Bitcoin

Bitcoin Halving - Surges on Google in an especial way and all you have to know

The Bitcoin four-years-event will take place this year and unlike any other, there are special things happening in the incoming one which may be an indication of something special and then what is Bitcoin Halving? For those still new or haven’t quite grab the concept.

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oyeibrahim

Nigeria


  • 31st, October 2020 (7 months ago)
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To get a basic understanding of this whole issue and its importance, let’s take a peek at the beginning of everything. Bitcoin was launched in 2009 by Satoshi Nakamoto as the first of its kind decentralised digital currency. Being decentralised, there is no central control and so the creation of new coins will be automatic to ensure no one can create any more at will. Then there must be a way to create and distribute new coin, Satoshi brilliantly fashioned a way out; since transactions are approved by nodes in the Bitcoin network and to approve a transaction the node will have to solve a problem, not the normal mathematical problem that will take the computer some milliseconds but rather one that require a huge computing power, one that your normal PC will not be able to handle. Satoshi then programmed it such that solving a new problem and adding a new transaction block to the Blockchain will get the node that did that (the miner) an amount of Bitcoin which will be created upon completion and assigned to the miner. Note that the reward is assigned to the first miner to solve the puzzle so there is a big competition among miners. Isn’t that brilliant?

The Bitcoin reward for miners started out at 50 BTC then it will be reduced by half every four years in a process called Bitcoin Halving until it becomes Zero when the maximum Bitcoin amount of 21,000,000 BTC is reached. What? So what happens when there is no block reward?

It’s simple, Satoshi already thought about this. The miners will be paid only with the transaction fee of those transactions.

Another thing to note is that the miners are responsible for keeping the Blockchain alive, that is, without miners no transaction will ever go through. Basically, whenever you send a coin, any amount and you pay a transaction fee, the miners (running a node with the required computing power) will pick those transaction up and add it to the Blockchain getting the Block reward and your transaction fee as reward for their effort, if your transaction isn’t added to the Blockchain then it will be as if it never existed and won’t go through. So you can see that miners are the soul of the system and Halving is as important.

So Bitcoin started out at 50 BTC and it was reduced (halved) to 25 BTC in 2012, then to 12.5 BTC in 2016. By May 2020 (approximately 12th of May), it will be reduced to 6.25 BTC.

Issues around Bitcoin Halving

Bitcoin halving has always been a matter to discuss because it is linked to the existence of miners who are the soul of the system and the price is always touched somehow positively or negatively.

Bitcoin and Cryptocurrency miners in general use a huge computing power and energy for cooling the system, so typically in a mining firm you see stacked up series of CPUs interconnected to help increase the mining power and by so that increase the probability of solving the Blockchain puzzle first before any other.

With that, cost of mining Bitcoin is so big that ordinary individuals can’t possible delve into the task. The sad news is that the cost keep and will keep increasing owning to the fast that the difficulty for solving the puzzle is programmed to increase.

With this phenomenon, over the course of time Bitcoin halving has always been connected with the price, why? Because miners are spending millions mining and the reward must keep up so they don’t run out of business, there have been many cases of mining firm close-up of course when they can’t get a profitable amount off the work.

So, the price of Bitcoin has been thought to move up after Halving to help fix the issue of reduced reward and it has always been so to some extent. In 2017 for example, Bitcoin reached its highest price till now, and that is after the 2016 Halving and another is the popularity of Bitcoin and Cryptocurrency which increased astronomically at the time. Of course the 2012 Halving also occurred at a time when Bitcoin was increasing at its normal pace.

This year’s Halving details

This is the third Bitcoin having and will reduce the Block reward to 6.25 BTC. The estimated Halving eve is 12th of May 2020 at around 09:24:01 (Source: bitcoinblockhalf).

A never before seen enthusiasm and a praiseworthy trend

There has been a surge in google search for “Bitcoin Halving” and almost touching the previous record set. This is so wonderful and analysts have been pointing out a pattern, the last time the search went up that much was in the 2016 Halving and we all know what followed in 2017, but the most amazing thing about this is that the search is surging in up to five months before the halving.

This is so promising and may even be pointing out another course of topic which is adoption, this may imply that Cryptocurrency adoption and awareness is fast spreading and we may expect wonderful things looking forward.

It may however not point to new users as it may be current Crypto users making the search but whatever it is, the trend is so important and it shows a huge enthusiasm in the community with a fact that the Halving is still more than 100 days away. And in the best scenario we may be in for experiencing a trend that last occurred in 2016 and 2017 which may set a new all-time high in the Cryptocurrency market.

Happy with the Halving now? Well, tell that to the miners.

Of course after any Halving the difficulty continue to increase and with a reduced Block reward. This usually force many miners out of the mining business. Miners will need to acquire more energy efficient and powerful hardware and move to a more favourable location, a very cold area with cheap electricity, the coldness will help reduce amount spent on cooling the hardware.

But in any case, we are sure to see mining firm closing up as is always the case, and enabling those continuing to get more profit so they can continue maintaining the Blockchain. Sorry miners.

More updates will come as the issue progresses.


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