https://www.youtube.com/watch?v=k3N1mfvtWL4
The event of the year is just around the corner. Bitcoin halves the block reward. Investors are looking forward to the event with great expectations. We summarize all important information for you.
What is bitcoin halving?
Bitcoin is designed so that miners receive newly created bitcoins for their work. In each newly found block, these are distributed to the miner who finds it. The block reward at the start of the network in early 2009 was 50 Bitcoin. The block reward is halved every 4 years or 210,000 blocks. We are currently at block 628,600. So there are still around 1,400 missing until the next Bitcoin Halving. It is expected to take place on May 12th. The network is designed to generate an average block every 10 minutes. There is a countdown to this.
From block 630,000, the network nodes only accept block rewards of 6.25 bitcoin. If there is more or less in a block, it is discarded or is invalid.
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Will the block reward eventually go to 0?
Yes, the sum formula for the geometric series is 50 * 210,000 * (1 + 1/2 + 1/4 + 1/8 +….) = 5 * 210,000 * (1-1 / 2 ^ ∞) / (1-1 / 2)) = 21 million 50 because the block reward starts at 50 and 210,000 because 210,000 blocks are generated in each cycle.
What is the impact of bitcoin halving?
The economic laws of profit and loss mean that the miners work at the profitability limit. They spend a large part of the block reward on electricity and hardware. If the block reward is halved, mining will no longer pay off in the beginning, since the costs for the high computing power exceed the value of the reward. The hashrate will adjust and fall. Since less electricity is then used, mining is worthwhile again. However, the security of the network will suffer.
The scenario described does not apply if the price doubles immediately after the event. Then the miners would be in the same financial situation as before the event.
What does halving mean for the course?
Many crypto disciples believe that halving the block reward will drive the course higher. There are several reasons for this. On the one hand, sales pressure is expected to drop because miners have less Bitcoin to throw in the markets. On the other hand, you refer to the past. Logarithmic chart images show that after Halvings there were always bull runs and strong increases.
In contrast, there are simple market rules. The price is formed by supply and demand. The halving slows supply growth. Thus, if the demand remained constant, the price would only have to drop more slowly. The halving of Litecoin at the beginning of August last year also shows that the biggest price increase to date has been due to demand before the halving and because of it. At the moment, the coin is trading at around a third of the high that was reached shortly before the halving.
So it can only show the future where the Bitcoin price will go. In any case, there is still great optimism.
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