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Bitcoin Halving – Understanding What it is, its Impacts and More

Bitcoin halving is a popular term in the crypto space. Every crypto enthusiast should be aware of what this term means, how it impacts different aspects of the crypto space and more.

The crypto space is quite vast and there are numerous things at work. As a new crypto enthusiast, it can be difficult to get a good understanding of everything it offers if you do not spend a good amount of time to learn about it.

Therefore, since BTC halving plays a major role for Bitcoin and the crypto market generally then learning about it is important.

Here are some details for you that can help you understand what halving is and when the next Bitcoin halving will occur.

What is Meant by Bitcoin Halving?

Halving is an important concept every crypto investor or trader should know about, especially if they are interested in the flagship crypto asset.

To be specific, BTC halving is a process where the future supply of the crypto king is slashed in half. With the process, the supply of Bitcoin is kept in check in the market while the demand for the flagship crypto asset keeps increasing. This feature keeps increasing the price and value of Bitcoin and keeps it from inflation.

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This is the basic function of BTC halving. The details mentioned below will also target when the next Bitcoin halving is set to occur.

Impact of BTC Halving

There are two ways Bitcoin halving impacts the crypto space. It has some affects on the crypto miners and also on the general crypto market.

Here is how.

How are Miners Affected?

New crypto coins are created through a process called mining and the people who create them are called miners.

Mining is a complex process that requires heavy computational energy. Through this process, transaction records are added digitally to the blockchain. If you mine an asset you can earn the crypto asset without investing money in it.

Therefore, whenever miners validate transactions or add new ones to the Bitcoin network they are awarded new BTC coins. When halving occurs, the total number of newly minted BTC coins awarded to the miners is also reduced in half. This is how the miners are affected by the halving process.

How is the General Crypto Market Affected?

Bitcoin halving is a significant process that occurs for the crypto king. BTC has a heavy dominance in the crypto space, which means that any price fluctuations noted for the asset also causes the prices of the altcoins to rise or fall.

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Usually a drop in BTC instantly has a notable affect on other cryptocurrencies as well. However, when Bitcoin is in a bullish run, the altcoins underperform. This is because people prefer investing in the crypto king, which is why they pull their investments from other altcoins and direct them towards Bitcoin instead.

An interesting fact to know here is that the price of Bitcoin surges after every halving process occurs. This means it is also likely to rise after the next Bitcoin halving is complete.

Mechanics of the Halving Process

There are two countdowns that keep a track of the Bitcoin halving timeline. One countdown may move faster or slower than the other because a new block is added to it after every 10 minutes, approximately.

Generally BTC halving occurs after every four years. However, due to the addition of a new block can disrupt this timeline and a more efficient way to determine about the next halving is after every 210,000 blocks.

Timeline of BTC Halving

Since the mechanics of the halving process have been established above, we can take a look at the timeline of the next Bitcoin halving.

Bitcoin was created in 2009. The block reward at the time of its creation was 50 BTC per block.

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After four years, in 2012, the first Bitcoin halving occurred, which slashed the totally supply of BTC in half and also reduced the block reward to 25 BTC per block.

The next and second halving occurred in 2016. After this, the block reward was reduced to 12.5 BTC per block.

Four years later, in 2020, the next halving occurred and caused the block reward to reduce even more, making it 6.25 BTC per block.

According to this timeline, the next Bitcoin halving is set to occur in 2024, which will bring the block reward down to 3.125 BTC per block.

Advantage of BTC Halving

One of the ways experienced traders benefit from Bitcoin halving is by accumulating BTC and hodling it until the halving process is complete.

However, it is crucial to be careful before following any kind of strategy if you are a beginner.

Conclusion!

If you are new to the crypto space then you need to know about Bitcoin halving, its mechanics and a lot more. The detailed information mentioned above can help you get a good idea of what this is all about.

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