What is the Bitcoin halving?
A Bitcoin halving, occasionally called ‘halvening,’ is an event where the reward for mining new blocks is reduced by half, resulting in miners receiving 50% fewer bitcoins for confirming transactions. These halvings are set to happen approximately every four years or every 210,000 blocks until the network generates the maximum supply of 21 million bitcoins.
In this article, we’d explore the basics of Bitcoin halving, it’s history and key events and it’s potential impact on the crypto market
Understanding the basics of the Bitcoin halving
The halving, devised by Bitcoin’s creator Satoshi Nakamoto, aims to limit the bitcoin supply, mirroring precious metals’ scarcity like gold. This reduction in supply is expected to continue until the total number of Bitcoin in circulation approach the 21 million limit, likely around year 2140.
For miners, especially those with expensive equipment, the halving impacts them significantly. Successful miners are rewarded with block rewards and transaction fees..
The decrease in block rewards has the potential to affect miners’ profits, posing challenges for less efficient miners and possibly resulting in a decline in the overall number of miners and the network’s computational power.
However, as block rewards decline, transaction fees are anticipated to become a more critical revenue stream for miners. Additionally, if Bitcoin’s price rises due to reduced supply, it could mitigate the impact of reduced block rewards, sustaining or even boosting miners’ profitability.
Bitcoin halving history: Key events
Bitcoin has undergone three halving events since its launch in 2009, sparking extensive discussions within the crypto community, particularly regarding its potential impact on the cryptocurrency’s price.
Each halving event correlated with a rise in Bitcoin’s price, suggesting a link between supply reduction and value increase. The most recent halving in May 2020, reduced the block reward to 6.25 bitcoins. The next halving is anticipated in April 2024, the specific day will depend on how quickly the blockchain grows between now and then.
Will the halving increase Bitcoin price?
The optimistic outlook on Bitcoin Halving has traditionally linked to price changes, with certain investors expecting a rally after the event. It’s worth acknowledging that while past trends indicate Bitcoin prices often go up post-halving, this isn’t assured, and Spherium Finance doesn’t predict future price movements.
The trends will hinge on various factors including ongoing adoption and other elements affecting demand.
About Spherium Finance
Spherium Finance is a cross-chain protocol offering a complete suite of financial services consisting HyperStake, HyperBridge and HyperSwap with all these features integrated in one platform. Spherium’s HyperStake is currently built on Layer2 solution to minimize gas fees and increase execution speed.
HyperBridge offers users a simplified cross-chain solution for every for DeFi user to exchange and transfer crypto assets across 15 EVM compatible chains.
