An event that takes place in the upcoming few months. The event is called Bitcoin Halving.
Halving is the process where Bitcoins have to go through a process when it reaches 210,000 blocks.
The process will continue until the network has generated a maximum supply of 21 million Bitcoins.
The halving process also occurs to miners. The rewards every miner receives after every transaction of bitcoin will be halved and miners will receive 50% fewer bitcoins for the transaction they verify.
The halving process is the most important even among the traders. In contrast, the number of bitcoins production is being stopped during this process therefore, it becomes so obvious to see the rise of bitcoin price due to high demand.
However, it statically happened a few months before the halving process started which accordingly caused bitcoin price dramatically.
How often does it occur?
Next bitcoin halving is happening in 2020 conversely, the date and month are not yet known.
Bitcoin halving occurs every 4 years. In general, the previous halving took its place on 9 July 2016 therefore, it might be possible if 2020 halving takes its place in the month of May or June.
Although, it will leave a major impact on the miners as before the previous halving happened miners used to get 50 BTC on every transaction.
When this tragedy occurred miners received 50% less BTC which means price dropped from 50 BTC to 25 BTC
However, this halving price/reward will also drop down from 25 BTC to 12.5 BTC for each bitcoin transaction.
The reward will cut in half till the last bitcoin halving.
What will happen to the bitcoin price?
As many bitcoin experts have said, the price of bitcoin may follow the same structure to the two previous halvings.
On 7 February 2020 bitcoin bounce on $10,000. It seems strange that halving will happen and suddenly the price surge up just like in the previous halving bitcoin price raised from $576 to $650.
Regardless, the bitcoin price is consequently dependent on its supply though sometimes demand could remain static.
However, since trading has become more mature traders are now more likely to invest in other cryptocurrencies too.
Therefore, when bitcoin surmounted its $10,000 price in the current month, then it led everyone to one conclusion that demand of this coin is high at peak nonetheless, supply is low now.
If the price of bitcoin went down then the conclusion was something else as supply would be high and demand would below.
No.1 cryptocurrency in the world now. Conversely, No one shouldn’t feel hesitant while saying that bitcoin is a type of deflation.
In simple language when the time comes a supply of bitcoin will be stopped when it reaches 21 million caps.
Deep down every bitcoin trader knows that bitcoin’s concept lies within a mining process.
What will happen after the bitcoin cap reaches 21 million?
When the supply reaches 21 million, users will not be able to get new bitcoin as the mining process will be stopped at that time. Conversely, miners will no longer receive bitcoin to verify every transaction.
Besides, they will receive transaction fees from those users who are making transactions.
Eventually, the last halving will take its place in 2140 till then, bitcoin will remain as a type of deflation.
What happened with miners when bitcoin price cut in half?
As stated earlier that when miners price cut in half, miners eventually count their price in advance and find out that the mining process would no longer be profitable for them.
In contrast, the mining process requires vast amounts of electric power and other hardware.
Some miners decide to stop mining as the resources which require mining bitcoin would cost them more than their earnings.
However, when miners step away from the process, then the software will automatically adjust and verify each and every transaction to maintain its rate and speed.