Bitcoin (BTC) Halving is Coming: Why You Should Care
Bitcoin halving is not a novelty concept as the first halving that brought the mining rewards from 50 BTC to 25 BTC units took place back in 2012, while the second halving that came 4 years later in July 2016 lowered the block reward to its current state of 12.5 Bitcoin.
Halving is described as a form of a self-sustaining mechanism, created to reduce the mining rewards, increase the difficulty, and control the supply of Bitcoin to avoid overflooding the market with Bitcoin, that way avoiding inflation rates.
Bitcoin is set to go through another “round” of halving in exactly 478 days, counting from the first day of February, so here is what you should know in advance.
Bitcoin Halving Coming in 478 Days: What You Need to Know
The current market capitalization of Bitcoin weighs around 61 billion dollars even after losing nearly -90% of its value in the course of the last year, with more than 17 million BTC units in circulation.
The total amount of Bitcoin ever to be issued is set at 21,000,000 BTC units, which represents the total supply of the first and the largest cryptocurrency in the market.
To prevent flooding the market with BTC and going towards inflation, which means that Bitcoin would start losing on its value, Satoshi came up with halving, also used by the first fork to be derived from BTC – Litecoin (LTC).
Halving should take place automatically on every 4 years as a form of decentralized control of the total coin supply.
The aspect that would be affected once the next halving takes place is the mining reward.
The mining reward is currently set at 12.5 BTC for miners who are known to be the spinning wheel of the Bitcoin mechanism as new blocks are being created through solving equations, at the same time validating transactions and getting rewarded.
This mining reward will be halved in the spirit of halving and with the idea to preserve the stability of Bitcoin, which means that in 478 days, mining reward will be reduced to 6.25 Bitcoin.
What Happens When Bitcoin Halving Reaches Zero?
Since halving is set to occur once again after the block reward reaches 6.25 Bitcoin, we can easily come to conclusion that in around 12 years, the block reward for miners is theoretically arranged to reach zero.
Halving is set to occur in an automated fashion, so the block rewards will continue with halving every 4 years or so, which means that eventually, miners will end up working for block rewards of 0.
However, this zero is not actually worthless as it is supposed it will generate 0.0001 Bitcoin block rewards.
In case the price of Bitcoin would reach a certain level of stability at a higher value in the market during the course of 12 years, miners wouldn’t be left empty-pocketed and Bitcoin won’t overflood the market.
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