Bitcoin Is Halfway To Its Next Halving: What Does This Mean?

May 7, 2022 2:50 pm

The current timeline shows that Bitcoin is now approximately halfway until its next halving event.

To give some context on what “halving” means for Bitcoin, the Bitcoin protocol essentially decreases the reward that it gives to miners by about 50% on average every four years.

Mining essentially introduces more Bitcoin into the blockchain, but is extremely energy intensive which is what makes Bitcoin a scarce commodity as it has a limited supply.

The amount of Bitcoin that is minable is finite and there will be eventually a time when all the Bitcoin on the blockchain is mined.

Investors are often interested in the halving event as it decreases the supply of Bitcoin available which in turns may increase the price of Bitcoin and spark a bullish rally.

BitcoinMagazine reports:

Millions of computers around the world attempt to be the next lucky miner to earn the reward by calculating the block’s uniquely identifying number through a function that takes things like Bitcoin transactions and a timestamp as parameters, as well as a random number known as a nonce.

Early bitcoin miners earned 50 BTC for each block they mined when the network was first spun up in 2009. The low-difficulty high-reward epoch began to fade in 2012 as the first halving ensued, cutting the reward to 25 BTC.

Four years later, in 2016, each Bitcoin block started giving out only 12.5 BTC for its miner.

Two years ago, the block reward was further cut in half to 6.25 bitcoin – the number that still prevails today. In 2024, the protocol is set to repeat the halving once more, dropping the block reward to 3.125 BTC.

If you look at the history of halving events, it typically introduces a “supply shock” for Bitcoin and causes a significant increase in the price of Bitcoin.

Based on the current schedule, the next halving is scheduled to take place in April 2024 and the previous one happened in May 11, 2020.

As we all know, the price of Bitcoin started its bull-run in 2021 which was a year after this halving event and some speculate that this may happen again with the halving in 2024.

Mining hash rate of Bitcoin has also reached an all-time high recently indicating that the activity on the blockchain has grown tremendously despite the recent crypto market slump.

CoinTelegraph reports:

With typical Bitcoin “honey badger” aplomb, the decentralized peer-to-peer electronic cash system also struck a new record: the mining hash rate hit an all-time high.

The hash rate hit 249.1 exahashes per second (EH/s) overnight on May 4th, pipping the previous all-time high by 1 exahash.

In essence, with the hash rate consistently setting new highs, Bitcoin security —as these computers or “miners” work to secure the network — has never been stronger.

Halfway to a halving and another ATH for the hash rate; it’s another small celebration for Bitcoin amid mini bear market woes.

Investors of prominent crypto assets would likely want to accumulate as much as possible before Bitcoin’s next halving since Bitcoin historically has a high degree of influence over the rest of the crypto market.

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