Why halfving of Bitcoin happens?

[Brushless4500KV 4214]

Bitcoin halving happens every 4 years. This is something Satoshi has planned for bitcoin many years ago. He wanted to limit the supply of bitcoin to prevent inflation and keep the value of the coin. Without halving, unlimited bitcoins would be mined and the supply would overtake demand easily and the value of bitcoin would collapse. This not only for bitcoin. Every coin has a supply-limiting system to stabilize its value.

Edited February 22, 2020 by Brushless4500KV

[Crypto123 0]

18 hours ago, Abu talha75 said:

 Bitcoin Halving Equation every four years or at every 210000 Bitcoin blocks. what does that mean? Bitcoin comes mainly from mining and from the rewards miners get, Satoshi and his extraordinary intelligence. Think that if the reward remains large, the amount of bitcoin will increase in the world and thus its value will decrease and its price will be higher. The market is not affected by the price, but the opposite increases the price, and this is called halving. 

To fully understand this, you can read the following article

You are a new member here and you quote, copy and paste the response without adding anything new and useful, so please pay attention to yourself and write well before you get a warning point or be banned from the forum.

[Sasaki 171]

It happens because bitcoin is very volatile and it's volume is huge so halving can help to minimize it and for the price of bitcoin to increase, well some say halving is coming soon but we don't know when it is but we need to be patient for this and just wait it to happen smoothly.

[Amir YT 202]

On 11/20/2019 at 5:42 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?

I don't know which topic are you saying? I don't know the meaning of halving. But i got some analyses about your post. I think you are saying about bitcoin mining half. It's only happen every four years i think.

[Crypto123 0]

14 hours ago, Stonearif7 said:

This Cryptocurrency will rule the world. The future of crypto is very bright. Acceptance of crypto is increasing day by day. The interesting part of them are that they are not in control of any government.People will choose crypto as their currency because of its good benifits like it os more convinient than fiat. 

I also think the same thing, although this is not My topic but your words are generally correct, I am also who believe that cryptocurrencies will rule the world one day and will be accepted throughout the world and may be the main currencies.

[Raqeebzy 6456]

Halving is a blockchain event which occurs approximately every four years after 210,000 blocks have been successfully mined. Mainly satoshi aim with halving is to decrease the inflation rate of bitcoin by reducing the rewards to miners for each mined block by half.

Edited June 10, 2020 by Raqeebzy

[Crypto123 0]

6 hours ago, Precious20 said:

The great go bust of bitcoin begins, it looks like 2020 will be reasonably historic in the history of bitcoin, and I assume it will be time to approve of it under the manage for numerous years. I reflect it will be same promising. In General, in tie with come again? is the tumble of bitcoin, it is relatively strange, I don't know it is the coming out of new currencies and other things in the crypto market, from the identical China
 

I also believe that 2020 will be a historic event for bitcoin, because Halving which will happen this year will cause Bitcoin bonuses to drop significantly and if the bitcoin price does not rise then there will be a big problem.

[Francisco Cabarico 48]

from my point of view, it does so with the same purpose that governments avoid printing large amounts of money, to avoid inflation (currency devaluation)

[Crypto123 0]

5 hours ago, Emransm877 said:

Specifically, the Bitcoin protocol cuts the bitcoin block reward in half. Every time a Bitcoin halving occurs, miners begin receiving 50% fewer BTC for verifying transactions.

Yes, this is the meaning of halving, but I am not on this topic. I am not asking about the meaning of halving, but I am asking why Halving does not happen. I mean, what is the benefit and why is Halving put in the bitcoin equation by Satoshi.

[Crypto123 0]

2 hours ago, Ashik Ahmed said:

He has the amount of supply. In the early days there was a lot of bitcoin that we could get per block. However, over time bitcoin has become more popular and has begun to be used by many people around the world. Maybe this is a vision that can be seen by a satoshi nakamoto first when he created the blockchain and bitcoin.

Yes, this is a clear and accurate vision and knowledge of the fate of Bitcoin by Satoshi, who was the genius of his time. It is true in the early days there were large quantities of Bitcoin produced daily and Satoshi thought to reduce the number every four years in order to maintain price balance.

[lifelline1262 15]

Halving of bitcoin happen just to increase the lifespan of bitcoin in mining aspect, this will also increase the difficulties in Mining

[Crypto123 0]

9 hours ago, lifelline1262 said:

Halving of bitcoin happen just to increase the lifespan of bitcoin in mining aspect, this will also increase the difficulties in Mining

Halving does not increase the difficulty of mining, my dear, the difficulty of mining has to do with only the number of miners in the world, while Halving reduces mining rewards in half, and the main reason for its occurrence is in order to reduce the quantities in the market and thus increase the price of bitcoin.

[BitcryptoHan 2557]

Bitcoin halving do occur to cause reduce the supply in the market until the coins finish. This will be in 2140. Bitcoin halving is always followed by price increment which will later decrease in the next halving. 

[bliznec 22267]

Halving bitcoin is, first of all, to do so in order to increase the value of bitcoin itself and reduce the block reward, thereby increasing the value of bitcoin itself. Over time, this concept expands and makes sense. Maybe this option makes sense what is Bitcoin Halving. 

[Bohana 2143]

This happens almost every 4 years nearly and it happens when 210,000 blocks are found.

[Ayush Singh 1175]

I think due to disinvestment on the Bitcoin and due to negative price fluctuations of bitcoin it has been imposed and according to me I think that it will continue till then the price of Bitcoin gets increased. 

[Trader21 1199]

Bitcoin halving is a mystery and I don't believe it is necessary. Just my own expression regarding, maybe the greedy Roger Ver decided to fork the real BTC and make a fake Satoshi's vision.

[Mercello Blyat 21]

The reason is the protocol, which has been coded into the blockchain from the very start: Every 210,000 blocks, it performs the so-called Bitcoin “halving” or “halvening,” and producing new coins becomes more difficult — just like in gold mining where finding new deposits becomes more challenging over time.

[Captain Karim 0]

I think halving happens every 4 years, it occurs whenever a certain number of blocks are mined in the bitcoin network, in order to prevent inflation and increase the scarcity of bitcoin.

[Ionescu 115]

Halving happens every time that 210000 blocks are found (in average it takes around 4 years) and this is the explanation : a block is mined every 6 hours, 6*24*365*4 = 210000.

 

why this happens : let me quote the answer of Vitalik Buterin who said : "The main reason why this is done is to keep inflation under control"

 

 

[Crypto123 0]

17 hours ago, Jojo844 said:

The great collapse of bitcoin begins, it looks like 2020 will be quite historic in the history of bitcoin, and I think it will be time to buy it under the hold for several years. In the early days there was a lot of bitcoin that we could get per block. However, over time bitcoin has become more popular and has begun to be used by many people around the world. Perhaps there are other reasons. Maybe the price increase depends on it.

Yes, the main reason for obtaining bitcoin halving is to increase the price of bitcoin, because according to the market law that Satoshi knew well the less the quantity, the greater the demand, and with the increase in demand, the price increases, and therefore reducing the number of Bitcoin coins produced every four years is a very good thing to maintain a good price for bitcoin.

[Neymer jr 19]

In fact, I do not know enough about it.  I want to know about it.  If anyone knows about this, please tell me the reason.  Then I will know better about this reason.  Which I think would be very good for me.

[Munam 23]

I didn’t know about the halfving of bitcoin currency because of that bitcoin currency is more high itself 

[Syedbesharat 5423]

On 11/20/2019 at 7:13 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.

 

Thanks for sharing such a brief article about BTC halving and reward.I have freshen my memory for future reference .Where i can discuss this with people who don't know or have wrong information about halving.

[MrGeany 297]

it is the part of the bitcoin and bitcoin was designed to halve after several blocks have been mined. it means that the profit that goes to the miners will be cut in halve. thati simple for inflation like real money has.