What Is The Bitcoin Halvening And Why It Matters

The Bitcoin Halvening (or halving) is a significant moment in Bitcoin’s history. Bitcoin’s Halvening is a pre-programmed event that protects Bitcoin from inflation and helps ensure a degree of scarcity for the digital asset. 

Before we get into the thick of the Bitcoin Halvening discussion, let’s take two minutes to go over some quick halvening questions. Then, we can get into the juicy stuff.

What is the Bitcoin Halving? 

The Bitcoin Halving is an event pre-determined by Bitcoin’s programming where mining rewards are cut in half. Basically, the amount of BTC miners can earn as a reward for validating the next Bitcoin block is cut in half. 

In the 2020 halvening, the mining subsidy is going to be split from 12.5 BTC to 6.25 BTC. 

Why is the Bitcoin Halving Important? 

Bitcoin’s many Halving events seek to give the asset an element of “scarcity” to protect its long-term value. Bitcoin would become nearly as scarce as gold. 

This Bitcoin Halving event will cause the asset’s inflation rate to drop to 1.8%, making it lower than the inflation rate of the U.S. Dollar. This is particularly notable in 2020, as the United States has been printing trillions of dollars in economic stimulus packages to tackle the economical chaos caused by the COVID pandemic. 

“The Halving is an important event for Bitcoin, but it’s just one element in the perfect storm that BTC is enjoying at the moment,” comments Alex Mashinsky, CEO of Celsius Network. “Governments around the world are implementing unprecedented fiscal stimulus, which risks causing high inflation across fiat currencies, which reinforces Bitcoin’s value proposition as a deflationary asset. As a result, many first time retail investors are flocking to BTC as a way to protect their wealth.”

Every future Halving will make Bitcoin more scarce. Since we primarily see BTC’s value as a relation to USD, we have two diametrically opposed forces that point to a higher Bitcoin price.

Halving events tend to come with a flood of industry price speculation, which mostly assumes the Halving event will cause a surge in Bitcoin’s price. 

How Many Bitcoin Halvings are there? 

Halvings occur every 210,000 blocks until the block mining subsidy reaches 1 satoshi, the smallest unit of bitcoin (0.00000001 BTC). Once the final Halving event occurs, the next block subsidy drops to zero, and miners will no longer be awarded block mining subsidies but can still collect transaction fees. 

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To get a better understanding of Bitcoin, read our Bitcoin guide or  more

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