Ben Taylor

Ben Taylor

1642400365

What is Bitcoin Halving | How it Works and Why Does it Matter?

In this post, you'll learn What is Bitcoin Halving, How it Works and Why Does it Matter?

As you must already know, Bitcoin became the first ever cryptocurrency when it was released in 2009 by Satoshi Nakamoto. Given that the maximum possible number of bitcoins generated is 21 million.

The persona Satoshi Nakamoto was involved in the early days of bitcoin, working on the first version of the software in 2009. Communication to and from Nakamoto was conducted electronically, and the lack of personal and background details meant that it was impossible to find out the actual identity behind the name.

Nakamoto’s involvement with bitcoin ended in 2010. The last correspondence anyone had with Nakamoto was in an email to another bitcoin developer saying that they had “moved on to other things.” The inability to put a face to the name has led to significant speculation as to Nakamoto’s identity, especially as cryptocurrencies increased in number, popularity, and notoriety.

Contrary to popular belief, many cryptocurrencies don’t have a finite supply. Bitcoin’s total supply is capped at 21 million coins.

Bitcoin halving refers to an event when the pace at which new units of the world's largest cryptocurrency entering circulation is cut in half. 

It's part of an overall strategy to keep the maximum supply of bitcoins fixed, in contrast with fiat currencies like the US dollar, which have essentially unlimited supplies and lose value when governments print too much of it.

🔥 If you’re a beginner. I believe the article below will be useful to you ☞ What You Should Know Before Investing in Cryptocurrency - For Beginner

What is Bitcoin halving?

Bitcoin halving is an automated process of halving the bitcoins miners receive as a reward for creating a block. It was created to encourage mining through work test . This by setting with every certain number of blocks, the emission should be cut in half.

The first cryptocurrency to implement this process was the Bitcoin. All this because the amount of bitcoins that may come into existence is finite and is established in the Bitcoin software at 21 million bitcoins. Not one more. Bitcoin software establishes that bitcoins will be released for reward miners as they create blocks validating transactions, at a rate of every 10 minutes on average.

However, the number of bitcoins that are released is not always the same, it is established by the software that each certain number of blocks is halved. This automated process is called halving and is used to establish a certain time until the end of the issue of coins in order to pursue a model. deflationary, or what is the same, to gradually increase its value.

A "block" is a file containing 1 MB of Bitcoin (BTC) transaction records on the Bitcoin blockchain. "Miners" compete to add the next block by solving a complex mathematical problem using specialized hardware, producing a random 64-character output known as a "hash," finishing the process, and locking the block so it can't be changed. By completing these blocks, miners receive Bitcoin.

So, how does the Bitcoin halving cycle work? Miners were paid 50 BTC per block when the cryptocurrency was initially established. Early users could be enticed to mine the network in this fashion, even before it was evident how successful it would be. The rate at which new Bitcoin is created decreases by half every 210,000 blocks mined, or roughly every four years until all 21 million Bitcoin has been mined.

As per Bitcoin halving dates history, the last three halvings took place in 2012, 2016 and 2020. The first Bitcoin halving or Bitcoin split occurred in 2012 when the reward for mining a block was reduced from 50 to 25 BTC. 

The halving event in 2016 reduced incentives to 12.5 BTC for each block mined, and as of May 11, 2020, each new block mined only generates 6.25 new BTC. In 2024, the next Bitcoin halving is expected to take place. This system will continue until roughly 2140.

In this way, if we look at the evolution in Bitcoin to the present, we see we have reached the figure of 86,554% of the bitcoins in circulation. We must bear in mind that with the first 210.000 blocks the figure of 50% of the bitcoins in circulation was reached.

Within this period in which we are, 2.625.000 BTC will be added, which will mean reaching 18.375.000 BTC and we will reach the amount of BTC in circulation of 87.5%.

In this post, we will explain why Bitcoin halving occurs, how the Bitcoin halving cycle works and why it matters.

Why does Bitcoin halving occur?

The Bitcoin mining algorithm is programmed to look for new blocks every ten minutes. The time it takes to find blocks will decrease as more miners join the network and add more hashing power. To restore a 10-minute objective, the mining difficulty is reset once every two weeks or so. The average time to locate a block has constantly remained below 10 minutes (roughly 9.5 minutes) as the Bitcoin network has grown dramatically over the last decade.

Bitcoin's supply is limited to 21 million units. The generation of new BTC will stop once the total number reaches 21 million. Bitcoin halving assures that the quantity of Bitcoin that can be mined each block drops over time, making BTC more rare and valuable.

Logically, the incentive to mine Bitcoin would decrease when each halving was completed. Bitcoin halvings, on the other hand, are linked to massive increases in the price of BTC, giving miners an incentive to mine more even though their payouts have been halved.

Bitcoin miners are encouraged to continue mining as prices rise. On the other hand, miners may lose the incentive to create more Bitcoin if the price of the digital currency does not rise and block rewards are reduced. This is because mining Bitcoin is a time-consuming and expensive operation that necessitates a lot of computer power and electricity.

Why does Bitcoin halving matter?

Bitcoin halving is usually accompanied by a lot of turmoil for the cryptocurrency. As a result of the halving cycle, the supply of available Bitcoin decreases, raising the value of Bitcoins yet to be mined. And with such changes comes the opportunity to profit.

On Nov. 28, 2012, when the price of BTC was around $12, the first halving took place; one year later, Bitcoin had risen to nearly $1,000. The second halving occurred on July 9, 2016, and Bitcoin's price plummeted to $670 at the time but rose to $2,550 by July 2017. Bitcoin reached an all-time high of about $19,700 in December of that year. Bitcoin's price was $8,787 at the time of the most recent halving, in May 2020, and it exploded in the months following.

Of course, there were other elements to consider when analyzing Bitcoin's post-halving booms:

More press coverage of cryptocurrencies and Bitcoin.

A fascination with the digital asset's anonymity.

A gradual increase in the number of real-world use cases for the currency.

However, if you believe in the value of history, past Bitcoin halvings have been long-term bullish drivers for the cryptocurrency's price. The third halving in Bitcoin's existence, on the other hand, is almost certain to have an impact on the BTC ecosystem in various ways. Primarily, as the economic benefit for mining becomes less enticing and, for less effective miners, unprofitable, the number of Bitcoin miners is widely projected to decline.

The Bitcoin halving symbolizes Bitcoin's deflationary tendency regularly. This has been the core of the bull case for Bitcoin since its inception; that is, Bitcoin, being the decentralized cryptocurrency, can't be printed into oblivion by governments or central banks, and the total supply is completely known.

Consequences for a normal user

For anyone who uses Bitcoin in their day, day to day when making transactions or sending money around the world, there will be no consequences. You can continue using your portfolio as normal and as you have done so far.

Consequences for a bitcoin miner

Miners are more important players in this case. In a few days we will see if the same computing power is maintained by mining on the network or if a part of the miners will stop mining due to the high cost and little reward (counting that the price of a bitcoin does not rise in price)

Considering that every 10 minutes they will receive 50% less bitcoins, research and the path to more efficient miners could be increasing. It also opens a very wide and exciting range, full of possibilities, for all companies in the sector.

Consequences for speculators

For speculators, a halving may be a perfect time to start raising the price of Bitcoin, as the new reward will make Bitcoin increasingly scarce. This of course, because the emission of Bitcoin is reduced and this leads to demand being greater than supply, thus increasing the price of BTC. In short, "It's fishing in a troubled river", and those who know how to handle themselves in these circumstances will be able to obtain great profits.

Implications of the Bitcoin halving event

In terms of halving's broader implications, a lower reward for mining Bitcoin will reduce the amount of money that miners may make by adding new transactions to the blockchain. Miner rewards determine the stream of new Bitcoin into circulation. As a result, halving these payments reduces the influx of new Bitcoin. This is where demand and supply economics come into play. While supply drops, demand fluctuates (increases or decreases), and the price changes as a result.

Bitcoin's inflation rate is also reduced due to the halving event. Inflation is the loss of purchasing power for anything, in this case, the currency. However, Bitcoin's basic infrastructure is designed to be a deflationary asset. To achieve this, halving plays a critical role.

Bitcoin's inflation rate was 50% in 2011, but after halving in 2012, it plummeted to 12% in 2012 and 4–5% in 2016. It now has a 1.77% inflation rate. This means that after each halving, the value of Bitcoin increases. Every halving event has historically resulted in a bull run for Bitcoin. The price rises as supply decreases, causing demand to rise. This upward tendency, however, will not be immediate.

Because of the high cost of electricity used to power the computers that solve the mathematical puzzles, the price of BTC would have to rise significantly for miners to receive half as many coins. Miners will find it difficult to stay competitive and in business if the price does not rise in tandem with the decline in reward. 

Miners will need to be as efficient as possible; therefore, a new technology that can generate more hashes per second while consuming less energy and lowering overheads will be in demand.

Furthermore, there has been evidence of interest in the currency from several countries and their economies may affect the price of Bitcoin. More importantly, the price of Bitcoin is likely to rise due to the increased visibility it is now receiving. The volume of transactions will only increase as more stores, small businesses and even significant institutions participate in Bitcoin and the blockchain.

What if a significant number of miners abruptly dropped out of the race?

To comprehend this, we must first discuss hash rate. For Bitcoin mining, the hash rate is defined as the number of SHA256 computing operations executed per second. This value rises as the number of miners increases, implying that the network is faster and more secure. 

If many miners decide to depart simultaneously, the network may experience a bottleneck for a moment as users migrate to more rapid chains, making it more straightforward for fraudulent users to take over vast chunks of the network.

However, historical evidence suggests that halving events do not cause this reaction. When the first halving occurred in 2012, Bitcoin's hash rate dropped somewhat from December 2012 to mid-February 2013. Following that, both hash rate and mining profitability increased. This means that, once the dust settles, halving is advantageous to both miners and the network as a whole.

A similar scenario occurred during Bitcoin's second halving, but the beneficial impacts took longer to manifest. The hash rate continued to rise steadily, but mining profitability did not recover for nearly a year after the halving date. If this pattern continues for the following event, mining profitability may suffer a long-term decline.

What would have happened without halving in Bitcoin?

This is quite an interesting question. If the halving process didn't exist it would have been a long time since all the bitcoins would have been mined. Therefore, miners will only receive transaction fees as compensation. Fees with little cost since Bitcoin would not have given it time to revalue itself so much that it was profitable to mine.

It would have taken a few years for all the bitcoins to be put into circulation. Initially 50 BTC per block was distributed, which is 300 bitcoins per hour or 7200 bitcoins per day. An amount of 2.628.000 bitcoins would be released annually, which if we divide it by the total possible bitcoins, which is 21.000.000 bitcoins, gives us almost eight years the time it would have taken to put all the bitcoins into circulation.

Projection of added bitcoins in the short term

The table that can be seen below establishes the percentage of bitcoins in circulation with respect to the total and the date on which this figure was reached. We can also see how many bitcoins the period opens and how many it closes, as well as the amount added.

Does Halving Have Any Effect on Bitcoin’s Price?

To answer this question, it could be helpful to look at previous halvings. So far, there have been three since bitcoin’s inception in 2009.

Historically, the Bitcoin price has increased dramatically in the 18 months following the halving. After the first halving occurred in 2012, Bitcoin hit a record high of over $1,000 in November 2013. In April of that year, before the halving, Bitcoin was trading at less than $50.

The second halving occurred in 2016. In December 2017, Bitcoin hit a record high of nearly $20,000, up from less than $1,000 in January of that year.

In general, Bitcoin tends to rise rapidly at some point after the halving. Then there’s a crash, sometimes resulting in drawdowns as large as 90%. After stagnating for some time, the price then begins appreciating slowly leading up to the next halving, and the cycle repeats. This is an oversimplified version of events but it offers a general sense of how halving bitcoin has impacted prices historically.

That said, past performance does not always indicate future results. Plus, markets move for a variety of reasons from geopolitical issues and macroeconomic events. Cryptocurrencies can at times be correlated with broader financial markets, so it’s hard to pinpoint whether halving was the exact cause of any price increase.

How often does a halving happen?

About every 4 years.

Approximately? Halving is complex because it is impossible to predict how long it will take to mine a block. That yes, the software can calculate the time average and based on that time constantly adjust the complexity.

There is a mine complexity readjustment every 2016 blocks. This is done to keep the time between each mined block close to 10 minutes.

To simplify our explanation, we have established that blocks are always generated every 10 minutes. Although this is not always the case, but it usually comes very close. Therefore we establish that six blocks are generated per hour. Thus, 75 bitcoins (based on the reward as of this writing, 12.5 bitcoins per block) are added to the network and put into circulation. Those new bitcoins miners may decide to put on the market by wanting to sell them.

To perform the calculation of the halving process we are going to perform a simplified calculation with integers. This so that the approximate process and deadlines can be understood. We must multiply the 210.000 blocks by 10 minutes (interval between which the blocks are generated). Then divide it by 60 minutes (1 hour = 60 minutes).

Each halving process happens approximately every 35.000 hours, which is equivalent to 1.458 days, that is, 4 years.

The Takeaway

Bitcoin halving, when the amount of coins miners receive in exchange for processing transactions are cut in half, occurs once every four years. There have been three halvings so far as of the time of writing.

Historically, Bitcoin has increased in price following the halving. This trend follows patterns set by the law of supply and demand. Less supply of something can mean its price will increase, so long as demand remains steady or increases.

This fundamental economic advantage is part of what makes some people believe that Bitcoin is unique as a store of value. The only other form of money that shares similar characteristics is gold, leading some to call bitcoin “digital gold.”

I hope this post will help you. Don't forget to leave a like, comment and sharing it with others. Thank you!

#blockchain #bitcoin #cryptocurrency 

What is GEEK

Buddha Community

What is Bitcoin Halving | How it Works and Why Does it Matter?

Most EXPLOSIVE Bitcoin Opportunity 2021 (In Depth Bitcoin Mining Analysis). (HOT NEWS!!)

Volcanoes! No, this isn’t a flashback to your eighth-grade science project. President of El Salvador, Nayib Bukele, is proposing harnessing the geothermal power of volcanoes to mine Bitcoin in his country.

Believe it or not, this idea isn’t just to make the news of El Salvador using Bitcoin as legal tender even more explosive than it already has been. It’s a truly sustainable energy source that El Salvador already uses, and it may be the key to unlocking a green future for mining Bitcoin.

0:00 Intro
0:52 El Salvador, Crypto, Geothermal Energy
3:07 Why Geothermal?
4:52 How much energy mining needs
6:35 Closing thoughts
📺 The video in this post was made by BitBoy Crypto
The origin of the article: https://www.youtube.com/watch?v=NXEGZB5RbDc
🔺 DISCLAIMER: The article is for information sharing. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Not investment advice or legal advice.
Cryptocurrency trading is VERY risky. Make sure you understand these risks and that you are responsible for what you do with your money
🔥 If you’re a beginner. I believe the article below will be useful to you ☞ What You Should Know Before Investing in Cryptocurrency - For Beginner
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Thanks for visiting and watching! Please don’t forget to leave a like, comment and share!

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Fannie  Zemlak

Fannie Zemlak

1596816000

Savage Bitcoiners Volume 1: Interview with Psychedelic Bart

Twitter social icon

Originally published on Citadel21.com April, 21 2020

NamePsychedelic Bart a.k.a. Psycho Bart

Country: United States

**How long have you been into Bitcoin and what got you interested? **

I’ve been into Bitcoin since 2013. I was initially drawn to BTC because I was a volatility junkie and I saw an opportunity to make more fiat. Over the years, I started to look into it more, take it seriously, and accumulate. Once you’ve figured out that Bitcoin is unstoppable, you’re deep in the rabbit hole.

How did you come up with your alias and why don’t you use your real name?

I came up with “Psychedelic Bart” because I grew up loving The Simpsons, Bart’s alter-ego El Barto, and Rob “Killer Acid” Corradetti’s artwork. I don’t use my real name because I value privacy.

Best Bitcoin experience and worst Bitcoin experience?

Best Bitcoin experience – befriending intelligent Bitcoiners over the years. It’s the best when you find people that are on the same wavelength as you. Worst Bitcoin experience – losing Bitcoin to trading shitcoins and leverage. I’ve learned my lesson.

What is the biggest fail you have ever seen in the Bitcoin world?

Mt. Gox. I didn’t get Goxxed but too many Bitcoiners got rekt from the shitty exchange. Learn from this and HODL YOUR OWN BTC.

What do you think about the Bitcoin markets volatility this last year?

Meh. You have to get used to the volatility because Bitcoin is still a new asset or else you’ll never make it out alive.

What are your thoughts on the upcoming halving and how will it affect price?

Not priced in! Most people still have no clue what Bitcoin is and the power it has. Bitcoin will moon again – it was designed to.

What is the biggest threat of COVID to the economy?

Government overreach destroyed Main St. and many small businesses.

What are your thoughts about the US Federal Reserve injecting so much money into the economy because of COVID?

Bbrrrrrrrrrrr.

How do you think this affects Bitcoin?

Anyone with a clue knows that the Fed is addicted to printing money and they’re not going to stop. More people are beginning to learn that Bitcoin is the best hedge.

Why do you think some people, especially noobs gravitate to shitcoins?

False advertising and unit bias. Shitcoiners lie and most people (even the really smart ones) are turned off from Bitcoin’s price.

What do you think most shitcoiners miss about Bitcoin?

That Bitcoin is light years ahead of everything else. Most people fall for the shitcoins’ marketing gimmicks, but when you take the time and figure out what the truth is, you’ll go all into BTC.

What do you have to say to shitcoiners who claim Bitcoin will fail?

Shitcoiners talk out of their asses all the time. I love this legendary quote: “If you don’t believe me or don’t get it, I don’t have time to try to convince you, sorry” - Satoshi Nakamoto.

**Who is the biggest Bitcoin sell out that deserves to be put on blast? **

Trace Mayer. Imagine building your reputation for years, then ruining it in a span of weeks with Mimblewimble Coin and other nonsense.

**Who are some of the most hardcore Bitcoiners you know and why? **

The most hardcore Bitcoiners are the ones that build, code, and HODL. Nothing beats skin in the game. Big shoutout to the contributors who write and review code.

**What Bitcoin startups or companies are you most excited about? **

Too many LOL. Coinkite, BTCPay, Samourai, Wasabi, River Financial, Unchained Capital, Cash App, Swan Bitcoin, LN Strike, Lolli, Fold App, Blue Wallet, myNode, Casa, and much more.

**What are your goto Bitcoin storage options? **

Coldcard Wallet. I recommend using it with a long passphrase for most people, multisig for the advanced crowd.

Any tips you want to give to people new to Bitcoin?

HODL your own keys, get used to the volatility, and dollar cost average.

Name some of your favorite information sources and/or podcasts in the space.

Stephan Livera, Tales from the Crypt, John Vallis’s Rapid-Fire podcast, Fun with Bitcoin podcast, Bitcoin Pleb Talk podcast, bitcoin-only.com, and of course Bitcoin Twitter.

Any last words of wisdom?

Think for yourself and never give up your freedom.

For more Bitcoin Articles check out www.citadel21.com!

Pirate Beachbum_ has been into Bitcoin since 2014 and doesn’t consider himself anyone special. Over the years he has written dozens of articles about Bitcoin, and interviewed many of the top minds in the space. Most people know him from co-founding a rogue group of Bitcoiners, who call themselves the Bitcoin Taco Carnivore Plebs, with his good friend Hodlonaut._

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Abigail betty

Abigail betty

1624323600

How to Buy Bitcoins in 2021? (4 different methods reviewed). DO NOT MISS!!!

Here’s a quick guide for buying your first Bitcoin:
Step 1 – Get a Bitcoin wallet
Step 2 – Find your Bitcoin address
Step 3 – Go to Coinmama and choose the amount of Bitcoin to buy
Step 4 – Enter your Bitcoin address and payment information
That’s how to buy Bitcoins in a nutshell. For a detailed explanation watch the complete video, here’s what I’ll cover:

0:51 - Bitcoin wallets in a nutshell
1:47 - How many Bitcoins should you buy?
2:44 - Choosing a Bitcoin exchange
4:53 - Trading platforms vs. Brokers
6:20 - Registration + KYC
6:55 - Moving your Bitcoins from the exchange
7:44 - Bitcoin ATMs
8:31 - Buying from an individual
📺 The video in this post was made by 99Bitcoins
The origin of the article: https://www.youtube.com/watch?v=tuUO-Q4_b5c
🔺 DISCLAIMER: The article is for information sharing. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Not investment advice or legal advice.
Cryptocurrency trading is VERY risky. Make sure you understand these risks and that you are responsible for what you do with your money
🔥 If you’re a beginner. I believe the article below will be useful to you ☞ What You Should Know Before Investing in Cryptocurrency - For Beginner
⭐ ⭐ ⭐The project is of interest to the community. Join to Get free ‘GEEK coin’ (GEEKCASH coin)!
☞ **-----CLICK HERE-----**⭐ ⭐ ⭐
Thanks for visiting and watching! Please don’t forget to leave a like, comment and share!

#bitcoin #blockchain #bitcoins #how to buy bitcoins in 2021 #buy bitcoins #how to buy bitcoins in 2021? (4 different methods reviewed)

Abigail betty

Abigail betty

1624395600

11 Ways to Earn Bitcoins & Make Money with Bitcoin (2021 updated)

While there are many ways you can make money with Bitcoin in the end there are no free meals. Earning Bitcoins online take time and money and most methods promising free Bitcoins will not be worth the time wasted on them.

Here are the different methods I cover in this video:

0:18 - Intro
1:21- Micro earnings
2:25 - Owning a Bitcoin faucet
3:11 - Signature campaigns
4:18 - Bitcoin trading
5:16 - Bitcoin affiliate programs
6:32 - Gambling (very high risk)
7:20 - Crypto blogging
8:26 - Offering crypto services
8:46 - Bitcoin mining
10:20 - Bitcoin lending platforms
11:14 - Coin doublers and HYIPs (avoid)
12:22 - Conclusion + flowchart

📺 The video in this post was made by 99Bitcoins
The origin of the article: https://www.youtube.com/watch?v=EoG482doRv0
🔺 DISCLAIMER: The article is for information sharing. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment advisor. Not investment advice or legal advice.
Cryptocurrency trading is VERY risky. Make sure you understand these risks and that you are responsible for what you do with your money
🔥 If you’re a beginner. I believe the article below will be useful to you ☞ What You Should Know Before Investing in Cryptocurrency - For Beginner
⭐ ⭐ ⭐The project is of interest to the community. Join to Get free ‘GEEK coin’ (GEEKCASH coin)!
☞ **-----CLICK HERE-----**⭐ ⭐ ⭐
Thanks for visiting and watching! Please don’t forget to leave a like, comment and share!

#bitcoin #blockchain #earn bitcoins #make money with bitcoin #11 ways to earn bitcoins & make money with bitcoin (2021 updated)

Mark Anderson

Mark Anderson

1616591309

Local Bitcoin Clone launch a trending business in crypto platform

The Blockchain App Factory offers a Local Bitcoin clone platform for its client with an impressive outcome that lures many users quickly. It allows the traders to buy and sell cryptocurrency for paying a particular party. This platform comes with peer-to-peer (P2P) with escrow for secure transactions, which helps in gaining trust and comfort with the feedback mechanism.

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