If you’re excited by the potential of cryptocurrencies, hold right there! Before you do anything, first learn how they come to be and what is cryptocurrency mining. If you’re already aware of that, buckle up because the great halving of the Bitcoin is coming.
Bitcoin has a maximum supply of 21 million tokens. In circulation at the moment are a little less than 18 million, with 1,800 on average mined each day. As you might be aware, mining is an expensive and demanding digital process that can suck a lot of time and resources for electricity and other bills. That’s why many people prefer to trade Bitcoins using systems like the Bitcoin Loophole instead of mining.
But many people are dedicated to mining as well. Why? Because the reward for each block of verified transactions comes in Bitcoin tokens. And that reward is what’s gonna get halved real soon.
How Are Miners Rewarded Today?
When Bitcoin was first introduced in 2009, the rewards of each mined block of the ledger amounted to 50 tokens per block in total. These tokens get divided between the miners involved in the mining of the block.
Scarcity is one of the biggest reasons why Bitcoin is so expensive. But if a reward of 50 tokens remained, the circulating supply would be greater, thus naturally lowering the price of BTC. That’s why a halving had been decided for every 210,000 blocks mined.
The rewards have been halved twice in the past 10 years – to 25 BTCs and then the current amount of 12.5 BTCs. In the first half of 2020, it is expected that miners will reach another 210,000 and the reward will be halved once more to 6.25 BTCs.
Analysts expect this to cause another significant surge in prices, and we might witness a drastic bullish trend soon after. Maybe now is the time to consider whether it will be worth it to buy some Bitcoins or fractions of a Bitcoin.
Until the halving comes, we can only speculate what might happen, but a major shake of the cryptocurrency industry is bound to come.