the blockchain.

Will Bitcoin go up after halving?

According to recent research, the demand for cryptocurrencies, especially for the leading coin, is extremely high. This leads us to believe that the estimated prices for Bitcoin will grow significantly. A rise in demand is worth expecting on the precise day when halving will take place.

What happens during a Bitcoin halving?

A Bitcoin halving is a special process during which the price for Bitcoin mining is cut in half approximately every four years or 210k blocks. It happens due to specific reasons such as decentralized monetary policy, control over the new coins, maintaining scarcity and value, specifics of blockchain security, etc.

When was the last Bitcoin halving?

Bitcoin halving events take place approximately every four years, and we witnessed the last halving on May 11, 2020. During the last halving, the new Bitcoin reward was cut in half again, when the miner's reward was decreased from 12.5 coins to 6.25.

Can I make money from the Bitcoin halving?

Any halving event that took place over the last fifteen years marked an exceptional opportunity for increasing your capital due to a significant boost in Bitcoin’s supply. For instance, every halving is usually followed up by a so-called bullish trend, when Bitcoin’s price provides exceptional opportunities for traders and investors who want to make a fortune out of the blockchain.