Bitcoin mining and halving are closely related. You cannot understand bitcoin halving before you first understand bitcoin mining. Bitcoins have to be mined for the circulation in bitcoin blockchain to remain active. The pioneers behind the creation of Bitcoins known as Satoshi Nakamoto introduced this cryptocurrency alongside two main rules. The first rule states that the total amount of bitcoin in the block cannot exceed 21 million. The second rule states a 50% reward decrease will be enforced for every 210,000 blocks.
The Long It Takes for Bitcoins to Be Halved
According to the available factual information, only six blocks are mined every hour. Halving often happens after a total of 210,000 blocks have been mined. So, it technically takes four years for bitcoins to be halved. In short, it will take four good years for the mining reward of bitcoins to lower by half the value it was during the last halving event. However, just because miners have mined 21 million within the four years of halving doesn’t mean the actual number ofexisting bitcoins in the blockchain is 21 million. Some bitcoins are lost in the mining process, which should be recovered.
Why Are Bitcoins Halved?
You may be wondering why a bitcoin halving event should be done after every four years. The main reason bitcoins are halved is because if mining is done as per the set rules, there will be overflow of bitcoin, which will increase the circulation level, hence reducing the actual value of bitcoin. In short, bitcoins are halved to avoid issues with inflation.
Just like it’s the case with the traditional currency, if banks print currency without control, the total amount of money in circulation will be too high, attracting the wrath of the supply and demand law, which states that if the supply is high, the demand will reduce.
Also, bitcoin is designed to act out as precious commodities such as gold. Currently, the total amount of gold in circulation around the world is limited, and as more gold grams are mined, the remaining gold becomes extra challenging to extract. Due to the limited number of gold in supply, it has retained its value for years, and that’s precisely what halving of bitcoins intends to achieve.
When Should Miners Expect Bitcoin to Be Halved?
We already know the average block generation is ten minutes, and so predict when next bitcoins will be halved. As per the bitcoin miners and experts, bitcoins will be halved in June 2020.
That’s technically everything you need to understand about the halving of bitcoins which takes place every four years. If you’re considering investing in bitcoins, you may need to wait until the bitcoin halving event is over and see how low the value of bitcoin will go. Investing now and selling somewhere in April or May could also be a good idea. However, to stay clear of the possible risks of losing your money to vanity, it’s strongly advised you wait until the halving event is over. You can speak with experts to know more about bitcoin halving, as well.
