Categories
Bitcoin Cryptocurrency The Crypto Basic

Bitcoin Halving 2020

To understand what is bitcoin halving 2020, we must first know what is Bitcoin Halving? Below is Bitcoin halving explained

What is the meaning of Bitcoin Halving?

Bitcoin halving is explained as an event in which the rate at which new bitcoins are created halves. It occurs every four years.

As many know, Bitcoin cryptocurrency (BTC) supply is limited. As soon as 21 million coins are generated, the network will no longer produce any more.

Read Also: What is Bitcoin and How Does it Work

This is one of the main reasons why Bitcoin cryptocurrency is often referred to as “digital gold”

Just like yellow metal, there is only a limited amount worldwide, and one day everything will have been extracted completely and there will be no Bitcoin cryptocurrency left to mine

Read also 3 commas crypto trading bot review

There are currently around 18 million BTC in circulation, which is approximately 85% of the total circulation supply. However, this does not mean that the Bitcoin crypto will soon reach its limits.

The reason for this is the protocol encoded in the bitcoin blockchain right from the start

After Every 210,000 blocks are mined caleed Bitcoin halving, the production of new coins becomes more difficult

Just like gold mining where finding new deposits over time becomes more difficult.

In particular, the protocol cuts the block reward in half every time bitcoin halving occurs, miners receive 50% less BTC for ever verified transaction.

If not interested in reading, you may watch a video

Bitcoin halving explained, Source Youtube: 99Bitcoins

How long does it take for Bitcoin crypto to halve?

Since an average of 6 blocks are found within an hour and the halving occurs once every 210,000 blocks are mined, so by this calculation halving takes place every 4 years.

This basically means that mining wages become 50% lower than before.

For example, if every miner receives 12.5 bitcoins to solve a block, they will only receive 6.25 bitcoin cryptocurrency after the next halving event and so on.

Read Also: How to Buy Bitcoin Cryptocurrency

Of course, the fact that 21 million bitcoins have been generated does not mean that 21 million bitcoins can actually be spent.

You have to take into account that there are many lost bitcoins that will never be recovered and also the generated bitcoin cryptocurrency has to be mined over time to utilize

bitcoin halving 2020

What is Bitcoin Halving 2020? Or When the next Bitcoin halving will be taking place?

So now as the concept of bitcoin halving is clear let’s have a look at Bitcoin Halving 2020.

The next Bitcoin halving is expected to take place in the week of May 18, 2020 when the number of blocks reaches 630,000.

The block reward will drops from 12.5 to 6.25 bitcoins.

The exact date of the halving is not yet known because the time to generate new blocks varies.

The network calculates an average of one block every ten minutes. The average date can be 18th may 2020

Bitcoin Halving dates history

Main Event Dates Block # Block Reward
Bitcoin launches Jan 3 2009 0 (genesis block) 50 new Bitcoin
Bitcoin halving 2012 Nov 28 2012 210,000 25 new Bitcoin
Bitcoin halving 2016 July 9 2016 420,000 12.5 new Bitcoin
Bitcoin halving 2020 May 18 2020 Expected 630,000 6.25 new Bitcoin
Bitcoin halving 2024 2024 Expected 740,000 3.125 new Bitcoin
Bitcoin halving 2025 2028 Expected 850,000 1.5625 new Bitcoin

How much Bitcoin miners will get after the next halving?

Each new block generates 6.25 BTC. In the beginning, the reward was eight times as high.

When Bitcoin hit the market in 2009, the miners received 50 BTC per block.

A total of 10,500,000 BTC was generated before the next halving took place in November 2012, when miners received 25 BTC for each block.

It may seem like an overly generous bonus over $ 365,000 per block based on current value

but the network has only just started to develop and, no one knew for sure whether people would still think the concept worthy to invest their computing power in the Bitcoin blockchain to keep it alive.

Another fact to consider is that the all-time high for that period was $ 31 per BTC  in June 2011, but the bubble”burst later and bitcoin was back at $ 2 before year-end.

Nevertheless, mining ultimately turned out to be much more profitable for those who started early.

This is a major reason why Bitcoin critics call it the Ponzi program.

Read Also: Binance Exchange Review

The second bitcoin halving took place on July 6, 2016, when block number 420,000 was produced and miners started collecting 12.5 BTC for each new block, which is the current rate.

The third halving will halve this rate again, reducing the block reward to just 6.25 BTC, or about $ 45,000, given the current market price.

bitcoin halving price chart

Bitcoin halving price chart

Frequently Asked Questions

Will the Bitcoin price change after Bitcoin halving 2020?

Bitcoin cryptocurrency is currently showing a 3.88% inflation rate and miners are dumping 1800 of Bitcoin Cryptocurrency on daily basis

After the halving we will drop to under 2% inflation and will only be able to buy 900 new BTC per day

which may lead to increase in price if the demand of Bitcoin cryptocurrency remained the same as the supply will decrease to half after Bitcoin halving 2020.

In the past, the price rose after halving, but ultimately depends on the relationship between supply and demand.

In essence, halving Bitcoin cryptocurrency will reduce the BTC supply, making assets scarcer.

If there is demand, the price is likely to rise.

There are also some historical precedents. On November 28, 2012, the day of Bitcoin’s first halving, the price of the Bitcoin cryptocurrency rose from $ 11 to $ 12 and continued to rise over the next year, reaching $ 1038 on November 28, 2013.

About four years later, a month before the second halving, the Bitcoin price followed a similar, bullish pattern.

It rose from $ 576 on June 9 to $ 650 on July 9, 2016

the day the block’s reward was cut in half for the second time in the asset’s history.

BTC continued to accelerate next year and was trading at $ 2526 on July 9, 2017.

Will it be the same this time?  The industry has changed dramatically in the past four years as cryptocurrencies  and especially Bitcoin cryptocurrency have become an essential part of mainstream news.

Still, some people may be tempted to take the chance, especially given the previous patterns that have been issued in relation to Bitcoin halving.

If history repeats itself and bitcoin prices rise in April 2020, more traders may buy the asset for fear of missing it, stimulating demand and ultimately price.

How can I trade bitcoin halving 2020?

The easiest way is to buy Bitcoin Cryptocurrency is directly through an exchange like Binance exchange or any other reputable crypto exchange.

If you choose this option, you will need to set up an Exchange account

Any profits would also be taxable in the usual way.

You can buy BTC before a month or two before halving and if the price start to increase you can take profits but if vice versa you must place stop loss to cut your losses

bitcoin halving

 

Can I make money by halving BTC?

Yes, it will be possible to make money with the BTC halving by speculating on Bitcoin’s price movements in the weeks and months associated with the event.

However, it is important to remember that all forms of trading involve risks.

So while there are chances of winning, you should never risk more than you can afford to lose.

How often is Bitcoin halving occurring?

Halving takes place at intervals of 210,000 blocks, which is the case approximately every four years.

Bitcoin miners currently receive 12.5 Bitcoin cryptocurrency if they successfully mine a block.

By the end of May 2020, they will instead earn only 6.25 BTC

Will the mining of Bitcoin crypto Ever End?

Mining will be needed as long as Bitcoin cryptocurrency exist.

If all Bitcoin cryptocurrency are mined then miners will be rewarded through transaction fees

How many Bitcoins are left to mine?

According to data from Blockchain.info there are 21 million bitcoin in total supply and only 4 million are left to mine

out of 21 million 17 million bitcoin cryptocurrency have been mined

What is a Block reward for Bitcoin miners?

The amount of BTC a miner receives for each new block he adds to the blockchain.

To explain this concept in more detail, we briefly return to the roots of Bitcoin cryptocurrency – the blockchain.

In the simplest sense, a blockchain is a digital general ledger, in which information about its transactions is stored in blocks of approximately 1 MB each.

For example, if Person A sends Bitcoin to Person B, that transaction is stored in a block along with about 500 other transactions that took place at about the same time.

A block reward is the amount of cryptocurrency, miners receive when they successfully mine a new block by solving highly complex math problems with their mining hardware.

It is a reward for their hard work.

Will Bitcoin miners continue to be interested in mining, even if their reward is halved after Bitcoin halving 2020?

Some smaller players may be forced to leave the game or at least upgrade their hardware.

At this point, most of Bitcoin’s mining is done by giants like Bitmai

The China-based company that was worth $ 12 billion in 2019, application-specific integrated circuits that are expensive and require a lot of energy and technical skills.

If the block reward becomes less important, mining facilities that hardly cover production costs have to leave the market.

There will still be companies willing to mine Bitcoin cryptocurrency at the reduced rate, but this could make the market less decentralized.

Nonetheless, new and more efficient ways of extracting BTC could emerge that may allow smaller companies to participate.

Can Bitcoin Survive Without Miners?

Without miners the Bitcoin crypptocurrency blockchain will not remain functional

How many Bitcoin crypto are lost?

Chainalysis, a research company that analyzes activity in various cryptocurrency markets, estimates that  17 to 23 percent of all bitcoin cryptocurrency have been lost and will never be recovered

What happens when the last bitcoin cryptocurrency is mined?

When all of BTC will be mined these transaction fees should become so valuable that they will encourage miners to continue mining even if they don’t receive a mining block reward.

Bitcoin cryptocurrency miners will still paid by transactions fees

Who operates the Bitcoin network?

Nobody owns the Bitcoin cryptocurrency network. Bitcoin is controlled by all Bitcoin users around the world.

As developers improve the software, they cannot force the Bitcoin protocol to change because all users are free to choose which software and version to use.

 

 

     

    Leave a Reply

    Your email address will not be published. Required fields are marked *