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Bitcoin has been hitting new all-time highs in recent weeks, and enthusiasts feel it is poised for further growth ahead of the upcoming halving. Halvings are significant events built into the foundations of cryptocurrencies to limit supply, which have historically attracted attention coinciding with price spikes. To the crypto sector.
important facts
Bitcoin is built on a distributed computer network, or decentralized public ledger, that records the details of all transactions related to the cryptocurrency in separate “blocks” of information connected in a chain.
New blocks are added to this blockchain in a process called mining. Mining involves solving complex mathematical problems, and new bitcoins are awarded to miners who undertake the computationally intensive and energy-intensive process.
The Bitcoin reward that is minted each time a new block is added to the network decreases over time. This is an intentional feature designed to limit supply by slowing production, which is halved for every 210,000 blocks added to the network.
There have been three previous Bitcoin halvings, in 2012, 2016, and 2020, where the reward for mining a block was repeatedly reduced from 50 Bitcoins to 25 Bitcoins, 12.5 Bitcoins, and 6.25 Bitcoins.
Although there is no specific date built into the system, the next halving event is expected to occur sometime in April 2024, at which point the reward for mining each block will be reduced to 3.125 Bitcoins .
How will the halving affect the price of Bitcoin?
Bitcoin halving only affects the rate at which new Bitcoins are minted; it does not change the amount or value of existing tokens in circulation. The volatile and speculative nature of cryptocurrency markets makes it difficult to ascertain whether changes in value are due to a halving event or other factors. Cryptocurrency enthusiasts point to historic increases in Bitcoin prices around previous halving events, but there is little evidence that changes in monetary policy or consumer behavior played a role in the halving. do not have. However, the economics of Bitcoin mining will almost certainly change after the halving, as it takes twice as much energy and resources to obtain the same amount of Bitcoin as the already significant amount. The halving will allow miners to reduce costs and improve operational efficiency.
news peg
Bitcoin is worth about $1.4 trillion, or about half of the $2.9 trillion cryptocurrency market. It has seen an impressive rally in recent weeks, rising about 80% this year and soaring to an all-time high of more than $72,000. Other cryptocurrencies, like Ether, the second-largest by market capitalization, have also seen the market recover from a series of crashes and scandals, including the collapse of major institutions such as Sam Bankman Fried's FTX, Celsius, and Three Arrows. This is a level not seen in the last two years. Failures of major networks such as terraUSD (UST) and luna have wiped out billions of dollars in value. The ongoing rally may be driven by the impending halving event, but other factors also play a role, particularly investor enthusiasm for cryptocurrencies and the approval of Bitcoin exchange-traded funds (ETFs). There is a possibility that it is. The current high price may already have factored in the expected price increase due to the halving event, and there is no guarantee that the price will continue to rise thereafter.
big number
21 million. This is the maximum supply of Bitcoin. Currency limits are one of the key principles underlying any cryptocurrency project. Bitcoin's designer, Satoshi Nakamoto (pseudonym), intended Bitcoin and halving as a mechanism to curb the inflation often seen in traditional currencies. Currently, there are over 19 million Bitcoins in circulation. Assuming that halvings continue approximately once every four years, Bitcoin will continue to be minted until approximately 2140.
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