Bitcoin ‘halving’ event: What is it and how will it affect the price?

The bitcoin “halving” event refers to a point when the reward allotted to bitcoin miners is cut in half. Occurring roughly once every four years, the halving is designed to facilitate scarcity in the cryptocurrency.

Approximately every 10 minutes, 6.25 BTC, currently worth over $400,000, is awarded to the miner who validates the most recent “block” of transactions. The data from each block are strung together and distributed to every computer running a node. This forms what is known as the “blockchain.” The initial “block reward” was 50 BTC, currently about $3.5 million, and soon it will be 3.125 BTC, currently over $200,000. The amount of bitcoin mined will continue to decrease over time until every bitcoin has been mined, which is estimated to happen around the year 2140. This makes bitcoin aBitcoin “mining” is a euphemism for the process of validating blocks of transactions.

Mining through this process called “proof of work” is central to the security of the bitcoin network because it ensures there can be no double spending, counterfeits, or fraudulent transactions approved on the network without the need for a “,” such as a bank or the government. Because bitcoin is able to operate without a centralized third party, it is theoretically resistant to outside censorship.

Many other cryptocurrencies use a similar mining process, including litecoin, ethereum classic, and monero. These “altcoins” have their own monetary policies aimed at facilitating scarcity., for example, has a capped maximum supply like bitcoin does, but it has a “fifthening” event every two years instead of a halving event. The fifthening reduces the reward by 20% instead of 50%.following these events in 2012 and 2016.

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