Bitcoin owners probably do not want to sell their Bitcoin, when the value of Bitcoin may be higher the next day. Bitcoin Halving plays a very technological and economic role in ensuring the continued viability of Bitcoin as a digital currency.
Satoshi Nakamoto, the founder of bitcoin obviously didn’t want to expand the cash offer for Bitcoin, which explains why the function of the Bitcoin halving events was implemented in the protocol. It is possible because Bitcoin’s network block space can be substantially recreated, which means that miners can generate revenue based on transaction fees.
Nakamoto decided to control Bitcoin’s supplies similarly, limiting the rewards you can collect when you successfully add a block to the blockchain. Bitcoin halving is both an excellent mechanism designed to solve many potential problems that have positively affected the currency as it ages and becomes more widespread.
All in all, new Bitcoins are entering the world as a reward for miners when they dig a Bitcoin block.
For example, if today, each miner gets 12. 5 Bitcoins to solve a block, they only get 6. 25 BTC after the next halving event.
So if today, each mining operator gets 25 Bitcoins to solve a block, only 12, 5 BTC is received after the halving event.
Next Bitcoin Halving:
Interestingly, Bitcoin has only been halving twice since it was introduced into the world.
Despite the fact that Bitcoin has been accepted in our financial lives, most of us are not familiar with the technical aspects of Bitcoin, such as halving and mining. Bitcoin halving is a tool – and – a – method to prevent Bitcoin from losing its value due to overburdening with time.
Next Bitcoin Halving: At some point in May 2020, the next Bitcoin event will take place and the reward will be reduced to 6, 25 Bitcoins per block.
Importance of Bitcoin Halving:
Bitcoin, or cryptocurrencies in general, have an extraordinary relationship with their underlying technology, the blockchain. The blockchain is progressing in a very different way than Bitcoin, but it was the initial explosion of Bitcoin in the general financial space that led people to take the blockchain seriously.
Bitcoin is a digital currency that allows two people to enter into a financial transaction without intermediaries.
Part of what makes bitcoin valuable is the fact that there is a limited stock of 21 million bitcoin. As competition intensifies, miners are increasingly burdening processing power, transforming bitcoin mining from a hobby activity in the bedroom into a hobby, which today requires the computing power of whole data centers.
As the deflation curve of bitcoin becomes more aggressive after the 2020 bitcoin halving, it will inevitably begin to evolve into an asset, with all the features sought by large institutions and central banks in reserve.