Bitcoin Halving in 2020: What We Need to Know?

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The third halving in the history of Bitcoin will happen in 2020, and any investor who wants to buy this asset or has already done so in the last few weeks should understand that cryptocurrency is currently on the rise after cryptosomes, which is likely to continue next year.

What is Bitcoin Halving?



Bitcoin halving is a half reward to the miners of this coin who find new blocks in the bitcoin blockchain (its network). Blocks record information about any (large or smallest) bitcoin transactions without exception. Each time a bitcoin transaction occurs, it is recorded in the next block found by the miners, as in a log (registry).



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However, the block can only be found by solving special tasks with the help of a miner / set of miners. The block records the transactions, the correctness of which is verified by the miner, and only after filling the block transactions the miner receives a reward - a "newborn" coin called " bitcoin ". In essence, it is the issue (issue) of bitcoin. However, competition among such computing farms and entire factories in the world is simply enormous!

What is the effect of halving?



Halving the fee (emission) by half affects the number of miners who receive bitcoins for mining bitcoin blocks, which has historically had a positive effect on the price of the main cryptocurrency in the long run. Bitcoin is arranged so that only 21 million coins can be mined in the end.

Halving is designed to prevent coin inflation. Unlike central banks, which can print cash at their discretion, the amount of bitcoin is limited. Thus, cryptocurrency becomes more scarce and valuable, and even more like gold than a "freely printed" national fiat currency.

Bitcoin mining is like a final breakthrough when only 1 person who hits the finish line (fills in a block) receives bitcoins. Previously, the reward for the block was 50 bitcoins, and these coins then cost "cents". However, two previous halving games have already reduced the reward twice, and now it is 12.5 bitcoins per block.

In 2020, the reward will drop to 6.25 bitcoins (now about $ 60,000). Halving is affecting miners, as some of them come to the conclusion that mining costs - electricity and power - are not worth the cut, while others will still hold on to their mining devices, given that demand is increasing as the world's coin stock is already nearing its final supply (up to 21 million).



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Each halving is a reminder that stocks are running out, though the last bitcoin should come out around 2140. And each halving thus limits the number of new bitcoins created, making existing coins more valuable.

How does halving affect the price of bitcoin?



Halving tends to increase bitcoin prices in the long run. Prior to the previous bitcoin halving in 2016, there was a slow but steady rise in prices over the course of about a year.

Finally, it should be noted that a price increase can only make sense through supply and demand. Limiting Bitcoin reserves to 21 million coins makes them more rare and valuable. This shortfall, coupled with the rise in people's awareness of bitcoin and cryptocurrencies in recent years, means that demand and price are likely to increase inevitably.

So if you want to buy bitcoin, now is the time to do it, because their price will slowly rise before the halving of 2020. And please don't waste your bitcoins on pizza.



Thanks for taking your time to visit.


Posted via Steemleo | A Decentralized Community for Investors


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