Published on May 23rd, 2020 | by Bill Adams0
Bitcoin Halving – The Past and Present
The 2020 Bitcoin halving occurred and is now the hot topic in cryptocurrency blogs and other platforms. If you are a stakeholder in the industry, this is major news for you. Halving essentially affects the price of Bitcoin among other things. In this guide, you will learn a thing or two about Bitcoin having – both the past and present.
What is Bitcoin halving?
Simply put, halving or halvening is the phenomenon where the mining reward for new Bitcoin blocks is halved. This means that during the event, miners get 50% fewer coins rather than the usual100% for verifying transactions. This event takes place once after 210,000 Bitcoin blocks have been mined which is approximately after every four years. Bitcoin halving affects bitcoin trading because it cuts down the number of coins generated by the network. As a result, supply of coins dwindles; driving their prices up the roof.
Bitcoin halving in the past
We’ve experienced two halving since the inception of Bitcoin. The first one took place in November 2012 and saw the price of Bitcoin increase from $11 to nearly $1,150. The second halving happened in July 2016 during which the price of Bitcoin was at $650. By 16th December 2017, the coin price had shot up to nearly $20,000. Ideally, when reward is halved, inflation goes up with the end result being the increase in Bitcoin price. This acts as an incentive for Bitcoin miners who work even harder to mine more coins. Even in the face of crashes, the price of Bitcoin has never gone lower than before the halving. A case in point is the 2018 bubble that saw the drop of Bitcoin from $20,000 to $3,200 which was still way higher than $650 – the price before the halving.
The present Bitcoin halving
By May 11, 2020, the number of Bitcoin blocks had hit 630,000. The block reward is projected to reduce from12.5 to 6.25 coins. As expected, there are myriad speculations about the effect the new halving will have on Bitcoin traders. If you are a stakeholder, you must have seen some changes on your cryptocurency platform.
No one really knows exactly what the impact will be, but many believe the events of the last two halving will play out again. Increased news coverage, as well as the reduced supply, will lead to a price spike. However, this is largely dependent on the demand of the Bitcoin during the halving period. Since the last halving, the crypto market has really matured. Add that to the fact that other cryptocurrencies have sprung up and that complicates the demand aspect even further. If you own Bitcoin, the subsequent price change will either make you richer or poorer.
Bitcoin halving doesn’t only affect the rewards of miners but has a ripple effect on the price of Bitcoin as well. From the past stats, it is clear that halving always causes the price to soar. The present halving is no different. The exact price increase is not known yet but it has been speculated to go up by a high margin.