Your Guide to Demystify Bitcoin Halving 2020

The exciting world of cryptocurrency is never out of the news. There’s always something happening in this volatile market. For the last decade, bitcoin has dominated the cryptocurrency since its launch in 2009.  Whenever something is happening in this industry, bitcoin always features somewhere.

While price fluctuations have dominated the industry over the last few months, another critical topic has been simmering. Over the last year, one issue that has generated lots of interest in the industry is the debate on bitcoin reward halving. 

There’s a lot of mystery around the whole issue of bitcoin halving. Whether you are a crypto trader or you have a passing interest in this industry, you need to get the right information about any developments. This post delves into bitcoin reward halving to give you the insight you need.

Background of Bitcoin Cryptocurrency

Bitcoin started is a brainchild of Satoshi Nakamoto, a pseudonym for the person who built the original bitcoin protocol in 2008. In his Bitcoin’s whitepaper, the developer describes the peer-to-peer electronic cash system. 

In the whitepaper, Satoshi Nakamoto also describes the protocol and other issues regarding this digital currency. Among the processes is “halving” a process that cuts the bitcoin block reward in half. BTC halving happens every 210,000 blocks, which is approximately every four years. 

The previous halvings happened in 2012 and 2016.The next halving is expected to occur around May 11, 2020. After every halving phase, bitcoin miners start receiving 50% fewer BTC for verifying transactions.

Bitcoin Mining and Halving

To fully understand the impact of this halving, you need to look at the importance of bitcoin mining. Unlike ordinary currencies that have a central regulatory system, bitcoin relies on third parties on the bitcoin network. 

These third parties are the bitcoin miners who solve cryptographically hard puzzlesusing specialized equipment. If successful, new blocks are added to the BTC blockchain and the miners get rewards in the form of BTC payments. The mining of bitcoin happens with the knowledge that it has finite supply with the cap at 21,000,000 coins. To reach this bitcoins cap, there will be 64 halving phases in total. 

In the first BTC halving in 2012, block rewards decreased from 50 to 25.The second halving in 2016 cur the reward for miners from 25 to 12.5. The 2020 halving will bring down BTC rewards from 12.5 to 6.25.

What Will Happen after the BTC Halving?

Bitcoin prices fluctuate rapidly whenever there’s any market change. However, it’s possible to learn from the history of halving in 2012 and 2016. In both cases, there was a notable surge in bitcoin prices best explained by a disturbance in the Stock-to-Flow ratio. 

In 2016, there was a BTC price experienced f rom $450 in April 2016 to around $650 when the halving happened. BTC halving creates some scarcity in coins which is a catalyst for rising prices. As a cryptocurrency trader, it’s essential to learn from history, but you should also stay on the lookout for any unexpected market BTC movements.

Wrapping Up

BTC halving is predicted to occur on May 11, 2020, and it’s one of the most eagerly awaited developments in the industry. As a bitcoin investor, you need to get up-to-date with this crucial development and make the right move. This guide demystifies the whole idea of halving and will help you research further.

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