In case you have been following bitcoin news during the last couple of months, then chances are that you may have heard about the upcoming halving. Well, a couple of hours ago, bitcoin has just undergone its second halving event, thus marking the evolution of bitcoin through all these years.
To put things better into perspective, people who mine bitcoin are rewarded with bitcoin in return for their hard work. Well, the bitcoin protocol is coded in such a way to reduce the supply of bitcoin by half every 210,000 blocks or so, in order to maintain the need-demand laws, but also to make sure that the total number of 21 million coins will be mined over a prolonged period of time, rather than in 3-4 years or even less. Another law set in place for this purpose of the 10-minutes interval between confirmed blocks. In case the current bitcoin protocol remains unaltered in this perspective, then the last bitcoin will likely be mined in the year of 2140.
The event is a well-anticipated change that has the potential of dictating the future of the currency, based on how it reacts to the halving event. During the last couple of months, bitcoin has seen more volatility, part of which was attributed to the upcoming halving.
Now that the reward given to miners for their work has just been halved, the price of bitcoin has surprisingly dropped by 5%. This is quite odd, considering the fact that the value was suspected to increase in order to supply a decent reward to the miners who supply both CPU power and electricity.
Prior to the halving, the reward miners would get was of 25 bitcoin, equal to roughly $16,000 USD, whereas the reward is now of 12.5 bitcoin, equal to around $8,000 USD, which is a considerably lower value. However, if the price of the digital currency does increase, then normality will set in once again for the miners.
Reports indicate that miners from all around the world have already begun filing for bankruptcy protection, in case things go south and a value increase won’t occur. This is also due to the fact that once the last halving took place in November 2012, it did not have much of an effect on the price shortly after. Instead, it took bitcoin a while before it managed to skyrocket from $15 to more than $1,000 per coin in mid-January 2013.
Based on everything that has been outlined so far, what do you personally think about the highly-anticipated halving event? Now that it has occurred, will the price stay steady, fall or skyrocket? Let us know your thoughts in the comment section below.