What is Bitcoin Halving? Everything about the Bitcoin Halving

What is Bitcoin Halving? How important is this event for digital cryptocurrencies? Will BTC be affected by each Halving? BHO Network will answer questions about this issue in detail through the content of the reading below. Please follow the details to know more useful information related to virtual currency!

1. What is Bitcoin Halving?

Bitcoin Halving is a block reward halving event. This chapter is usually held every 4 years of Bitcoin. After each batch of 210 thousand Blocks is released, the total coins combined through the collections account for 32 times. According to the aggregate data from 2012 and 2016, Bitcoin has had 2 halvings. By March 2020, the virtual currency had a 3rd Halving round.

2. Why is Bitcoin Halving Important?

Halving is an essential part of Bitcoin and is required for users to be able to conduct transactions. Why is this event important for Token? The role of BTC Halving? The following content shared by BHO Network will help you better understand this issue.

2.1 Preventing inflation

In 2018, the world's financial markets experienced a severe crisis. To handle this problem, experts have launched a Bitcoin product. Banks have also made users lose confidence in abusing power to increase wealth.

When Satoshi Nakamoto created a decentralised approach by removing the dangers common in the traditional financial industry, specifically, the issue he is referring to here is inflation. This situation occurs when centralised and authoritative authorities are only free to print money when it runs out to cover losses.

Another factor that Satoshi Nakamoto wants to discuss is the appearance of new money in circulation, making the currency's value decline and adversely affecting the financial market. Looking back at the economic events of the world, you can see that there was a period when money became worthless. Bitcoin's supply is limited to 21 million units, and there is no increase.

The developer has extended the time to helping Bitcoin grow and mature through rewards. This delay aims to develop the time it takes to reach the 21 millionth coin.

Read more: What is STO (Security Token Offering)? A details guide

2.2 Increasing Bitcoin

Value The asset's value has never been financially guaranteed but is demonstrated through its superiority as a decentralised coin. The moment Satoshi independently proved the value of Bitcoin, the financial market took a new path.

Users have realised that the user himself does not need to go to the bank. The assets can still be frozen at any time. You will no longer depend on the bank, do not abuse power over money. The unique thing is that users do not have to pay any fees for money transfers.

Bitcoin brings a lot of value to users. Therefore, more and more people use this Token. Many players participate in the virtual currency market, and using Bitcoin has unintentionally increased virtual money's financial value and usefulness in life.

Satoshi realised that players would need time to get used to the new idea and multiply its popularity. He also predicted that the authorities would prevent the development of virtual currency or keep it in the dark. The Halving event was born here to raise the level of scarcity.

The halving process will halve the value of the coin increment. When the supply is less, the demand will be stimulated and multiplied.

2.3 Making Time for the Cryptocurrency

The original design of Bitcoin was mined by one or a million people but without any difference. The developer has created many concepts of mining difficulty through an algorithm based on the number of users and contributed computing power.

The design of the Bitcoin Halving ensures that each block has an average time of 10 minutes to resolve the problem. The more "miners" with excellent computing power, the faster the number and time of mining blocks are guaranteed. This means players will get a shortened mining time by 21 million Bitcoin units.

Besides, developers worry about one problem in Bitcoin block mining: users don't care about the process. In the first stage, if the number of coin users is small, it will cause many disadvantages. BTC Halving will impact the interest of "miners," extending the time to increase profits through transaction fees. The condition for the plan to be successful is that the Coin must become a trend and be used primarily.

3. How does Bitcoin Halving happen?

Bitcoin's Halving happens automatically through a launch function built into the protocol. The code on Bitcoin Core Github is written as follows:

CAmount GetBlockSubsidy(int nHeight, const Consensus::Params& consensusParams) { int halvings = nHeight / consensusParams.nSubsidyHalvingInterval; // Force block reward to zero when right shift is undefined. if (halvings >= 64) return 0;

CAmount nSubsidy = 50 * COIN; // Subsidy is cut in half every 210,000 blocks which will occur approximately every 4 years. nSubsidy >>= halvings; return nSubsidy; }

After every 210,000 blocks are generated, the reward will be halved. It is estimated that the time for each block of 210,000 blocks to be mined is 4 years. For the 3rd Halving (May 2020), the reward will be reduced from 12.5 BTC to 6.25 BTC.

4. History of Bitcoin Halving

An issue related to "What is Bitcoin Halving?" BHO Network wants to share with readers the history of the formation of BTC. When you understand the development process of Coin, you will appreciate and plan investment and development accordingly.

4.1 Bitcoin First Halving

In November 2012, the first Bitcoin Halving event took place, total block of 210,000. The block reward is reduced from 50BTC to 25BTC for each block mined. This number represents the following pieces of content:

Bitcoin price surge

Bitcoin started the Bull Market (muscular growth) one year before the Halving event (1/2011) and lasted until after the Halving 11/2013. Growth as of December 2013 is $1,114, a rate of +50.162% from a value of $2.29. However, Bitcoin went downtrend and lost 80% of its value 1 year later.

Hashrate plummets

Two weeks after the Halving, Bitcoin's Hashrate dropped by almost 37.86%, from 29,145T to 18.11T. Through the aggregated data, users can realise that the amount of Miner has decreased much after the Halving.

Mining Profits Decline

After Halving, Bitcoin Mining Profits Drop by Over 60%. To restore to the original level, the system needs up to 2 months to re-up.

4.2 Second Bitcoin Halving

July 2016 took place the second Bitcoin Halving at block 420,000 after nearly 42 months. At this time, ASIC miners appeared, speeding up the Bitcoin mining process 150 days faster. The reward of the 2nd Halving is reduced to 12.5BTC for each block mined. The figures for the 2nd Halving are as follows:

Bitcoin

Price surges Bitcoin price entered the Bull Market 9 months before the halving event and lasted until a year after the Halving. This activity can be affected due to the halving 150 days earlier than the 1st. However, when the event ended, the Coin's value increased sharply from $213 to $19,500. Not long after that, Bitcoin entered a downtrend cycle, and the value plummeted to 80%.

Hashrate Reduced

Bitcoin's hash rate after the Halving experienced slight volatility but did not cause much of an impact. The number of Miners participating in the network has been expanded and maintains the Coin mining confidence.

Mining

Profit Drops Bitcoin Mining Profit Drops ~51.2% after Halving. The system needs 10 months to restore to the original state to recover the actual value.

Read more: What is MLM Coin? Everything you need to know

5. How does the Halving affect the price of BTC

According to the opinion of many experts, the upcoming Halving will push the price of Bitcoin. This prediction is based on the Bitcoin Halving being a bullish event that reduces the inflation rate of assets with a fixed supply of 21 million (in Why the Halving Matters to Bitcoin).

During the third Halving, the annual release rate of BTC dropped from 3.7% to 1.79%. According to the issuer's note, the price of BTC has had many positive changes, such as:

• Bitcoin price increased from $12.31 to $994.21 during the first Halving. One year later, the growth rate reached 7,976%.
• The price spiked from $650 to $19,535 during the 2nd Halving. Growth reached 2,902%.

For the entire Cryptocurrency market, Halving has pulled the value of Bitcoin up. The coordination between the media and investors has created the effect of a bird of prey attracting users. As the Coin rises in price, more articles come out, and the cycle continues to repeat.

Related posts:

• What is Bitcoin Hard Fork? History and Timeline
• What is Cloud Mining? Learn the basics of Cloud Mining

As can be seen, Halving is a very beneficial event for the virtual currency market. Hopefully, the content BHO Network has just shared with readers around the issue of "What is Bitcoin Halving?" helped you solidify your knowledge base about cryptocurrencies. Be wise in making decisions on e-commerce exchanges and become a billionaire with coins.