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What is Bitcoin Halving and what does it mean? When does it happen? How does it affect the value of bitcoin? In this post with the help of an article We answer these questions in simple language from the 99bitcoins website.

Summary of Halving Bitcoin

On average, every four years (after 210,000 blocks in the China blockchain), the production of new bitcoins abruptly halves, or more precisely, the reward is given to miners for adding a block to the blockchain decreases by 50%. Finds. Halving was put into the network code by Satoshi Nakamoto, the anonymous creator of Bitcoin, to control bitcoin inflation.

Since the Halving event halves the supply rate of new bitcoins or the same supply, experts believe that this event has a significant impact on the price of bitcoins and can increase the value of bitcoins over time.

This is a summary of the Halving event for those who do not have much time to study, but if you are looking for more detailed information, it is better to keep reading.

What does Bitcoin Halving Mean?

To understand the concept of bitcoin halving, one must first get acquainted with the basic concepts of Bitcoin Mining Get acquainted. In short, volunteers, known as miners or miners, provide the network with the ability to process their hardware in a process called mining, which requires power consumption and equation solving, to validate and secure bitcoin transactions. Advanced math. The network generates some bitcoins as a reward and gives them to miners. Halving halves the miners’ bonuses every four years.

When Satoshi Nakamoto was setting the rules for the Bitcoin protocol, he emphasized two rules the most:

• Bitcoin inventory is finite and limited to 21 million units.
• Reduce the number of bitcoins produced per block by 50% after every 210,000 blocks.

Halling or Halving?

the door Pronounce having the letter “L” is not pronounced. Therefore, although the term Halloween is also used among Persian-speaking users, Halving is more correct.

How many years does bitcoin halving occur?

Considering that an average of 6 blocks are found per hour and the Halving event occurs after every 210,000 blocks, it can be said that Halving occurs approximately every 4 years.

At the beginning of bitcoin activity, 50 bitcoins were generated every ten minutes, or more precisely. The first miner to reach the answer to the block equation received 50 bitcoins. In 2012, after the first halving, the extraction bonus reached 25 and in 2016, after the second hawing, the extraction bonus reached 12.5 units. Today, as we write this article, about 12.5 bitcoins are generated every ten minutes. This figure will be reduced to 6.25 bitcoins after the next halving, which will take place in May 2020.

What is the philosophy of the Hawing event?

You may be wondering why it was necessary to design this change in the Miners’ Rewards and why the reward rates for the Miners should not be kept constant. Will this event not end to the detriment of the miners?

The answer to this question lies in the law of supply and demand.

If new bitcoins are generated quickly, or the number of bitcoins that can be produced is infinite, the high number of bitcoins in circulation will gradually devalue them.

Etherum creator Vitalik Buterin, in a personal note to the BitcoinMegzin website, explains the need to slow down the distribution of bitcoins through the Halving event:

“The main reason for doing this is to control inflation. Also one of the biggest mistakes of traditional Fiat currencies, which are controlled by central banks, is that they can print as much money as they want, and if they overprint, the value of the government currency, according to the law of supply and demand, rapidly declines.

Unlike conventional currencies, bitcoin is designed to act as a valuable commodity, such as gold.  So the amount of gold in the world is limited, and with each gram extracted, it becomes more difficult to extract the remaining gold.

It is because of this limited supply that gold has been able to establish itself as a medium of exchange and value storage over the past 6,000 years. “We hope Bitcoin can do the same.”

On what date will the next Hawing take place?

According to the average time required to produce the block (10 minutes), the next halving should take place in May or finally June 2020 (May to June 99).

To view the Halving bitcoin countdown counter you can go to the page Bitcoin prices Visit the digital exchange site.

The truth is that the time of bitcoin blocks is not exactly 10 minutes and on average it reaches ten minutes. Since the creation of Bitcoin, the average time required to create a block has been 9 minutes and 20 seconds, not 10 full minutes, which is about 7% faster than our estimated time.

How does Hawing affect the price of bitcoin?

The most important question people ask about Halving is whether it will affect the price of bitcoin, and the answer is that no one knows. In fact, on paper, and in theory, assuming demand is stable, if supply halves, the price should be twice as high to meet demand, but it cannot necessarily be said that demand remains stable and does not decline.

In 2016, a week after the Halving incident, there was not much change in the price of bitcoin. Bitcoin was around $ 650 at the time, and a week later it reached $ 675, which was not a significant change. But more than a year later in 2017, the price of Bitcoin reached its highest point in history, $ 20,000.

The first bitcoin halving happened on November 28, 2012, after the extraction of the 210,000th block. Bitcoin was priced at $ 13.42 at the time, and Halving did not seem to have much of an impact on the price. It is true that the price of Bitcoin soon reached $ 230, but many attribute the increase to the financial crisis in Cyprus.