Without a doubt, there is no event within the crypto world comparable to Bitcoin’s Halving. Well, because of the attention it attracts to it, and the effects it can have on the crypto market. Halving has become the closest thing to an Olympic Games in the world of Blockchain technology. Therefore, the broker Plus500 tells us everything about Halving Bitcoin 2020, and the effects it will bring.
5 lessons from the third Bitcoin Halving
The basics of the event
So, the Plus500 report starts by explaining the basics behind the Halving Bitcoin 2020. For, despite the enormous publicity this event received in the specialist media. Including a virtual party hosted by Binance to welcome it. Not everyone who lives in the crypto world knows what it’s all about.
As we have also explained here in Crypt Trend, the Halving is an event that occurs in the Blockchain of Bitcoin every 210,000 blocks mined. It occurs approximately every 4 years, with differences of months depending on the speed with which the blocks have been mined. This event decreases the reward received by Immediate Edge / Bitcoin Era / Crypto Cash / Bitcoin Future / Ethereum Code miners by half.
So far, the Bitcoin Blockchain has passed through three Halves. The first occurred in 2012, when the 210,000 block was mined, reducing the block reward from 50 BTC to 25 BTC. The second in 2016 with the 420,000 block that reduced the block reward from 25 BTC to 12.5 BTC. And finally the one that took place a couple of days ago when the block 630,000 was reached, which reduced the reward to 6.25 BTC.
Why a Halving?
Now, while it’s easy to understand what Halving Bitcoin is, it’s not so easy to see what use it is. After all, it may seem strange at first glance to think that the idea of voluntarily reducing the perceived reward you want to undermine in the BTC chain. And that is, therefore, the basis of how cryptomoney works.
Well, Halving was designed by Satoshi Nakamoto as a deflationary mechanism. Whose ultimate purpose is to prevent the value of Bitcoin from decreasing over time. To which end it slows down the increase in the money supply of cryptomoney. Which, in the face of a stable demand for the cryptoactive, should cause the price of BTC to increase significantly.
This is exactly what happened in the previous Halving Bitcoin in the years 2012 and 2016. These increased the price of BTC by 50.162% in 2012 and 9.054% in 2016. Generating an important expectation that this increase will be repeated during this year 2020.