The next Bitcoin halving is scheduled to occur on May 12th. The reward will drop from 12.5 BTC to 6.25 BTC per mined block.
The Bitcoin halving is one of the events that the members of the ecosystem most anticipate in 2020. The mechanism will reduce the reward per block mined on this blockchain by half, which will affect the mining industry and could influence the price of Bitcoin. For this reason, the community is getting ready for the event, when it is less than a month until its activation date.
The halving is scheduled to occur on May 12th, at about 21:11:36 UTC, according to the website that keeps track of its count. The mechanism will be active when Bitcoin reaches the height of block 630,000, according to the programming in the blockchain code.
The halving mechanism, which is integrated into the Bitcoin network, is responsible for reducing the mining reward every 210,000 blocks. The event occurs every four years and it aim is to reduce the reward per mined block to 0 BTC by the year 2140.
This tool is programmed in such a way that Bitcoin is a deflationary currency since its issuance decreases over time and makes it a scarce commodity. In this way, as the demand for bitcoins increases over the years, the cryptocurrency theoretically becomes increasingly valuable in the hands of its owners.
This year, the reward per mined block will drop from 12.5 BTC to 6.25 BTC. Due to this, the community expects the halving to affect the income of the mining industry, which bases its profits mostly on the bitcoins that the network grants each time the network records a new block. In this sense, the miners and companies in the sector have been preparing for months before this hard financial blow.
On the other hand, some Bitcoin enthusiasts consider that the halving could lead to a rise in the price of the cryptocurrency. The network has previously recorded two other halving events, the first one in 2012 and the second one in 2016. On both dates, the price of Bitcoin began to rise even before the reduction of the reward by half occurred, since users perceive this event as a mechanism that revalues the cryptocurrency.
However, the current coronavirus pandemic affecting the economy worldwide has led to not very clear forecasts regarding the next Bitcoin halving, which does not allow predicting the behavior of the network.
Nic Carter, a financial analyst, considers that the cryptocurrency ecosystem should not pay much attention to the halving as it has no direct relationship to the price of Bitcoin. For that reason, the community could still focus their eyes on how this asset will behave, in the face of the challenges that the COVID-19 disease poses worldwide.
This world pandemic is an unprecedented situation that Bitcoin and other cryptocurrencies have had to face in the last few months. The community must observe the behavior of the main cryptocurrency, especially after the collapse that the global economy has been facing since the WHO declared coronavirus pandemic.
By Alexander Salazar