Whether you are an amateur or an old-time miner you must have heard of the term Bitcoin Halving in the crypto world. To make the world’s first cryptocurrency efficient and feasible for long term, Mr. Satoshi Nakamoto had it all planned in 2008. But, even today most of you are still unaware of halving process.

Today we will share some of the cool facts as well as the importance of Bitcoin Halving in the world of cryptocurrency. Only 21 Million coins will be released in the entire bitcoin’s lifecycle.  

Due to the limited production of the Bitcoin, it is slightly a step behind the paper currencies.

Now, let’s talk about the Bitcoin Halving, when is the Next Bitcoin Halving event occur and some other cool facts about the halving process.

What is Bitcoin Halving?

Since the time that Bitcoin has been on the market, it has been following a code that was written many years back almost a decade ago. Hence, it works in a similar way as resources such as gold do that why bitcoins are highly valuable. The Bitcoin has the limited supply which is up to 21 Million.

As we continue further to the formal definition of halving, let’s first consider the two factors which will affect the rewards of the Halving. However, to make things more competitive, as the code of the bitcoin was written in a way to make miners compete with each other for the Halving rewards.

With an increase in the competition, miners tend to make use of greater processing power. Thus ruling out the probability of anyone to make the profit can simply use the regular computers or laptops respectively. Nowadays, due to increasing popularity of the Bitcoin, the Bitcoin Mining needs the concoct power of whole data centers.  

Now, talking about the second factor of bitcoin halving according to the code behind bitcoin’s operation, the reward of mining a block successfully gets cuts in half after every 210,000 blocks are mined.

 

In simple words, Bitcoin Halving is when the mining reward is cut in half. The reward is always split into two equivalent halves. Therefore, for an instance, if the Bitcoin reward of mining a block is currently set at 12.5 Bitcoins, it would be chop in half in the next halving event which would be identical to 6.25 Bitcoins per block.

The Bitcoin Halving event does not just come and go for the records. As a fact of the matter is a significant role to play in determining the rise or the fall of the Cryptocurrency. Nevertheless, for other people, those who are using or running an older grade equipment for halving event are not really happy one.

Why is Halving necessary?

We have discussed the Bitcoin Halving and now let us know that why Halving necessary? So, halving event is pretty much simulates assets such as diamonds as well as gold which do not work like the fiat currency.

As we all know that the total amount of the Gold and Diamond is fixed. Thus, the value completely depends upon the commodities available in the whole world. In addition, halving preserves the value of the cryptocurrency since there is defined supply of the Bitcoin after all.

Aftereffects of Cryptocurrency Halving

Now, in the current era, a halving event commonly means that “Many miners with older setups and might not make substantial profits anymore.” Hence, it leads to shutting up off the equipment. The Price of the Bitcoin will likely drop in case majority of miners will shut down their types of equipment. Thus, it seems unlikely to happen.

However, this is primarily because of many older grade mining setups which will not remain economically viable once the Bitcoin Halving will go offline permanently and leave the network completely. Now, due to leaving up the network the overall computing power at present on the given network will reduce.

According to cryptocurrency experts, the sudden drop in the Bitcoin Network summarizes that the transaction confirmations would take more time and also it will lower the price of the bitcoin for a short span of time. Thus, due to the sudden drop in the Bitcoin Networks, more miners will shut down their mining process equipment as they would not be able to make more profits, and the cycle continues until Bitcoin’s Doom.

 

When does Halving Event occur?

The bitcoin halving process takes place after every 2,10,000 block has been found. Thus, it is a characteristic of the Bitcoin embedded in its code. The event will happen roughly after every 4 years.

Now, talking about the first halving event, it occurred in late 2012 where the rewards of mining the Bitcoin reduced from 50 bitcoins per ‘proof of work‘ to 25 bitcoins. The next Bitcoin Halving event occurred in 2016 and then from there rewards of mining again reduced to 25 to 12 Bitcoins per block.

 

Bitcoin Halving Real World Outcomes

The bitcoin halving event has first occurred on 28 November 2012 in the real world of cryptocurrency. Also, the subsidy starts falling from 50BTC per block to 2BTC per block. Now, at the time of subsidy falling the network hash rate dropped from 25,000GH/s to 20,000 GH/s, approximately 20% drop of hashrate.

 

Apart from dropping of hashrate, it will further be returned to its previous high and then it continues to rise from there. At, Halving the price for the bitcoin was approx $12.25 which means that miners receive approximately $612.50 per block. By the end of February, the price of per block was increased by $30 and by April 2013, the price of the Bitcoin per sealed block is approximately increased to $181.


However, there is a big difference in the hashrate and the network hashrate stands up to 1.4 exhaust that is 1.4 billion gigahash per second during mining. The miners can also look at the litecoin for insight which might occur during halving process. The hashrate of the litecoin halving took place at approximately 1.19TH/s. Now, in the month of August 2, 2015, Bitcoin’s halving occurred and after the few days, the hashrate again dropped from 1.19 TH/so 1.11 TH/s.

However, the reality of the hashrate only dropped by about 80GH/s, which is approximately 7% drop rate.    

 

When does Next Bitcoin Halving occur?

Now the next bitcoin halving is estimated to occur in 2020. And again the rewards will fall by half to 6.25 bitcoin per block. The 2020 bitcoin halving event is broadcasted live on the website the havening(dot)com. You can also manually keep an eye on the date next Bitcoin Halving.

 

Halving Events until now are as follows.

  • 28 November 2012 {First Bitcoin Halving}

> Price Before: $12  

> Price After: No significant effect on the Bitcoin Price.

> Reward: Mining reward was cut from 50 Bitcoin per block to 25 Bitcoin per block.

 

Effect on the market: Since during the first bitcoin halving the environment was totally different and were not that much popular anyway. Hence, the bitcoin halving event had a negligible impact on the market as well as on the mining community. However, we have told you earlier that the price will drop down to 50 BTC to 25 BTC which is quite a huge difference. This response to the Halving process event was not the prime in comparison to the price of Bitcoin Halving in 2013.

 

  • 9 July 2017 {Second Bitcoin Halving}

> Price Before: $650

> Price After: $675

> Reward: The mining reward was cut from 25 BTC to 12.5 BTC per block.

 

Effect on the market: The second Bitcoin Halving chart quite surprisingly increases in the Bitcoin price. Before the Halving event, the price was still at around $650 and after the Bitcoin Halving increased up to $675. Now, the BTC exchange rate had a drop of more than $30 and taking the price down to $630 from $660. Until the BTC halving event itself, makes the price stabilized at $650.   

 

Even though the Halving is an event which is not very well cherished among the mining communities. The representatives of the bitcoin mining community include Jihan Wu and Valery Vavilov and are quite optimistic as of now, there won’t be enough negative changes rather than the drop in the hashrate in the next bitcoin halving event.

 

The most interesting fact to be noticed is that after the halving event, the bitcoin reward for each block will cut to half. But apart from this, the miner may still receive the bigger value in terms of USD as compared to previous year. This is because of the Bitcoin price, which is nearly now been quadrupled as compared to last year.

The Final Note

We’ve shared everything about the Bitcoin Halving and we will hope that the facts that we have shared will clear your doubts. In case the block reward for the BTC is set to 12.5BTC per block and after the bitcoin halving event, it will become 6.25BTC per block.

Most probably the next bitcoin halving event is expected to occur in the May 2020. Now, you all know how important bitcoin halving is and how smart Nakamoto is. Make sure you have read all the points and facts carefully while crypto trading.

If you have any questions or you have to learn more about the Cryptocurrencies and crypto trading feel free to ask any question in the comment section. Also, if you want regular updates related to cryptocurrencies then do follow us.

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