The halving will occur when the mining of block 630,000 of the blockchain is completed. This will be the third halving in the history of Bitcoin
In about a year, Bitcoin’s halving event will occur, so users will see the next reduction in the BTC reward generated by each block added to the chain. Currently, each block is equivalent to a reward of 12.5 new BTC, while in the next reduction it will go to 6.25 BTC. This division occurs every 210,000 blocks.
In this way, the protocol ensures that BTCs are not issued before the stipulated time, thus mathematically controlling inflation. In addition, this mechanism guarantees the progressive increase of the cryptocurrency’s total supply, whose limit is 21,000,000 BTC.
This new reduction, which will occur upon completion of the mining of block 630,000, will be the third in the history of the Bitcoin blockchain.
Until now, a total of over 577,000 blocks have been mined. In other words, almost 53,000 are missing to reach the division of the reward, known as halving, which occurs every 4 years, and that is expected for the next days of this month, depending on the fluctuations in processing power.
From the Genesis block, mined by its creator Satoshi Nakamoto, each block mined amounted to a total of 50 BTC. Then, when reaching the first halving in 2012, the figure was reduced to 25 BTC. The second halving occurred in 2016, with which the amount was divided to the current 12.5 BTC per block.
Among the portals that track the progress toward the next event, most agree that the final date will be next May 23rd, 2020, depending on the mining rate and the processing power.
However, despite this, some anticipate an earlier date, citing the increase in the Hash rate, which already exceeds 50 EH / s, according to BitInfoCharts data. Among those who make such predictions are the developer Jameson Lopp and bitcoinclock.com. Even so, the possible difference in the date would not be greater than a few days.
Variation in the Price of BTC
To date, every Bitcoin halving has preceded an increase in the cryptocurrency’s value, which helps maintain the levels of profitability for the miners.
In 2012, the price went from US $12.35 on the day of the division to US $127 150 days later, according to BitcoinClock data. Then, in 2016, BTC’s value was US $650.63 on the day of the halving, while in the following 150 days it reached US $758.81.
While the circulating supply of BTC approaches its maximum, the rate of issuance of the cryptocurrency decreases. This, added to the growth in its adoption and demand, has generated increases in the cryptocurrency’s price.
It is difficult to predict what will happen after the mining of block 630,000 is completed next year and, even less, how much increase there will be in the price. However, despite this, until now each event has been followed by an increase in BTC’s value.
Regardless the fluctuations that Bitcoin might have, this crypto asset has demonstrated a high level of popularity among network users. Before its last block is mined, it remains the first alternative for those who wish to venture into the cryptocurrency business.
By Willmen Blanco
