Bitcoin is a digital currency having a vast user base. Satoshi Nakamoto, a Japanese programmer, invented the first-ever and most successful cryptocurrency in 2008. Satoshi Nakamoto released the first-ever software of bitcoin after mining the genesis block in the year 2009. Satoshi Nakamoto is a mysterious identity, and no one is familiar with his actual identity. Satoshi Nakamoto issued a finite supply of bitcoin to mitigate the concept of inflation.
Inflation is a change in the supply of fiat currencies or any other currency, leading to an incline in the market value of goods and services. Satoshi Nakamoto has succeeded in mitigating inflation from the bitcoin complex as the rate of inflation of the bitcoin network is just 1.14%. However, the finite supply of bitcoin units and bitcoin halving is affecting the inflation rate to an exceeding extent.
Due to such progression, bitcoin trading and investing in bitcoin are some of the most profitable jobs. You can also check websites like british bitcoinprofit to get money making results in your trading journey. According to some rich sources, bitcoin halving impacts the store value of bitcoin in an extreme amount. Let’s find out whether bitcoin halving influences the market value of bitcoin or not.
What is bitcoin mining?
Before understanding the impact of bitcoin halving on the market value of bitcoin, you should know what bitcoin mining is. Bitcoin mining is the action of validating bitcoin transactions. Bitcoin miners have to solve a math puzzle in 10 minutes to verify the transactions.
To solve the math puzzle, bitcoin miners have to generate a hash rate equal to either target hash or lower than target hash to assign a nonce value to every transaction. As a reward for validating bitcoin mining or verifying the bitcoin transactions, bitcoin miners avail a block reward.
What is Block Reward?
Block reward refers to the number of bitcoin units a miner avail after validating the transactions alongside the transaction cost. Bitcoin mining block reward is not permanent, and the current block reward of mining is 6.25 units with the transaction cost. In addition, Bitcoin miners can only avail themselves of the block reward if they solve math puzzles in 10 minutes.
What is Bitcoin Halving?
As mentioned ahead, bitcoin has a finite supply, and there are only 21 million bitcoin units that bitcoin miners can ever mine. Bitcoin halving is the action or event that decreases the block reward of mining by half every four years. Bitcoin halving takes place when bitcoin miners mine 210000 blocks, and this roughly takes four years and sometimes less than four years.
Timeline of Bitcoin Halving
Bitcoin halving is a leap year process. The foremost bitcoin halving took place in November of 2012, and it decreased the block reward of mining by 25 units. The second bitcoin halving took place in the year 2016. It decreased the block reward of mining by 12.5 units.
The utmost recent bitcoin halving occurred in 2020, and the block reward of mining after the recent bitcoin halving is 6.25 units.
Why does bitcoin halving occur in less than four years?
You are familiar with the fact that every miner acquires a time of 10 minutes to solve one block, and to solve 210,000 blocks, it will take four years. However, according to the reports, bitcoin halving is now occurring in less than four years.
The only reason behind this fact is the robustness of the new bitcoin mining rig. The robust bitcoin mining rigs can solve the math puzzle in only 9.5 minutes, and this is why bitcoin miners can mine 210,000 blocks in less than four years.
Does Bitcoin Halving have an impact on the bitcoin market value?
The store value of cryptocurrency depends majorly on supply and demand. You are familiar with the fact that by cutting the block reward of mining by half amount, bitcoin halving also cuts the supply of bitcoin units by half amount.
Lower supply always leads to higher demand, and higher demand leads to a higher price. So, in a nutshell, yes, bitcoin halving does impact the store value of bitcoin positively. However, the impact on the store value of bitcoin halving is not immediate, as it might take a year to show incline in-store value.
The portion mentioned earlier demonstrates that, yes, bitcoin halving impacts the store value of bitcoin to a great extent.
