The Bitcoin halving cycle which occurs every four years is today’s exciting article which we highly recommend anybody to read. In this Asiasignal’s article we will cover all the needed information about Bitcoin halving, Bitcoin halving date and so much more.
What is Bitcoin halving?
In order to mine only 21 million Bitcoin blocks, the block reward given to Bitcoin miners for processing transactions, which is the Bitcoin block, is halved approximately once every 4 years. This halving of Bitcoin rewards is called Bitcoin Halving. The first halving occurred in 2012, the second in 2016 and the third in 2020. With the halving event, the amount of Bitcoin circulation in its network is reduced by half. The halving event prevents inflation in the price of Bitcoin and thus the value of Bitcoin is always maintained. Halving continues until the number of bitcoins reaches 21 million blocks.
According to predictions, this event will occur for the last time around 2140. At that time, the only profit miners will receive is the transaction processing fee that network users will pay. These fees keep miners motivated to mine and develop the Bitcoin network. On the other hand, the competition to receive fees from miners makes the fees remain low.
From 2140 onwards, no new bitcoins will be mined. Rather, the transaction is done only on the bitcoins that have already been mined. In 2140, the halving program will stop, as no new bitcoins will be created on the network. Miners, however, will still be motivated to continue validating and verifying new transactions on the blockchain, as the profits miners receive from transaction fees will increase in the future. The reason for that is the larger volume of transactions, which has a fee. On the other hand, at that time, the nominal value of Bitcoin will also increase. Now you can partially answer the question of what bitcoin is halving.
Who Organized the Bitcoin Halving Event and Why?
Satoshi Nakamoto is the nickname of the creator of Bitcoin. No one knows if this name belongs to a person or a group! Satoshi disappeared almost a year after the release of the Bitcoin network to the world. Therefore, he is no longer available to explain why he set up the Bitcoin Halving event.
But the early emails written by Satoshi shed light on the mind of this mysterious figure. In fact, shortly after the publication of the Bitcoin white paper, Satoshi provided a summary of a program whereby miners could be rewarded for each block mined. This program can be justified by considering the conditions that may lead to inflation. Inflation may be due to an increase in the purchasing power of Bitcoin or an increase in the price of goods and services that are traded with Bitcoin.
At the time, Satoshi had no idea how many people would use Bitcoin in the future. He has explained very little about the reason for choosing Bitcoin Halving. He just believed that the value of coins should remain almost constant after distribution.
In most currencies issued by the government, a central bank has a tool at its disposal that allows it to add or remove its traditional currency, such as the dollar, from the financial cycle. For example, if the economy is fluctuating, the Fed can buy securities from banks to increase circulation and encourage people to borrow. Alternatively, if the Fed wants to remove dollars from the economy, it can sell its securities. But there is no such possibility for digital currencies like Bitcoin.
Bitcoin halving cycle
In general, in each hour, the number of blocks obtained reaches 6 numbers. Each halving is also formed after 210 thousand blocks. The Bitcoin halving cycle generally occurs every four years.
Bitcoin halving date and schedule
One of the prominent market analysts has recently shared the most likely and realistic prediction of the price trend for Bitcoin in 2022 with the users and followers of his Twitter page. Crypto market analyst Kevin Svenson thinks Bitcoin's 20-month moving average is very important, and that the indicator has identified reversal trends for Bitcoin in the past.
He further added:
"When the price of an asset is in an upward trend and then reaches its long-term moving averages, it usually indicates that the trend is in its last days, and if the candles intersect with the average and the price crosses them, it is possible to see We will change the trend."
According to Assonson, the 20-month moving average of Bitcoin is a very reliable indicator that has proven itself during the 2014-2018 market cycle. He added in this regard:
"Such an incident happened in 2014. If we review the 2018 cycle, we see a strong upward trend. After that, the trend moves in the neutral direction and then collides with the long-term moving averages. When the candle closes below this average, the downward trend begins.
According to this crypto market trader, Bitcoin recently closed below the 20-month moving average of its candle, which is not a good sign for the world's largest cryptocurrency.
When we reach the long-term moving averages, we will most likely see a bearish trend for two to four months. According to Esunson, this Bitcoin price trend may last between two to six months, and before the next halving, we will witness a downward behavior of this currency and register lower floors. It should be mentioned that the next bitcoin halving date is scheduled for the first half of 2024.
Bitcoin halving date
How does halving affect the Bitcoin network?
The halving cycle affects different groups on the Bitcoin network: Here we briefly explain how Bitcoin halving affects stakeholders and other groups on the Bitcoin network.
Bitcoin Halving generally increases the price of cryptocurrencies due to reduced supply and increased demand, and this is good news for investors. As the probability of halving increases, trading activities in the cryptocurrency blockchain increase. Although, as we said, the speed of price increase is different based on the preparation and conditions of each hawing.
The impact of mining on the Bitcoin ecosystem is complex. On the one hand, the decrease in Bitcoin supply increases demand and prices. But lower rewards can make it difficult for individual miners or mining groups to continue in the Bitcoin ecosystem, as it may be difficult for them to compete with large mining organizations. According to research, Bitcoin's mining capacity is inversely related to its price. Therefore, when the price of cryptocurrency increases, the number of miners in its ecosystem decreases. A Bitcoin halving cycle is identified by an increase in price and can increase the probability of a 51% attack on the Bitcoin network as miners withdraw from the network, thereby reducing its security.
The term halving means how many bitcoin tokens are in a newly created block. When the Bitcoin network was launched in 2009, each block produced 50 Bitcoins, but this amount is reduced by 50% every four years. To date, 3 halvings have occurred and one block contains only 6.25 bitcoins.
What happens if miners suddenly decide to leave the network?
In case of such an action by miners, the network will stop working; Because there is no miner to extract a block and the transaction process is done in exchange for it. A powerful mining cartel will use its incredibly high hash rate to take over the entire Bitcoin network using a 51% attack. A little later, the entire network falls into the hands of those companies.
Bitcoin halving chart reviews
Of course, you can't go back to the past and use the opportunity to invest in Bitcoin and get a few hundred percent profit, but by having a targeted view of the past trend of this currency, you can also have a more appropriate view of its future.
There are different opinions about the next Bitcoin halving; Some believe that the price of Bitcoin will increase after this halving, others believe that its value will decrease, and some predict that the status quo will be maintained.
The experts who predicted the price increase believe that the halving of the mining reward may cause a temporary decrease in the price of Bitcoin, but the upward trend of this currency will continue and they envision a bright future for it.
On the other hand, those who have predicted a decrease in price believe that there are other factors other than halving, which causes its price to decrease gradually.
what is Bitcoin halving
In this article with halving phenomenon, we got to know and know that bitcoin mining is getting more difficult and this phenomenon will increase its value. In fact, the stability of the number of bitcoins makes it maintain its value over time. So, after gaining knowledge about Bitcoin halving, we want to introduce you to the biggest VIP channel that will notify you about all signals. Asiasignal’s VIP channel can guarantee you for receiving the best and newest signals every day. Buy and remember to talk about Asiasignal’s premium account of trading view to others.