Halving is scheduled Bitcoin protocol that reduces by half the reward received miners by adding a new block to the main chain event.
This happens every 210,000 mined blocks (approximately every four years), as established by Satoshi Nakamoto, and it happened the first time in 2012.
The second time the Halving will happen this year, specifically on Saturday June 9 in afternoon midmorning in Europe and in America. Once this change is executed on the network, the rewards will be 12.5 per undermined block BTC, instead of the current 25 BTC receiving miners.
This event undoubtedly change the Bitcoin ecosystem to modify from various fields. To have a broader understanding about it, we break down the most important and striking aspects of halving:
In a centralized economy, the central bank has the responsibility to create money at a rate according to the amount of goods and services exchanged by citizens. This would establish that trade is conducted with stable prices.
However, this does not really happen because of bad banking and government practices that end up altering the economy. This is one of the reasons why the global economy suffers from inflation and steady debt, devaluing the currencies of the countries and causing social crisis.
Bitcoin is designed to be programmed currency issue and then decrease over time, and that is why cutting the reward applies miners. This positively affects the economic ecosystem because, with fewer coins in circulation and higher demand, the value of Bitcoin tends to increase over time.
Another advantage is precisely planning economic system, since being scheduled issuance of coins and become public knowledge, users can be planned on the basis of this information and enjoy greater financial stability.
Halving certainly impact firsthand in mining bitcoins. To cut in half the reward for mined blocks, profitability to keep equipment immediately be affected due to the drop in revenue. That is why the predictions suggest that the price rise is given quickly in view of the miners seek to bring at least its relationship investment gain it possessed before the event.
Processing power Bitcoin network will undoubtedly increase with the arrival of halving. Proof of this has been the arrival on the market of new mining equipped with chips that can provide more power and efficiency. Something we will see more frequent after Saturday 9 July.
There is a hypothesis that the miners and mining groups reach their equipment off due to losses caused by the arrival of halving. However, as already mentioned, this cut of issuing coins can cause a price increase that achieves balance economic calculations. But the question focuses on how long it takes to get such a rise in the price of Bitcoin.
Currently, there are many users waiting for the event to happen to observe the behavior of the market and the development of mining bitcoins before investing. Despite the uncertainty, are greater positive predictions about the future of mining then halving, that negative. Perhaps this can be a good example of self-fulfilling prophecy.
EXPERIENCE IN THE PREVIOUS HALVING
While in 2012 the context of Bitcoin was very different from today on adoption, mining, marketing and capitalization, the price of cryptocurrency had a significant increase once held the halving.
On that occasion the reward for mining bitcoins block went from 50 BTC To the current 25 BTC. Bitcoin at that time did not experience much attractive and interesting market only developed in the portal sale of illegal items Silk Road , which was housed in the Deep Web.
Although Bitcoin needed nearly three months to double its market value ($14 to $28), then he began one of the most important climbs in its history where it managed to break the important barrier of $100.
Given the current context, where Bitcoin has gained much importance in the financial markets and currently its market capitalization is greater than $10 billion, it is estimated that the price reaches then doubled the halving faster compared to 2012.
HALVING OF LITECOIN
The most similar to Bitcoin in its design, protocol and even their behavior in markets, is certainly cryptocurrency litecoin. The cryptocurrency created by Charlie Lee experienced his first halving in August 2015, when the reward for mining block 50 LTC became only 25 LTC.
At that time, the price of litecoin showed a slight fall before the arrival of halving and subsequently gained value to enter a long period of stability that broke with the recent escalation that began last May.
Mining litecoin size is much less compared to Bitcoin. However, the miners came not to suffer losses with the arrival of halving. This led largely by the vast majority of miners litecoin are located in China, where the cost of electricity is quite low compared to other countries.
There is no doubt that this second halving be the first to be received with great expectation, uncertainty and curiosity both bitcoiners as new network users. This event may mark a new stage in the Bitcoin ecosystem react according to how the mining community, mining groups and users in general.
In this spirit of change have been organizing various celebrations to welcome the halving, here we leave the list so that you attend the nearest and but… Well, to put together a with friends and friends bitcoiners!