The Bitcoin Halving – What Will Change?

The upcoming Bitcoin halving has been getting a lot of attention lately. Not only will there be less new bitcoins added to the existing supply on a daily basis, but a lot of people expect there will be a price change as well. That being said, with so many people not even knowing what Bitcoin or the halving is, now would be an opportune time to go over what will change exactly.

What Is Changing During The Bitcoin Halving?

TheMerkle_Bitcoin Halving Changes

The most noticeable change comes in the form of a reduced Bitcoin block reward. When Bitcoin was initially launched seven years ago, there was a block reward of 50 BTC. However, Satoshi Nakamoto, the creator of Bitcoin, put in periodic checkpoints during which this block reward would be cut in half.

The first halving occurred a few years ago when the Bitcoin block reward was reduced from 50 coins to 25 BTC. However, this time, the block reward will be cut in half once again, resulting in 12.5 BTC being generated by the mining process every ten minutes. As this happens, the available Bitcoin supply will keep growing every day, but at a slower rate than before.

Bitcoin miners will be the ones feeling the biggest impact from this change. Miners, who confirm network transactions to be included in every block, are rewarded in the form of a share of every block reward. This reward is based on the proportionate amount of computational power they contributed to finding that specific block.

A lot of things have changed in the Bitcoin mining game since the previous halving, though. Mining hardware has become a lot more power efficient, but it still rather costly to mine at home for most people. Moreover, achieving a return on investment after buying a Bitcoin miner is always a challenge. A reduced block reward could put some miners an unprofitable situation, albeit that hinges on what the Bitcoin price will do.

Speaking of the Bitcoin price, it is difficult to say what the impact of the upcoming Bitcoin halving will be. Some people think prices will go up, whereas others feel a price increase will have little to do with the Bitcoin halving itself. The next few weeks will be quite exciting to watch, as the Bitcoin halving is almost upon us.

Source: Wiki

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  • J_O_N_A_T_H_A_N

    I guess what confuses me is BTC was $300 not that long ago so this repeated blog phrase “the price will rise” seems to ignore that very important fact when referring to the halving effect

    mining probably wouldn’t be so stinking expensive if the chip makers didn’t have a monopoly on the true mining market (selling 16nm chipsets privately for months) in parts of the world where electricity can be stolen or near to nothing in cost relatively speaking

    what a true distribution of mining requires is BTC code integrating updates like segregated witness so as to support the much wanted layer called lightning network

    this will help miners decide if they want to chase reward coin or invest in the more stable (eventually) mining position of processing transactions, either way choice is good for the open market which is good for all of us

  • InvestBitcoinGuide.com

    Speculation seems to intensify with the recent price move. If the price stay above 500$ I think most of miners will be all good.

  • Paul Peters

    Bitcoin miners won’t be feeling ANY impact from the halving if the price of bitcoin is twice as much as it was just a relatively short time ago. Also, you have to assume that they had already factored the halving into their projections long ago since they knew it was coming so this price surge may be more than just a relief to some miners but possibly a bonanza.