Bitcoin Halving: Price Effects & Brief History

Recent Bitcoin halving has already left the stage –
what does that mean? Miner’s rewards were successfully halved on Monday
evening. Bitcoin investors are a little confused.

The rate of the very first Bitcoin cryptocurrency was changed
on Monday evening due to a so-called halving. What’s next? Here are the most important
questions and answers!

Bitcoin Halving:
What Does It Mean & How Does It Work?

The Bitcoin inventors have provided the digital
currency with two types of inflation protection.

 

• • On
    the one hand, the number of bitcoins that can be issued is limited to 21
    million coins.

• • On
    the other hand, the halving continuously lowers the Bitcoin miner’s fee, which
    reduces the financial incentives to mine new bitcoins.

The Bitcoin network processes the transactions by
collecting all the transactions of a certain period of time and putting them
together in a list – a so-called block.

The main goal of a miner is to confirm these
transactions and enter them in a publicly available account book (blockchain).
In return for checking whether the transaction ordered ‘doesn’t conflict’ with
the previous transaction history, a miner who confirms a transaction receives
new bitcoins.

When Exactly Does
the Halving Take Place?

After the creation of 210,000 new blocks on the
Bitcoin blockchain, the reward for miners who validate a block is halved. A new
block is created every ten minutes. A block #630 001 was created on Monday
evening.

The miner’s fee for this block will be reduced from
12.5 to 6.25 bitcoins. The next halving of the miner’s reward will take place
at block #840 000 in 2024.

A Brief History of Previous
Halvings: What Happened Before?

Bitcoin faced two halvings of the miner’s rewards – in
2012 and 2016. During the first halving in 2012, the Bitcoin rate rose 8000% in
the coming twelve months.

In 2016, after the halving, it increased by 290% during
the same period. In contrast to today’s reality, at that time, Bitcoin was an ‘insider
issue’, and therefore it was much easier to influence it.

How Does Halving Affect
the Bitcoin Rate?

Shortly before the halving, the Bitcoin’s price had
dropped to around $8,600. On the night of Friday, the price briefly exceeded the
$10,000 mark after rising since mid-March.

This doubling of prices since March led to the recent
Bitcoin halving. Bitcoin price today is $9,636.46. What happens next? Just share your opinion in comments!