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?
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
If you liked this article follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin and altcoin price analysis and the latest cryptocurrency news.
