It is expected that at some point in the next few days, or even the next few hours, “miners” who mine bitcoins receive a 50% pay cut, which would effectively halve new production of the largest popular cryptocurrency in the world. The call Bitcoin halving could have many implications from the cost of the asset to the cryptocurrency miners themselves.
But like much of what happens within the volatile “cryptoverse,” the future is difficult to predict; However, experts in the field are taking the previous Bitcoin halvings of 2012, 2016 and 2020, as a background of what to expect from this year’s event. Keep reading to find out What is the Bitcoin halving, why it is important and how it could impact the price of the cryptocurrency.
The halving, which comes from the word halve in English which means to divide in half, is a scheduled Bitcoin event. which happens approximately every four years and affects the production of the cryptocurrency. The Bitcoin halving halves the reward miners receive for mining bitcoin.
This activity is carried out using specialized computer farms to solve complicated mathematical puzzles and when miners complete one, they obtain a fixed amount of bitcoins as a reward. Currently miners get 6.25 bitcoins per mined block, so when the halving occurs, their reward will be 3,125 BTC.
Why is the Bitcoin halving important?
When the reward for mining bitcoin decreases, the number of new bitcoins entering the market also decreases.; This means that the supply available to satisfy the demand for this cryptocurrency grows more slowly. And this limited supply is one of the most important characteristics of Bitcoin. There will only be 21 million bitcoins and more than 19.5 million have already been mined, so there would only be less than 1.5 million left for extraction..
“The halving gives us the certainty that bitcoin is immune to the inflation that consumes the purchasing power of fiat currencies. It is a reminder that bitcoin is the only truly scarce form of property in existence, the supply of which is progressively decreasing. The halving is the monetary policy of bitcoin, it is a countdown until it will not be possible to extract more in the year 2140, and also a reminder that there is relatively little time for the majority to buy Bitcoin,” explained Samson Mow, CEO of the BTC technology company JAN3, a Expansión.
When will the 2024 Bitcoin having be done?
According to the Bitcoin code, the halving takes place after the creation of every 210,000 “blocks.”, where transactions are recorded, during the mining process. There is no set end date, but it falls roughly once every four years. And the latest estimates expect that The 2024 Bitcoin halving will take place sometime this Friday night or in the early hours of Saturday, April 20.
How could the Bitcoin halving impact the price of the cryptocurrency?
Given that The price of bitcoin is determined by the law of supply and demandIf there is a lower supply of the cryptocurrency, the price tends to rise. But really, only time will tell. After each of the past three halvings the price of bitcoin was mixed in the first three months and finished significantly higher a year later.
“I don’t know how important we can say the halving is yet. The sample size of three (previous halvings) is not big enough to say ‘It’s going to go up 500% again’ or anything like that,” Kaiko research analyst Adam Morgan McCarthy told the AP.
Take for example the moment of last bitcoin halving in May 2020when the price of the cryptocurrency was close to $8,602 dollars according to CoinMarketCap and which almost multiplied by 7 until reaching $56,705 dollars in May 2021. Bitcoin prices nearly quadrupled a year after the halving and rally in July 2016.
What will happen to the miners after the Bitcoin halving?
Miners will face the challenge of compensating for reduced rewards, while trying to keep operating costs low.. The most prepared miners are likely to have laid some groundwork ahead of time and perhaps improved energy efficiency or raised new capital. One of the most likely results is consolidation, which has become increasingly common in the bitcoin mining industryespecially after the significant drop in cryptocurrencies in 2022.
How does the Bitcoin halving affect the environment?
Identify specific data on the environmental impact directly related to the Bitcoin halving remains a question, but it is no secret that crypto mining consumes a lot of energy and operations depend on polluting sources that have generated a lot of concern over the years.
According to recent research published by the United Nations University and Earth’s Future magazine, The carbon footprint of bitcoin mining in 2020-2021 in 76 countries is equivalent to the emissions of burning 84 billion pounds of coal or to the operation of 190 power plants fueled by natural gas.
Although industry analysts have argued that drives toward clean energy use have increased in recent years, Pressures on bitcoin production cause miners to turn to cheaper, less environmentally friendly energy sources.
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