When Bitcoin Halving is expected and what to do with it
Bitcoin halving explained 2020
So, maybe you’ve heard a lot about Bitcoin halving in the past months. What exactly is Bitcoin halving, and how does it play into the role of Bitcoin prices? Today, we’re going to talk about the expected 2020 Bitcoin halving that is calculated to occur in May. We’ll talk about
- What it is
- When it has happened in the past
- What are the likely implications
If you’ve got some Bitcoin currency and are nervous about price swings due to the halving, or want to take advantage of the halving for your own profit, this is where you will learn everything you need to know to make your decisions about Bitcoin halving.
What is Bitcoin Halving
Bitcoin halving refers to the reward Bitcoin miners get for creating new hashes and effectively verifying blocks of transactions that are added to the ledger. Bitcoin transactions are grouped into blocks of transactions, and a block is created once a certain amount of transactions are reached.
Blockchain and mining
The mining process is a competition to be the first one to create a unique 64 character has for the network’s current difficulty target. That 64 characters “hash” is assigned to a block of transactions, which is then added to the ledger. The “chain” is the group of blocks, added consecutively, on the ledger. The reward for mining and creating these hashes is set by the network and depends on the number of transactions verified.
The original Bitcoin mining reward was set at 50 Bitcoin. For every block of transactions that a miner created a hash for, that miner would receive 50 Bitcoins. After roughly 210,000 blocks were verified, the reward for mining “halfs”. This will continue until all Bitcoins are created, currently set at over 100 years from now. The halving will be roughly every 4 years. There are currently 18 million Bitcoins in circulation, and the total amount of Bitcoin that will be created is 21 million, a hard limit set by the code of Bitcoin.
Bitcoin Halving Dates history
Keywords: Bitcoin Halving Chart, Bitcoin Halving
Let’s talk about the history of Bitcoin halving.
Halving Day, Nov 28th, 2012
On the original Bitcoin halving day, the price of Bitcoin was roughly $11. Within the next twelve months of the Bitcoin halving, Bitcoin would skyrocket to an all-time high of $1,100 a coin in 2013. It would then drop to roughly $220 and remain underneath $1,000 for the next few years.
Was the price spike related directly to the halving? No one knows for sure, but remember correlation is not causation, even in Bitcoin halving. Most Bitcoin experts agree that this spike was caused by the Cyprus bailout, and not by the halving. But that doesn’t mean that there was no effect on the price of Bitcoin caused by the halving, it’s just that other, intervening events had a created effect.
Pre-halving price: $11 / BTC
Post halving 18 months high: $1,100
Pre-halving reward: 50 BTC
Post halving reward: 25 BTC
Original Bitcoin halving chart[18 months Chart here]
Bitcoin halving July 9th, 2016
The next Bitcoin halving was July 9th, 2016, or a little under four years after the original. Bitcoin entered the halving day at $664. Bitcoin had begun to pick up a lot of mainstream press around the time of this halving, which would propel it to unseen heights.
In the intervening 18 month period, Bitcoin would reach its all-time high of $19,498 on December 17th, 2017. Why?
Bitcoin experts mainly peg this on speculation caused by mainstream adoption of Bitcoin, but there’s no way to know for sure. What’s known is that enough people valued Bitcoin highly enough that on December 17th, one coin was worth nearly $20,000.
Pre-halving price: $664 / BTC
Post halving 18 months high: $19,498
Pre-halving reward: 25 BTC
Post halving reward: 12.5 BTC
2016 Bitcoin halving chart[18 months Chart here]
Bitcoin Halving in 2020. When and why
Keywords: Bitcoin Halving
Once again, we are nearing the 210,000th block of Bitcoin to be created since the halving of 2016. This means that we’ll see another Bitcoin halving event in 2020. When exactly?
No one knows for sure, because it depends on the speed of creation of the blocks, which is caused by the number of transactions of Bitcoin. Some calculations say May 8th, some say May 10th, others in June. There’s no way to know for sure. As the day gets closer, the likelihood that the date is known will go up.
Bitcoin halving price changes
What are the possible effects of the Bitcoin halving on the price of Bitcoin? Will the Bitcoin halving cause the price to skyrocket again? Well, it’s difficult to say, because there area always intervening events. It could be that the price of Bitcoin mirrors the movement of the price after the previous two halving events.
No one knows for sure, but Bitcoin halving will automatically have an effect on the price of Bitcoin, because mining will become more difficult, and thus the creation of new Bitcoin will slow down.
Pre-halving reward: 12.5 BTC
Post halving reward: 6.25 BTC
Bitcoin Halving in 2020. The new hope for altcoins?
Another thing to consider is the crypto substitutes. Is the Bitcoin halving going to cause a surge of interest in other coins, because it is less profitable?
While so-called “alt-coins” may be in more demand after the halving, it won’t be because of the halving necessarily. Bitcoin halvings are a mechanism that brings stability to the creation of new coins but doesn’t slow the adoption rate. The price is tied to the belief in the value of the coin.
Bitcoin halving creates stability
Bitcoin halvings create stability and confidence in the coin and the underlying use itself. That should drive more adoption, as the confidence that Bitcoin should stick around will drive more people to use it, which in turn, should drive more Bitcoin halvings.
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