Bitcoin halvings reduce the rate at which a new bitcoin is created by half.
Halvings are an automatic process built into the network and they occur each time
another 210,000 blocks are mined, which normally takes about four years.
Hey there, my name is Trevor with CMC and today we're going to be talking and
discussing Bitcoin, having what they are, Why they happen, and why you should care.
When Satoshi Nakamoto created Bitcoin in 2008,
you realized that he needed to release Bitcoin gradually into the market
in order to prevent early adopters from hoarding it, which would have slowed
adoption or even stopped most people from using Bitcoin at all.
After deciding to limit the supply to 21 million coins, Satoshi implemented
a mechanism which would release Bitcoin in a predictable way.
Over time, every 210,000 blocks, which we call a having halvings, it
mostly affected Bitcoin miners
who confirm Bitcoin transactions and add new blocks to the blockchain.
Using computing power.
The network rewards miners
with Bitcoin for their work, which is how new Bitcoin is created.
After each halving Bitcoin miners receive half as much bitcoin for their services
and this makes mining more competitive and also encourages miners
to source cheaper sources of fuel to also power their operations.
And it might seem illogical for miners to continue
working for half as much profit over a new bitcoins are scarcer
after each halving, which should increase the value of each coin.
Indeed, price data shows that historically Bitcoin does increase in value
after each halving, thereby helping miners recover lost earnings over it.
Just because something has happened
in the past doesn't mean it's guaranteed to do so in the future.
And the Bitcoin mining reward will have 32 times
before Bitcoin's full supply of 21 million coins
will have been reached and this should happen by 2140.
So cheers to us not alive.
And to date, 19,370,000 coins have been mined before the first halving
Bitcoin miners received an enormous block reward of 50 Bitcoin per block.
But as of May of 2023, after three halvings,
the block reward has been reduced to 6.25 BTC per block, and over time
the impact of each having will diminish as the block reward approaches at zero.
So what happens during the last having
what The last having took place
on May 11th of 2020, during the height of the pandemic,
Bitcoin's price increased by 19% during the year leading up to an event
from a $7191 to $8560 over the 500 in 46 days.
Following the halving, Bitcoin rocketed 680%
to $67,549 per coin,
which is its all time high, which was reached on November 8th of 2021.
The preceding having occurred on July 9th.
Bitcoin's price increased 142% during the 12 months preceding that,
having from $269 to $651 by Christmas the following year.
Bitcoin's value had soared at 2,824%
to $19,000, which was its all time high at the time.
And similarly, the first ever Bitcoin halving in November of 2012 saw
Bitcoin's price increase 384%
from $2.55 to $12.35.
When is the next Bitcoin having
bought the next
Bitcoin having will take place at block 840,000, which is estimated to be on April
7th of 2024 and this is about 300 days away at the time of this video.
So on this day, the block mining reward will drop from 6.25
Bitcoin to 3.125 Bitcoin per block.
Bitcoin tends to bottom at 12 to 18 months prior to the halving event
and historically has performed well leading up to the having catalyst event.
So do bitcoin having changed the price of bitcoin
Well as shown here past having to do
seem to have an effect on Bitcoin's price during the year
following every having Bitcoin's price has risen between 384 to 2824%.
But that doesn't necessarily mean that having impact Bitcoin's price.
It's possible the two events are correlated,
but that halvings don't directly influence the price.
The next having could see Bitcoin's
price rise by 81%, according to Bloomberg Intelligence.
But not everyone agrees that such a bull run is written in the stars.
Second, having, for instance, Bitcoin's price increase by nearly 3,000%.
But it happened at the time when Bitcoin was being covered extensively
by the media and its positive price momentum was already very strong.
It also coincided with surging interest in ICOs or initial coin offerings, many
of which required investors to buy Bitcoin before they could get involved.
It's also worth noting that Bitcoin's price has historically
sat consistently higher after each halving before the 2016, halving, for instance,
Bitcoin's value generally hovered at around $600,
whereas after the having its value rose to about $18,000
and then hovered at between 3000 $512,000 until these subsequent having in 2020.
The same pattern can also be seen following the 2020 halving after
which bitcoin's price has hovered between 20000 to $35000.
So how do Bitcoin halvings affect miners?
Well, after the third halving back in 2020,
whole market cap actually spoke with 16 Shin Yu Mao, who founded
Bitcoin mining pool F2 Pool about how the decrease in block rewards
affected the bitcoin mining industry now said that the loss of profitability
for miners had not been greater than they had expected him.
He did note, however, that a Bitcoin habit event means that miners have to decide
if they can afford to continue mining, and that might mean looking for lower
electricity costs and also other ways that they can save on overall costs
to keep their mining machines running and also earning new coins.
Some argue that the price increases Bitcoin has experienced following past
having has more than compensated miners for the lower number of Bitcoin earned
for mining each block.
To put it another way, miners are earning fewer bitcoins, but those bitcoins
are worth more than double what they were before the halving.
So what are your price predictions when there is the bitcoin having
that happens in close to around 300 days, let us know in the comments down below.