The so-called “Bitcoin halving” was completed from Friday to Saturday night. This halving takes place once every four years and is intended to counter Bitcoin inflation by increasing the scarcity of the currency. During a halving, the reward for creating new Bitcoins (also known as mining) decreases. This slows down the rate at which new Bitcoins enter the market. This increases the scarcity of cryptocurrencies and increases their prices.
Miners play an important role in the Bitcoin network. They use powerful computers to solve complex mathematical problems and add new transactions to blockchains like Bitcoin’s global ledger.
Miners receive rewards in two ways. One is the transaction fee that users pay for faster transactions, and the other is the mining reward, which is newly created Bitcoin. Currently, the miner receives her 6.25 Bitcoins, worth approximately $437,500, for her work. After the latest halving, which took place between April 18th and April 21st, this reward will be reduced to 3.125 Bitcoin.
This reduced reward slows down the rate at which new Bitcoins are created, ultimately reducing the total supply. This scarcity is important because it maintains Bitcoin’s value proposition as digital gold.
In the past, halvings have led to large increases in currency values. Therefore, cryptocurrency investors were looking forward to the fourth halving.
Currently, 1 Bitcoin is worth approximately $64,800. The value of the cryptocurrency has more than doubled in the past six months.
Although the current halving is not expected to affect Bitcoin’s price in the short term, many investors We can expect big profits in the coming months. These predictions are based on the performance of cryptocurrencies after previous halvings in 2012, 2016, and 2020.
Currently, 19.6 million Bitcoins have been mined. A total of 21 million Bitcoins should eventually be in circulation on the market. This distinguishes digital currencies from fiat currencies like the euro, which can be printed without limit.
Source: the-blockchain.com
