It should be noted that bitcoin mining has been growing in popularity with it receiving its fair share of the spotlight over the years. Modern technology has also contributed greatly in helping make mining more accessible to people who wish try them out as an extra source of income. Those who are new to mining may be surprised to hear about the phenomenon known as bitcoin halving which just as their name implies, decreases the reward by 50%. While this may sound quite harsh there are a number of reasons why it needs to occur.
The Importance of Halving
Bitcoin halving is considered to be an important aspect in the mining industry. The reason behind this is because it helps regulate and control bitcoin prices in order to keep them relevant for a long period of time. We mentioned earlier, that more and more individuals are joining bitcoin mining. Although the increase of miners is very much welcomed, this also results to the increase in the number of bitcoins that are produced. Without any regulation, the bitcoin rate can inflate at a very rapid degree making them lose their value which is something miner don’t want to happen.
How Often Does It Occur?
It is important to note that the initial value of bitcoin during its inception on 2009 was 50 BTC per block. The first bitcoin halving happened on November 28, 2012 which reduced the mining reward to 25 BTC. The second halving took place on July 9, 2016 which took the mining reward down to 12.5 BTC. The third halving is expected to happen again around May 2020 and the reward will fall to 6.25 BTC once it is implemented.
Can Future Halving Make Bitcoin Irrelevant?
One of the biggest concerns people have with halving is the threat of making the value of bitcoin to be irrelevant a they lose value in each passing year. This however, is not entirely true especially since the estimated final block containing bitcoin will happen sometime in the year 2140. That is 130 years before this event will happen and the market is known to be quite volatile. You will not be able to completely tell the future of bitcoin and its rate as the economic conditions particularly, in the field of cryptocurrency could change in the coming years.
Another thing to note is that miners don’t rely primarily on the value of bitcoin for their income as there is money to be found with each transaction fees. Transaction fees are paid each day for hundreds or even thousands of bitcoins making it relevant and still very much profitable.
There is indeed a lot of things that you can look forward to on the third bitcoin halving event that is expected to happen anytime soon. It is important for miners to stay up to date with the latest news and updates about bitcoin to avoid the hassle. Fortunately, these types of news are posted regularly over the internet for people to see.