Last Updated on June 16, 2023 by cryptocreed
Let’s understand what is Bitcoin Halving in 2023
A Brief Discussion About the Bitcoin Halving
Here is the term “bitcoin” which means cryptocurrency. Cryptocurrency is used as a digital asset. It secures all the financial transactions and also recorded all of its digital databases. Bitcoin halving is an event organized by the one annually to gain the reward which is reduced by half.
To verify the transactions it must need to have 50 % of its benefits for all the traders because it is possible to reduce some of the new bitcoins when it’s generated digitally. What’s important in this case is a good network. Cryptocurrency is basically against the law. It has so many bad sides to handle.
What is Bitcoin Halving?
So, now the question arises, what is bitcoin (BTC) halving? The Bitcoin protocol cut all of its blocks to gain extra rewards by getting half of it. Bitcoin halving begins when it receives 50% fewer BTC to verify all transactions.
After crossing 2,10,000 blocks bitcoin goes through the process called “halving”. This protocol was integrated by Satoshi Nakamoto. Whenever bitcoin cut down the chains, the halving method cut off the new bitcoins in half.
Learn why this happens and how it affects Bitcoin’s price:
In this case, all over the world, only 21 million bitcoins can exist.
Why does Bitcoin have a 21 million upper cap in its first place?
- According to David Schwartz, usually, the US dollar controls by the Federal Reserve. Anytime, they can claim to regulate the money, or anybody can inject extra cash into the system. There are so many traders who can use this unethically so that’s why Nakamoto fixed an upper cap to make it safe and secure for random people.
- When this process was first designed, it was unclear. There was no fixed upper cap. When it first gets a supply, some investors wanted to acquire it before it runs out of the market.
- So, Nakamoto understands his flaws, and that some ways are needed to distribute the currency. Initially, it started to distribute the bitcoins digitally before it goes out of hand.
Understanding the mining and deflation:
If you have 21 million caps, it simply defines that bitcoin is a deflationary asset. The term here “mining” is a process that solves the hard puzzle called cryptographically.
When one sends a transaction in bitcoin, the miners picked them up from their block. For the miners, the block reward must be economically incentivized. Even if there is no such stopping mechanism, still the miners can do it.
How bitcoin miners stay profitable?
There are lots of ways to be profitable for all the miners. Some of them are going to be discussed below.
- Miners can continue their operations even with cheap electricity and even in cold weather. Usually, a cold environment or weather helps to the consumption of the energy.
- Minors can buy energy-efficient hardware. Some of the examples are there like Dragonmint T16, Antminer S9, etc.
- Miners can also go for some alternative sources of electricity to move on their operations from the drastic condition.
Frequently Asked Questions
When is Bitcoin halving 2020 date?
Bitcoin’s halving date is occurring on 11 May 2020.
Bitcoin halving 2020 countdown
You can track bitcoin halving on coinmarketcap
Previous bitcoin halving date
November 28, 2012: The first Bitcoins halving takes place to reduce mining rewards to 25 BTC. July 9, 2016: Second halving takes mining reward down to 12.5 BTC. Bitcoin halving dates history.
Should I buy bitcoin before the halving?
It doesn’t affect much but anything is possible so investing in Bitcoin before halving is a good idea. You can use the following Bitcoin exchanges to invest in Bitcoin.
Conclusion: Bitcoin halving is the very core part of this protocol. Halving ensures its deflationary quality and it also helps to understand fiat currency which is absolutely centrally controlled. Nakamoto ensured us that even if all the bitcoins are missed, the tokenomics can still sustain it digitally.
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