The alpha and omega of bitcoin as a distinct currency is its two significant features – mining difficulty adjustment, and its rate of disinflation issue. Unlike others, Bitcoin is prevented from enormous buildup through the process of “Halvening,” which occurs once in every four years or takes place after the addition of 210,000 blocks.
What is Halvening?
The network gives a bitcoin in turn of every block added by a miner. To be specific, every miner leads to the creation of a Bitcoin when the blockchain rewards him for the transactions. Following this, the miners sell the bitcoin instantly, and a new Bitcoin releases in the crypto world.
Halvening, occurring quadrennially, descends the reward to its half value to avoid the outgrowth of Bitcoin. For example, if the miners receive 10BTC with each block, they will earn only 5BTC by the next halvening. On the contrary, the cost of mining will be inversely proportional to the reward of mining. Supposedly, the cost of a single Bitcoin mining is $5000 at present; it will ascend to $10,000 the next halvening.
Investors buy at higher prices to predict growing generation cost/BTC; miners use current value to justify paying higher production cost/BTC; investors buy at even higher prices to account for rising production cost, and this results into hype cycles.
On May 28, 2020, befalls the halvening but neither the production cost nor the halvening can tell us the reasonable price per Bitcoin currently. Not only the generation but also the market should be taken into deliberation.
The supply territory will do its surface of the business, and the Bitcoin valuation can be revealed only by the real-world requirement for a decentralized, borderless currency, and store of value. While its all an apple-pie order, the demand market depends on the customers of the cryptocurrency sector.