Key facts about bitcoin halving (Part 1)

Bitcoin (BTC) is the main driver of the cryptocurrency market, followed by the rest of the top 100 coins in terms of capitalization. Bitcoin halving is one of the fundamental factors affecting the value of the coin. The next halving of BTC is scheduled for spring 2024. Find out how it affects the value of BTC and whether you can make money on it in this review.

What is bitcoin halving?

Halving is the process of reducing the rate of generation of new cryptocurrency units on the Proof-of-Work consensus algorithm, which occurs at a fixed periodicity embedded in the essence of the blockchain. From a miner's perspective, halving is halving the reward for mining each block. And in bitcoin, in particular, it happens automatically every 210,000 blocks attached to the blockchain, which happens on average once every 4 years.

There is an opinion that bitcoin's creator Satoshi Nakamoto laid down limited issuance and halving in order to maintain interest in it at all times. If it becomes harder to mine the coin after each halving, its value grows. This idea is controversial because Proof-of-Stake and other consensus algorithms have full issuance when the network is launched. And it has no effect on the value of the coin itself.

One of the advantages of halving is that decreasing the profitability of mining "weeds out" obsolete, inefficient farms, pushing miners to use more efficient and productive equipment.

Next bitcoin halving

The next bitcoin halving will take place tentatively in April-May 2024 (the exact date is unknown, but the date is gradually shifting towards the first few days of May). After it will be held, the rate of coin generation will be reduced, that is, the issuance rate will be reduced and the remuneration of miners will be halved. A total of 32 bitcoin halvings are planned, after which all 21 million coins will be mined.

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