What's Bitcoin Halving?

Published 2020-05-22 11:15:54

Learn what's the Bitcoin halving, what it means for bitcoin owner and miner, why it will happen again and what to do about it.

We will tell you here exactly what is the Bitcoin halving, what does that means to you as a bitcoin owner or as a bitcoin miner and we will understand when will it happen again and what to do about it. 

Bitcoin halving definition

The Bitcoin halving means that the amount awarded to miners for mining one block of the blockchain is reduced to 50%. In 2009 when it all started, the reward for mining one complete block was 50 BTC. 

210,000 blocks later, approximately 4 years, it was again halved from 50 to 25 and in May 2020 it was halved again to 12.5 BTC per block. 

Although Satoshi Nakamoto (either person or consortium) didn’t give much information on the reason behind this, it means that the reward for miners to create a Bitcoin will be less each four years, expecting to be 6.25 BTC per block in the next four years, between may and june 2024. 

Why does it affect me?

There are lies, and then, there are statistics. The data from the previous 2 halvings, saw an increase of the price approximately one year after it was done. Since more people are or were aware of this halving in 2020, predictions were hitting high volumes for the Bitcoin prior to the 12 months but again, statistics can lie so we are still expecting for the Bitcoin to have a surge either by the end of the year or close to May 2021. 

So, should I buy Bitcoin now?

If you are new to Bitcoin, let me repeat that this is a very high risk investment and you should not invest more than 10% (or money you can lose) on cryptocoins and its technology. Nevertheless, according to history, it is still a good time to purchase Bitcoin, just be sure to buy it on a verified site or exchange.

Will transactions with lower fees still be secure in the future?

The main response from Satoshi Nakamoto is yes. Only 21 million Bitcoins will ever be created and by the end, the earnings will be very low, making us think about its security because Miners will get less for actually more work but Satoshi thought about it (if ever so quickly) and the white paper stimulates fees in the later time. 

Also, we expect that the Satoshi unit, a ten millionth of a Bitcoin, or 0.00000001 BTC will then be divided or split into smaller units (since the idea that offer could increase with a higher demand for smaller units of a limited amount of BTC coins.

Will it influence the cost of Bitcoin?

We are now in the 11th year of Bitcoin and so far there have been 2 halvings, in 2012 where the Bitcoin went from only $12 USD to over $650! Then in 2014, after the second halving the price surged from less than $650 reaching $20,000 by 2017. Usually the peak in the price has been 12 months after the halving is done so, if by any chance there is a surge on Bitcoin price, we expect it to be between December and May 2021. Bitcoin is currently close to $10,000 by the end of May 2020.

What will happen to Miners and their fees? 

This is basically the whole point around the halving and whether Satoshi Nakamoto was right about the long-term usage of the theory, since he or she or they disappeared long before Bitcoin was popular. So the white paper claims that in order to prevent fraudulent transactions and possible scams, the award of the mining should be cut in half every 210,000 blockchains and will be closer to 0 each time, without ever arriving. 

Their fees on the other side, are supposed to help with this by alleviating the economic pressure of the miners and translate them into fees but that might cost us, the end users, a lot more than using cash. So hopefully when the time arrives, the Bitcoin Community will have discussed it deeply and will have a fair solution to all parties involved.

When is the next halving and should I prepare myself?

The next halving will be in exactly 210,000 blocks and it is happening approximately each for years so we expect that the next halving of the bitcoin will be in 2024, going from 12.5 BTC awarded per block to 6.25 and we expect the daily creation of Bitcoins will fall from around 900 to 450 Bitcoins. 

The best way to prepare is always to have more Bitcoins in your wallet. You can buy Bitcoin and cryptocurrencies in major exchanges and also claim for free a lot of Satoshis and other alternative crypto coins like Litecoin, Ethereum, Dogecoin and Bitcoin Cash. 

Be sure to check our page to claim 6 of your favourite crypto coins at Crypto Mining Game!