From a technical perspective the Bitcoin halving is an event built into the Bitcoin protocol that ensures that the number of BTC that become available due to mining each block are reduced to half post the halving event.
The halving events happen every four years and are slated to occur up to the year 2140 when the total supply of Bitcoins is slated to reach 21 million.
The 2024 halving would be the fourth halving event in the history of bitcoins from the point it was launched.
Back in 2009 when few people knew about bitcoin and it was easy to mine bitcoin with a graphical card of your computer or laptop.
Back then the reward for mining were 50 Bitcoins per block.
The first halving event was witnessed in 2012 and saw the Bitcoin mining rewards reduced from 50 to 25
The 2nd Bitcoin halving event occurred in 2016 and saw the Bitcoin mining reward come down to 12.5 BTC from 25 Bitcoins.
The third Bitcoin event happened in 2020 and brought down the BTC mining rewards from 12.5 to 6.25 BTC
The 4th halving is slated to happen in April 2024 and would bring down the rewards further to 3.125 BTC
Price movements and Halving
As the halving events were designed to make bitcoins more difficult to get thus they have resulted in some interesting price trends.
Looking at the historical data of price movements before and post the having event we see that there have been big rallies after the halving events.
What does it mean for a Bitcoin miner?
Bitcoin mining can be an interesting place to be in if you have the right mining equipment and location to mine bitcoins for cheap.
Mining bitcoin involves investing into high end hardware that is expensive to buy and run as they are electricity guzzlers.
As the difficulty
to mine BTC goes up so does the need to constantly upgrade the hardware. This strategy is needed even more so as every four years there is a bitcoin halving event.
What this does to anyone mining Bitcoins is that the reward per block goes down by half post every halving event. So the miners would need to work for half the rewards for mining each BTC block.
As BTC rewards become more scarce and the tech to mine bitcoins gets more rewards the miners need to invest into equipment that obviously needs more money.
Bitcoin as an asset is highly cyclic and experiences bull and bear cycles. Miners hold onto their Bitcoin inventories during the bear phase of the market and sell in the post halving bull market.
They can use the proceeds to upgrade their hardware.
Interestingly this time round the miners are lowering the BTC they hold and offloading their inventories prior to the BTC halving event.
This could be on account of the rally that BTC has been witnessing post the bitcoin ETF launch.
The profits made by the miners are being ploughed back into buying more and better mining rigs as can be seen due to the rising hash rate.
Mining is not the only way you can earn crypto
Inleo is a web3 frontend that lets users create and publish their content onto the blockchain. Based on the upvotes the content receives from the other users, published content on inleo earns you leo and hive tokens which is crypto.
A user can stake this crypto and grow on the blockchain or swap it with other crypto like BTC, ETH etc.
Here is the link to create an account on inleo and start your web 3 life.
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Over all this is the reason I decided to join and get some Hive instead of going after speculative tokens, Im not your buy and sell guy so decided to monetize and earn while doing something I like, writing about the content that I watch, Inleo is the perfect complement to what traditional long form content on Hive, I can only see things getting better from here and eventually Hive will keep expanding through all the on going projects✌️