Crypto fanatics have been really anticipating the day for “Bitcoin Halving” this year (2020). You probably have seen advertisements on TV, magazines, or even on the different social media networks about this.
But if you are new to the world of crypto, you are probably wondering what this most awaited day is. What is it? What’s going to happen? Is it something that will benefit you as a newbie? Why are they saying that this will certainly shake the crypto markets? Read on as we delve deeper into what this term really means.
What Is Bitcoin Halving?
Bitcoin Halving is expected to take place sometime in May, 2020. It usually happens once in every four years. As the term “halving” suggests, something will be “half-ed”. And guess what? It is the production of the digital currency itself! Yes, this 50 percent slash in the availability of Bitcoins will surely put pressure on those people who are actively buying and selling this type of digital cash. The same is true with the miners.
To give you a brief history of this process, it started in 2009. And initially, the block reward was 50. The next Bitcoin halving happening in May is 6.25 coins. The main goal for this huge reduction has something to do with controlling the supply and circulation of digital cash.
What Exactly Is Going to Happen?
When that day comes, there will be a limited supply of Bitcoins. Those that will be created by miners, who are investing in expensive computer desktops and hardware, will enter the system as block rewards. As long as the demand will remain high, the scarcity of rewards will certainly increase the price of Bitcoin big time.
This is why miners and investors alike are getting anxious too. Those who are mining are really preparing for the event, and each of them is aiming to get as many rewards as they can get by answering incredibly challenging equations.
Investors, on the other hand, are preparing their stocks and funds, as they hope for a more lucrative buying and selling of Bitcoins. The events that will follow the Bitcoin Halving are really unpredictable. It could lead to deflation or inflation. It all depends on demand and supply. This is one of the biggest reasons why crypto enthusiasts are excited and nervous at the same time while waiting for the big day.
Who Controls the Process?
Actually, no one does. Rules and codes were created a decade ago by Satoshi Nakamoto. In fact, nobody even knows if this name belongs to an individual or a group of very smart people since it is just a pseudonym.
What Is the Purpose of Bitcoin Halving?
Since Bitcoin is not regulated or controlled by a central bank or a single administrator, the halving was created to maintain the circulation. It is the main algorithm of emission control. This process controls the supply of Bitcoins, which should never exceed 21 million. With that said, this event that occurs every 210,000 blocks is very important.