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@Asah

Certified Content Writer✍️✍️✨ Web 3 Enthusiast💥💯

Joined February 2024

Minna, Nigeria

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Apr 19, 2024

BITCOIN HALVING Confused about Bitcoin halving? This quick guide explains it all. Bitcoin halving, also known as "the halvening," is a significant event built into the Bitcoin network that occurs roughly every four years. Here's a breakdown: REDUCED  REWARDS: During a halving, the reward for successfully mining a new block of bitcoins is cut in half. Miners are the computers that verify transactions and add them to the permanent public record known as the blockchain. Initially, miners received 50 bitcoins per block. After the first halving in 2012, it went down to 25 bitcoins. The most recent halving, in May 2020, reduced the reward to 6.25 bitcoins per block. SCARCITY BY DESIGN: This reduction in mining rewards is intentional. Satoshi Nakamoto, the creator of Bitcoin, designed it with a finite supply of 21 million bitcoins. The halving mechanism gradually reduces the rate at which new bitcoins enter circulation. This creates scarcity, a core principle in economics that often drives up value. IMPACT ON MINERS: While the block reward decreases, miners still earn transaction fees associated with verifying transactions. However, the halving can put pressure on mining profitability, especially for miners with less powerful equipment. POTENTIAL MARKET RESPONSE: Historically, Bitcoin halving events have been followed by periods of price increase. The theory is that as the supply of new bitcoins becomes tighter, existing bitcoins become more valuable due to increased demand. However, it's important to remember that the cryptocurrency market is complex and influenced by various factors. In essence, Bitcoin halving is a programmed event that reduces the rate at which new bitcoins are created, potentially impacting both miners and the overall value of Bitcoin.
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