Bitcoin is the world’s largest and most prominent cryptocurrency. Bitcoin halving is a process that does not only impact the flagship crypto asset but also the general market and crypto miners.
This is a complex yet important concept you need to be familiar with, especially if you are interested in buying or trading the crypto king.
As a beginner, it can work in your favor, as the more you know about the crypto space and Bitcoin, the easier it can be for you to form an investing or trading plan. The crypto space can be volatile and can cause inexperienced investors or traders to lose track of their progress or crypto-related operations.
Therefore, it is crucial to not only know about the halving process but also know when the next Bitcoin halving will occur and more. Here are all the details you need to know about halving.
Describing What is Bitcoin Halving
The term ‘halving’ indicates what the process is all about. Halving is a process where the future supply of the flagship cryptocurrency is cut into half. This means that the total number of Bitcoin in circulation are always limited.
The benefit of BTC halving is that this process ensures the flagship crypto asset is kept safe from inflation. While the demand for BTC keeps increasing, the supply is kept limited but it causes the value and price of the asset to increase.
Are Miners Affected?
New digital coins are created by miners through a process called mining. This process digitally adds transaction records to the blockchain. When a new transaction is validated by the miners on the BTC network, they are awarded new Bitcoin.
However, when Bitcoin halving occurs, the number of new BTC awarded to the miners is also cut in half. This is how the crypto miners are affected by the mining process.
Is the General Crypto Market Affected?
The process of halving is a complex and affects different aspects of the crypto space. Even though mining is a process necessary to keep BTC from inflation, it does have an impact on the crypto market.
Bitcoin is not only the largest cryptocurrency but it also has an undeniably high dominance in the crypto space. Whenever the price of the digital currency falls or surges, the prices of the altcoins are also affected. Usually when the price of Bitcoin drops, the prices of other assets also drop.
However, whenever the crypto king is in a bullish run, the altcoins tend to underperform. This is because the investors prefer to take their investments out from altcoins and focus them on Bitcoin.
The opportunity to accumulate more and reap the benefits (if any) later are increased, thanks to the Bitcoin halving process.
After the halving process is complete the price of the flagship digital asset increases, which is why many people prefer to invest in as much BTC as possible until the halving.
Basic Mechanics of Halving
The halving process occurs after every four years. According to this, the next Bitcoin halving is anticipated to occur soon. However, there are two countdowns keeping a track of the next halving.
One countdown may move faster or slower than the other because a new block is added to it after every 10 minutes.
Therefore, a more efficient way to calculate the ETA of the next BTC halving is after every 210,000 blocks are complete.
Timeline of BTC Halving
If you are interested in learning about Bitcoin halving then you also need to know the timeline of this process.
Bitcoin was created in 2009 and at the time, the block reward was 50 BTC per block.
Four years later, in 2012, the first halving process occurred. This slashed the block reward in half, amounting to 25 BTC per block.
The second halving occurred four years later in 2016. After this, the block reward was reduced further, turning it into 12.5 BTC per block.
The next Bitcoin halving, also the third, occurred four years later in 2020. After this, the block reward was brought down to 6.25 BTC per block.
According to this timeline, the next BTC halving is set to occur four years later in 2024. After this is complete, the block reward will be reduced to 3.125 BTC per block.
Can you Benefit from BTC Halving?
The experienced traders have a few strategies they use to benefit from Bitcoin halving. One of the ways, you can also take advantage of the halving process is by using the buy and hold strategy.
According to this strategy, you can purchase Bitcoin and hodle it until after the halving process is complete. Since the price surges after halving, you can benefit from it.
Conclusion!
Any one new to the crypto space needs to know about complex concepts like Bitcoin halving. This is important to know as this process affects different aspects of the crypto space. Therefore, if you are interested, you should know the details mentioned above about the halving process.
