The value of Bitcoin halves every four years as per the sequence, and inMay 2020, the latest Bitcoin halving event has happened. Now, many people are still unaware of what Bitcoin halving is and how it affects the cryptocurrency market. In case you have the same questions, keep reading to know more about what happens when Bitcoin is halved.
The halving event of Bitcoin remains one of the most anticipated occurrences in the entire cryptocurrency community. Bitcoins are released in each block every ten minutes. In May 2020, the BTC was halved from 12.5 to 6.25. What draws so much attention to Bitcoin and the associated halving event is the possibility of unlocking riches. Many people have different speculations concerning the periodic decline that continues to occur in the mining rate of Bitcoin.
Why is Bitcoin Halving a Point of Attention?
One of Bitcoin’s essential components is the availability of block rewards, which are of high importance to miners. As the Bitcoin blockchain is leaderless, it is the block rewards that ensure security and safety.
The matter of concern is that the halving event of Bitcoin every four years will essentially bring the value to zero in about a decade. It is likely to be the entire security layer of Bitcoin as there will not be any economic incentives for the miners.
What Exactly is the Bitcoin Halving Event?
Every ten minutes, new Bitcoins enter blocks in the form of block rewards. When miners use expensive computational movement for mining, it means that they are producing these Bitcoins. The value of BTC or bitcoin reward is exactly halved after every four years when about 2,10,000 Bitcoins have been mined. Bitcoin started in the year 2009 when the cost of BTC was 50. The first having event took place in 2012 when the value decreased to 25. The following halving event occurred in 2016 when the price halved from 25 to 12.5. The latest halving event was from 12.5 to 6.25 in May 2020.
Bitcoin’s monetary policy is drastically different from that of the state-issued policies. Unlike the state-issued policies. Bitcoin is shared across a network, and its monetary policy has been written with the help of codes.
It is yet a matter of speculation whether BTC will soon be halved to zero or there will be an increase in the supply chain. One thing is clear: Bitcoin as a cryptocurrency will continue to be mined.