Why halfving of Bitcoin happens?

[andrehol 16294]

Half means a reduction in block mining rewards. In fact, this will primarily affect miners. It will become more difficult to mine bitcoin, which means its price will increase.

[Crypto123 0]

8 hours ago, Wish107.5 said:

I read in some article that duration of bitcoin halving is every 3 years so thi bitcoin halving will happen again in 2023 after bitcoin halving ends in 2020

No man, it is correct every 4 years and precisely every 210,000 blocks, meaning that all of this bit of Bitcoin blocks has been mined, the Bitcoin must Halving according to the custom set by Satoshi. This number is equivalent to approximately 4 years if we consider that the average rate for finding a single block is approximately 10 minutes

[Afrizal rahman 2636]

Yes bitcoin is divided into two durations. why is it duration, I also do not understand this. we must find out more about this.

[fuer44 1083]

On 11/20/2019 at 9:13 PM, kyoukage01 said:

You can read all about the "whys" and "hows" of Bitcoin halving in this article:

https://blockonomi.com/bitcoin-halving/

If you do not want to bother yourself clicking on the link, here is the full article:

  Reveal hidden contents

What is Bitcoin Halving? Complete Guide to this Mining Change

Every four years or so, bitcoin undergoes an important event known as the “bitcoin halving”. This first happened in 2012, and again in 2016. Likewise, it will happen again sometime in 2020 and 2024. What is the bitcoin halving? What impacts does it have on the economics of bitcoin? In this article, we’re going to go over what the bitcoin halving is, and why it’s so important to bitcoin.

Understanding Bitcoin Mining Rewards

Each day, many untold thousand watts of electricity are committed towards bitcoin mining. People mine bitcoin because they hope to earn bitcoin, which has value and can be bought and sold in various markets.

Without going into too much detail, mining is the process by which the network is secured and transactions are processed. In order to encourage people to mine bitcoin (or other cryptocurrencies that also use proof of work mining), each block contains a reward. That reward is released to the miner that successfully solves the block. This reward needs to be high enough so as to be a strong incentive. But the reward also cannot be too much. A large reward would cause an oversupply and lower the value of the currency.

What is the Bitcoin Halving?

When Satoshi Nakamoto created bitcoin, he wanted to create a system that would be self-sustaining and that would in some ways emulate gold-mining. That being, over time, mining would become more difficult and the rewards collected would slowly reduce so as to control the supply. Specifically, Nakamoto writes:

“The steady addition of a constant of amount of new coins is analogous to gold miners expending resources to add gold to circulation. In our case, it is CPU time and electricity that is expended.”

Nakamoto’s solution to this problem is to institute a bitcoin halving system. Here’s how it works. When bitcoin started, the block reward was a whopping 50 bitcoin every 10 minutes. The bitcoin code includes a statement which says that after every 210,000 blocks (or about four years, given 10 minutes per block) this reward should drop by half. Following the last two bitcoin halvings, the current block reward is now 12.5 bitcoin. In the year 2020, it will be 6.25, and so on.

 

In this way, the bitcoin halving has a number of important effects on the network.

 

First, it extends the life of the reward system. If we were still releasing 50 bitcoin every 10 minutes, then we would reach the maximum supply cap of 21 million bitcoin rather quickly. In fact, mining rewards would cease in about 8 years. Reducing the reward rate over time slowly means that there will be a longer period of time in which mining results in receiving a block reward.

 

Secondly, bitcoin halving helps bitcoin see steady price increases over time. This is because the number of new bitcoin that appear each year will be decreasing. This limited supply causes bitcoin prices to increase, as their scarcity also increases proportionally.

 

Finally, the bitcoin halving increases the cost of mining each individual bitcoin. As the network difficulty increases over time, and the reward rate drops, the actual cost of mining each bitcoin increases, which then causes the trading price of each bitcoin to increase as well.

The Day the Mining Stops

With this in mind, this leads us to a logical question. What happens when the bitcoin reward drops to zero? Will everyone simultaneously stop mining bitcoin, causing the network to come to a complete stop?

 

To address this concern, we have to consider a few different things.

 

First, at the current mining rate and factoring in for future bitcoin halving events, it is estimated that the final block containing bitcoin will be mined sometime in the year 2140. Considering that the network started operation in 2009, this means that the network will have a total of about 130 years before this event occurs. By that time, the economic conditions of cryptocurrency could be so fundamentally different that the need for a block reward may not even exist.

 

The second thing to consider is that bitcoin miners have a secondary source of income aside from the block reward. Specifically, miners also earned transaction fees. Each day, many hundreds or even thousands of bitcoin are paid in transaction fees (depending on network conditions). So by the time 2140 rolls around, it is entirely possible that mining purely for transaction fees could be profitable enough for miners to continue mining indefinitely, regardless of their being no block reward anymore. In his widely reviewed white paper, Nakamote describes it like this:

“Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.”

Another point to consider is the release of new projects that plan to coexist alongside the bitcoin blockchain. One example of this is the RSK platform. RSK is a smart contract platform that is intended to run on top of the bitcoin network. It will allow for smart contract and decentralized application execution while making use of the bitcoin blockchain itself. It is intended to be a competitor to Ethereum.

 

One of the selling points of RSK is that miners who choose to participate in processing root stock transactions can do so while at the same time mining bitcoin as normal, with nearly no loss of efficiency. This means that in the distant future, miners could not only earn transaction fees from the bitcoin network itself, but they could also potentially earn transaction fees from these additional layer networks that may exist on top of the bitcoin network, such as RSK.

Conclusion

With all that in mind, let’s go over what the bitcoin halving really means for bitcoin. First and foremost, it’s a means of controlling the amount of new bitcoin that hits the markets each day. It’s intended as a way to prevent hyperinflation from ever occurring.

 

If we look at countries that experienced hyperinflation, one thing that often happened is the rampant and uncontrolled printing of new money. Each time a country prints more money, it is reducing the value of each individual of currency already in circulation. The bitcoin halving makes sure that not only will the rampant production of new but coins never happen, but in fact, it is mathematically required that the reverse should occur.

 

The bitcoin halving was also intended to emulate gold-mining, as gold-mining inevitably becomes more expensive and difficult over time, as more and more of the Earth’s gold reserves are mined out. Not only does it get more expensive, but less than mask new gold enters the gold marketplace each year. This is led to a predictable and steady rise in gold prices over the last century.

 

Since the launch of bitcoin, many other altcoins Liberland proof-of-work mining have their own implementations of bitcoin halving. For example, Vertcoin recently underwent its own halving event, as did Ethereum Classic, which dropped its reward from 5 to 4. While other cryptocurrencies like Ethereum don’t have quite the same model of supply reduction, they do employ their own methods of ensuring that the amount of new tokens hitting the market each year is slowly on the decline.

 

Finally, the bitcoin halving keeps bitcoin prices steadily moving upward over long periods of time. If it were not for the bitcoin halving, bitcoin today might only be worth 50 or hundred dollars each instead of the thousands that it’s worth now.

That article covers most of the aspects of the Bitcoin halving. There are quite a lot more of them from the Web where they came from. Enjoy reading.

 

very helpful once this article friend, but I do not quite understand 100%. what I catch here is, in essence, to anticipate the supply that will be less and prices that are not controlled, this bitcoin halving was made. its that true?

[kyoukage01 3181]

32 minutes ago, fuer44 said:

very helpful once this article friend, but I do not quite understand 100%. what I catch here is, in essence, to anticipate the supply that will be less and prices that are not controlled, this bitcoin halving was made. its that true?

I do not fully get your question, but I will try to answer.

 

Bitcoin halving was implemented for a number of reasons, as stated in the article.

 

Since Bitcoins have a total fixed amount (around 21 million), to prevent the remaining unmined Bitcoins from getting depleted too quickly, we have Bitcoin halving. The rewards get smaller after each halving, and here is what is not included in the article: the calculations required to unlock (mine) each Bitcoin block becomes more difficult, thus requiring more sophisticated computers and/or more energy consumption. The supply of new Bitcoins to enter circulation becomes smaller as a result.

 

As for the Bitcoin price, this is one of the advantages (or disadvantage, depending on how you put it) of it being decentralized (under nobody's control): the price of Bitcoins depends entirely on "the law of supply and demand", in other words, the market sets the price. As Bitcoins' demand increases while the supply decreases due to the halving, the price of Bitcoins will increase in accordance with the law I mentioned. This is the primary reason why almost everyone predicts that there will be a bull run (price increase spike) somewhere in 2020: this year coincides with the next Bitcoin halving event.

 

I cannot answer anymore since I am a newbie at crypto myself. My primitive monkey brain might burn out. Let's see if there is anyone else who will answer for you.

 

Edited December 8, 2019 by kyoukage01

[fuer44 1083]

22 minutes ago, kyoukage01 said:

I do not fully get your question, but I will try to answer.

 

Bitcoin halving was implemented for a number of reasons, as stated in the article.

 

Since Bitcoins have a total fixed amount (around 21 million), to prevent the remaining unmined Bitcoins from getting depleted too quickly, we have Bitcoin halving. The rewards get smaller after each halving, and here is what is not included in the article: the calculations required to unlock (mine) each Bitcoin block becomes more difficult, thus requiring more sophisticated computers and/or more energy consumption. The supply of new Bitcoins to enter circulation becomes smaller as a result.

 

As for the Bitcoin price, this is one of the advantages (or disadvantage, depending on how you put it) of it being decentralized (under nobody's control): the price of Bitcoins depends entirely on "the law of supply and demand", in other words, the market sets the price. As Bitcoins' demand increases while the supply decreases due to the halving, the price of Bitcoins will increase in accordance with the law I mentioned. This is the primary reason why almost everyone predicts that there will be a bull run (price increase spike) somewhere in 2020: this year coincides with the next Bitcoin halving event.

 

I cannot answer anymore since I am a newbie at crypto myself. My primitive monkey brain might burn out. Let's see if there is anyone else who will answer for you.

 

yes yes friend thank you, at least I have got a logical answer from you. when the supply has started to thin out, then there is the halcoin halving. although the explanation is a bit complicated, but it's logical and acceptable.

[khan22 3478]

Halving is so much important for the BItcoin because if the halving is not making bitcoin peoples will not believe on it and i hope BTC will do this regularly because it shows the BTC value is high. BTC is the best coin in the crtypto market and it will go up soon more and touch the 52,000$ soon.

[Agios 1763]

Why does Bitcoin halving happen? Because the block reward will be half, which will occur every 210,000 blocks. Bitcoin halving will occur if half of Bitcoin supply is in circulation. Halving will be repeated when the remaining half of the supply of coins is in circulation, and continues to be like that within a period of 4 years according to the code. Bitcoin halving will occur in May 2020, the amount of reward is 12.5 BTC after halving will be reduced to 6.25 BTC.

[Interface User 1070]

Because of halving in minimize the inflation control of the coins by decreasing its coin supply. The excess coin was sent I think to unknown wallet to not access by everyone.

[Crypto123 0]

5 hours ago, Interface User said:

Because of halving in minimize the inflation control of the coins by decreasing its coin supply. The excess coin was sent I think to unknown wallet to not access by everyone.

Yes, this is correct. Reducing the number of productive currencies necessarily leads to a rise in their price. In any case, we are now in 2020 and only a few months remain for the occurrence of half and we will see the practical application of this theory.

[Akbor 1042]

I think halving process is done after every 4 years but it is not any exact period but I cant say why it happens. you will get some article about it to read.

[el-Muhammady 718]

i don't tell just so why halving did it. But as a consequence of halving, bitcoin will be mined additional than without halving. conceivably in attendance are other reasons. perhaps the set a price spread depends on it. Bitcoin is just unique on both side
 

[Syed Rehan 231]

Halving of bitcoin is important because it used to doubled the amount of bitcoin.Because the demand of bitcoin increases so halving of bitcoin is important. Because of halving price of bitcoin also increases.

[Crypto123 0]

48 minutes ago, AliceJun said:

Scarcity is one of the special things about Bitcoin, which is why the price of this coin is always so high and so popular. The halving takes place by the end of 2019 and early 2020. This is called a halving to exist and at the same time for Bitcoin to become more valuable over time due to limited supply,

Yes, right, this is precisely Satoshi's goal of making half the bitcoin mining happen every four years because this reduces the amount of bitcoin offered on the market and this will necessarily lead to a rise in its price.

[Ahmedabdallah12 169]

It was planned since satoshi nakamoto made it that after minning an exact number of blocks the minning amount should be reduced to half

[Crypto123 0]

On 1/9/2020 at 1:37 PM, Goodcoin said:

There are only 21 million bitcoin.

You mine them and less than 3 million left.

It take a decade to mine over 17,000,000 bitcoin.

It will take a century and some years before the remain in 3 million would be mined. 2140 precisely. 

Halving makes regulate bitcoin supply. And halving occur every 4 years. 

 

Yes, the largest portion of Bitcoin has been mined during these ten years of Bitcoin's life and half makes this period lengthen every time so that this remaining amount will take about a hundred years or more until it is completely mined and thus Bitcoin's life is preserved for a long time.

[Ali_hmwi 966]

Every move from bitcoin or the halving for reason the members told you why.

but don't worry nothing is going to be wrong no body will try to destroy his work like this. every thing is good.

[BTC Future 3946]

Halving means that production of new coins is cut by half. Somehow people wrongly claim that it reduces supply. In fact it reduces selling pressure but not total supply which is fixed. There are patterns that are saying bitcoin will reach a million dollar and are involving the halving has to do with this.

Actually we already know that Bitcoin has finite supply of 21million coins so this argument is illogical.

What we are seeing is speculation torwards an event. This is usual with Bitcoin as we are left of hodlers and speculators lately, instead of actual users.

[Razan alikac 1899]

Good question and I do not have any information on the subject Thank you my friend for the good question and thank you for the forum that gives us the opportunity to learn

[Sapdrx 469]

38 minutes ago, BTC Future said:

Halving means that production of new coins is cut by half. Somehow people wrongly claim that it reduces supply. In fact it reduces selling pressure but not total supply which is fixed. There are patterns that are saying bitcoin will reach a million dollar and are involving the halving has to do with this.

Actually we already know that Bitcoin has finite supply of 21million coins so this argument is illogical.

What we are seeing is speculation torwards an event. This is usual with Bitcoin as we are left of hodlers and speculators lately, instead of actual users.

But the question still remains why. Maybe to make sure that the price has to increase or maybe because computers are able to calculate faster and faster ? I still don't know.

[McCree 713]

On 11/20/2019 at 1:42 PM, Crypto123 said:

I want to ask members here why halving of bitcoin happens?
And how long will this happen? I mean the duration between each halving
Why did Satoshi make this division within the Bitcoin configuration algorithm? What's the point and what's the benefit from Halving?

To prevent inflation.

 

The halving mechanism was invented to limit the supply of bitcoin that is created when a node mines a full block. By slowly decreasing the reward, smaller amounts of bitcoin are put into circulation until a time comes when no new bitcoin is put into the system. If bitcoin was created infinitely then there would be rampant amounts of inflation just like paper money.

[Lubruselu 2803]

I really actually don't know how the bitcoin halving can be happened, but I always see only when people discuss that's when the next halving will happen

[Crypto123 0]

16 hours ago, BTC Future said:

Halving means that production of new coins is cut by half. Somehow people wrongly claim that it reduces supply. In fact it reduces selling pressure but not total supply which is fixed. There are patterns that are saying bitcoin will reach a million dollar and are involving the halving has to do with this.

Actually we already know that Bitcoin has finite supply of 21million coins so this argument is illogical.

What we are seeing is speculation torwards an event. This is usual with Bitcoin as we are left of hodlers and speculators lately, instead of actual users.

Thank you, dear, it seems from your words that you are an expert in this field, your words are accurate and full of important information, in fact I saw a lot of comments here on this topic but they did not provide a good explanation or new information about the topic. But I like your comment . Thanks again.

[Crypto123 0]

On 1/24/2020 at 6:06 AM, Angel Medina said:

Bitcoin has been since its inception in as much popularity as in its price. At first Bitcoin represented an ideology and therefore it was adopted by the cyberpunk movement. Only a few people used this digital currency, but today it has evolved having thousands of businesses built based on the leading cryptocurrency. Each year represents a step forward, 2017 was the year of the ICOs, 2018 the year of the Bitcoin ETFs and 2019 the year of the Lightning Network and the creation of state cryptocurrency projects. What will the year 2020 hold for us? Bitcoin halving is the event of the year. Halving will take place in May 2020, the event in which Bitcoin block rewards for miners will be halved, from 12.5 to 6.25 Bitcoin. This is a key aspect for the Bitcoin bulls by 2020. The community is very hopeful that halving will push the price up, to levels higher than the previous high of $ 20,000.

Thank you for this interesting historical presentation. In fact, you have provided a good analysis and a brief presentation of the most important events that Bitcoin has gone through during the past years, as well as the important event expected these years and expectations of a significant rise. Thank you deserve like.

[Rickso 768]

On 11/20/2019 at 12:42 PM, Crypto123 said:

I want to ask members here why halving of bitcoin happens?
And how long will this happen? I mean the duration between each halving
Why did Satoshi make this division within the Bitcoin configuration algorithm? What's the point and what's the benefit from Halving?

halving is needed because bitcoin has a limited number of bitcoin that can be mined, 21 millions, so this is done to control the supply.

 

bitcoin block rewards are halved every 210000 block, so more or less about every 4 years