The bitcoin blockchain ensures every 210,000 blocks or approximately 4 years bitcoin undergoes an event known as the “bitcoin halving.” This is an important historical event which has occurred twice before, once in 2012, and again in 2016. Next scheduled occurrence is between late April – May 2020.
Thousands of watts committed daily of electricity towards bitcoin mining shows the dedication these miners have for the competitive rewards. Miners solving complex computational equations results in a fixed reward in the form of bitcoin.
Following the last two bitcoin halvings, the current block reward is now 12.5 btc. In the year 2020, it will halve to 6.25 btc. What impacts does it have on the economics of bitcoin & the miners incentive to justify the costs & equipment associated with mining?
Think of Bitcoin as a self-sustaining system similar to gold-mining. The entire global supply of gold is enough to fill 2 Olympic size swimming pools. Bitcoin like gold has a fixed amount. A whopping 86% of bitcoin’s supply of the 21 million has already been mined.
Historically the bitcoin halving tends to have long-term positive effects on the price. When it comes to supply & demand combined with increasing scarcity of an asset usually results in increased value.
With history having a tendency to repeat itself bitcoin is likely to have a bright future. The increasing public awareness in the crypto ecosystem on a global scale is sure to impact the value as the average joe learns how to invest in this new asset class.
“The US has been slow to adopt bitcoin and crypto assets in general as part of a balanced and diversified portfolio. As more people globally adopt bitcoin as a store of value, the more the economics of supply and demand will influence prices within this dynamic market, “ says crypto asset advocate, educator, and orca.digital owner Ryan Miano.