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Bitcoin halving: When is the next cycle? What do you want to know?

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  Bitcoin

Bitcoin halving is one of the most important events in the BTC blockchain. This causes inflation in the value of bitcoin by reducing the amount of bitcoin in circulation and also increasing the demand for bitcoin. The consequences of halving bitcoin affect everyone involved with the bitcoin ecosystem.

After extracting every 210,000 blocks, the Bitcoin block reward is halved every four years. This is called halving because it slows down the production of new bitcoins. This method of bitcoin is to impose artificial price inflation until all the bitcoins are in circulation.

The reward of the block will continue for another century (until about 2140) when the desired ceiling of 21 million people is reached. Miners will then be rewarded with the costs that users will pay for processing transactions. These costs ensure that miners have an incentive to extract and continue networking.

Bitcoin is expected to halve in another 2 years

Bitcoin halves occur every four years, and is significant because it indicates that the rate of new bitcoins produced is approaching its limit: the total maximum supply of bitcoins is 21 million. There are currently about 18.85 million bitcoins in circulation, leaving only about 2.15 million bitcoins to be mined over the next four years.

In the past, the halving of bitcoin has been accompanied by high price fluctuations. The first hawing, which took place on November 28, 2012, led to an increase from $ 12 to $ 1,217 on November 28, 2013. On July 9, 2016, Bitcoin Network launched its second halving event. The price was $ 647 at the time, and by December 17, 2017, the value of bitcoin had risen to $ 19,800. Subsequently, the price fell during the year from the highest level of $ 3276 on December 17, 2018, when it was 506% more expensive than the pre-halved rate.

The last bitcoin halving took place on May 11, 2020. At the time, one bitcoin was worth $ 8787. On April 14, 2021, the price of Bitcoin rose to $ 64,507 (an increase of 634% over pre-halved value). One month later, on May 11, 2021, a bitcoin was valued at $ 54,276, representing a 517% increase, which is more consistent with halving 2016.

The event of halving bitcoin in the future has caused a great deal of controversy among the financial community. Those who talk about it are happy to note that the world of digital currencies is just over two years in the making, and many outsiders are wondering what it’s and why it’s so important.

The next bitcoin halving event is expected to occur on May 4, 2024, or approximately, when bitcoin has 840,000 blocks. Most investors think that the value of bitcoin will increase over time and may grow faster from now until the fourth half of 2024. This is based on its history throughout and the results of the events of the first and second half. There have already been significant jumps in bitcoin prices in both times before.

The effects of bitcoin halving on the crypto ecosystem

The next bitcoin halving is expected to take place in the first quarter of 2024, and the minor bonus will be reduced to 3.125 BTC. Bitcoin investors or traders should keep in mind that halving is usually accompanied by significant fluctuations and changes for Bitcoin.

After extracting the 19th millionth bitcoin block, ‘730002’ on April 1, it was revealed that only 2 million bitcoins still remained above the 21 million bitcoin ceiling. A decrease in supply generally leads to an increase in demand, which means an increase in prices.

The events of the last bitcoin halving have been accompanied by a gradual and significant increase in price over time, which has reached its peak in a year and a half. If the same thing happens in the next case, bitcoin investors will be happy. If halving bitcoin does not increase demand and prices, miners will have no incentive. Rewards for completing transactions will be lower and the value of bitcoins will not be high enough.

To prevent this, Bitcoin has a mechanism for regulating the difficulty of earning extraction, also called extraction difficulty. If the reward is halved and the price of bitcoin stays the same, miners will be motivated to reduce the difficulty of mining. This indicates that while the amount of rewarded bitcoins has decreased, the difficulty of processing the transaction has decreased.

This strategy has been implemented twice so far. So far, the consequences of this bitcoin halving have been price increases, followed by sharp declines. However, the subsequent downturn has still pushed prices back to their previous levels.

Take the 2017 to 2018 bubble, for example, when the value of bitcoin rose to about $ 20,000 and then fell to about $ 3,200. This is a significant downturn, but before Bitcoin was halved, Bitcoin was trading at around $ 650.4.

Despite the fact that this method has been effective so far, the halving is almost always followed by speculation, fuss, and fluctuations, and how investors will react to these events in the future is unpredictable.

The third half occurred not only during an epidemic around the world, but also amid growing regulatory speculation, more institutional interest in digital assets and celebrity noise. Given these additional variables, it is difficult to predict where the Bitcoin price will end up.

By around 2140, the last bitcoin will be extracted from the 21 million bitcoins that will be produced so far. At this time, as there will be no new bitcoins to discover, the halving program ends.

Miners, on the other hand, are rewarded for continuing to validate and approve new transactions, as transaction fees paid to miners are expected to increase in the future due to the larger volume of transactions, which includes higher fees and the nominal value of the Bitcoin market.