The Bitcoin halving refers to the Bitcoin reward halving when a miner successfully mines a new block. The halving timeline occurs approximately every 4 years, after 210,000 blocks have been mined by the system. The Bitcoin block halving and the reward halving will decrease following the May Bitcoin halving. After this a mere 900 bitcoin will be mined on a daily basis.
Given the Bitcoin block halving, how will the miners be impacted?
When a halving occurs, the Bitcoin block rewards received by miners for validating transactions are reduced by 50%. After the 2016 halving event, the blockchain went from mining 3600 bitcoin down to 1800 bitcoin daily. The halving of the mining reward means that if the reward currently stands at 12.5 bitcoin per block, after the halving it will be reduced to 6.25 bitcoin.
Bitcoin Pricing: Economic Theory in Practice
The halving of the supply of Bitcoin means that the coin de facto becomes more rare. The laws of supply and demand state that constant demand for an asset will result in a rise in its value and price. Much as seen with the previous two halvings, the third halving could potentially mean a hike in the price of Bitcoin.
Will bitcoin’s halving cause the price to skyrocket soon?
Many analysts are predicting that the number of active users of Bitcoin will soar, both in the run up to the halving in May, and following the event.
The halving timeline has a halving event occurring approximately every 4 years. After the May 2020 Bitcoin halving event, the next predicted Bitcoin halving is due to take place in May 2024.
A year after the first halving in 2012, Bitcoin price hit $1,000 (in November 2013), and a year after the second halving in 2016, its price peaked at $20,089. Analysts say the coin could even reach a $1 trillion market cap following the event.