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All You Need To Know About The Third Bitcoin Halving

From inception, Bitcoin has rapidly grown to become the most preferred of investors. The novel price surge has come with it exceeding gold to become the best performing asset this year. The digital asset’s recovery occurred two weeks in advance of an uncommon event that takes place every four years, or every 210,000 blocks ; the Bitcoin halving.

What Are Blocks?

Block refers to documents that keep transactional information. These blocks are arranged in an endless linear sequence that form a chain of blocks, referred to as a blockchain. All information related to blockchain transactions is stored in these blocks, with each block connected to the previous one through the use of cryptography.

The first block that is created from the release of the digital asset is called the genesis block, or block zero. Block height refers to the number of blocks created from the block zero till date. The digital reward of a miner after a successful new block validation is called a block reward, or a block subsidy.

Since the spread out of Bitcoin, this crypto currency is set to never go beyond 21 million. This currency goes through an occurrence called the Bitcoin Halving.

What is Bitcoin Halving?

Bitcoin halving is a process of dividing the number of generated rewards per block in order to maintain the total supply of Bitcoin, which will not exceed 21 million. Bitcoin halving happens every 210,000 blocks and reduces the reward for 50 percent every time in a geometrical progression. The next Bitcoin halving is expected to happen on the 12th of May 2020 and will decrease the reward to 6.25 coins.

Previous Bitcoin Halvings

Bitcoin Halving- 2012

Halving day 2012 (November 28, 2012) was the day of the first subsidy halving, which occurred when block 210000 was solved. Until block 420000, the block reward would be 25 BTC instead of the original 50 BTC. At the moment before the halving, 10,500,000 BTC had been mined, 50% of the target cap. Back then, following the completion of block 210,000, the mining reward halved from 50 to 25 BTC.

Bitcoin Halving- 2016
The second Bitcoin halving occurred at Bitcoin block 420,000 on the 9th of July, 2016. The then-current block tax of 25 BTC halved to 12.5 BTC. This implies that the daily tax reduced from 3,600 BTC to the current 1,800 BTC.

The Third Bitcoin Halving

The third bitcoin halving will take place on May 12, 2020. Miners will see their revenues slashed in half from 12.5 coins to 6.25 BTC after the halving and speculators wonder what will happen after the event. The daily tax will also decrease from the current 1,800 BTC to 900 BTC.

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The Importance of Bitcoin Halving and The Impact on the Miners

The halving is not only an important occurrence as far as scarcity is concerned, but it will also have economic impacts on the miners. All Halving miners get their revenues cut in half and for them to make profit, the price has to balance the amount of capital they are putting into operations. Miners want to make gain and if transaction fees and the overall price of BTC is less than what they are spending, they will have to shut down. Succeeding the third halving, miners will not be the best sellers of bitcoin.

After the BTC halving on and after May 12, attention will be paid to the cryptocurrency’s hash rate and price. Some skeptics believe that if the price of BTC doesn’t outweigh the costs to mine, then there will be a lot of miner capitulation. This means the hash rate or overall security of the proof-of-work chain would reduce in miners left in mass exodus. If the price jumps above the cost to mine blocks and higher, then the hash rate should increase and the security will also be bolstered even more so. The firm Tradeblock assumes the price per BTC needs to be at least $12,500 per coin to avoid miner capitulation.

What Changes After The Bitcoin Halving?

Nothing, except inasmuch as any subsequent price change would leave you richer or poorer. But it will be impossible to know how much of the change is due directly to the halving.

The value of Bitcoin becomes notoriously volatile around and after a block halving. This means its prices can change rapidly during this period. Because of this it is impossible to predict the future of Bitcoin prices after the halving with complete certainty.

Buying bitcoins is a very simple and straightforward process. You can simply go to a bitcoin exchange website such as Cardtonic, and exchange your naira, other supported currencies, as well as gift cards into some bitcoins.
Investing in Bitcoins is a waiting game of its value to rise. This lets you decide when is a good time to buy or sell. There are many factors that determine the value of bitcoin. You never know what will trigger the next bear market.

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