Bitcoin halving

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Overview:

The cryptocurrency community is gearing up for the upcoming Bitcoin halving event, which is likely to be held this weekend.

About Bitcoin halving 

  • The halving refers to an alteration in the foundational blockchain technology of Bitcoin, aimed at decreasing the pace of generating new bitcoins.
  • Since its creation by the pseudonymous figure Satoshi Nakamoto, Bitcoin has been structured to possess a finite supply of 21 million tokens.
  • The process of halving will persist until 2041, by which time all Bitcoins will have been mined.

How does it happen?

  • Blockchain technology involves creating records of information - called 'blocks' - which are added to the chain in a process called 'mining'.
  • Miners use computing power to solve complex mathematical puzzles to build the blockchain and earn rewards in the form of new bitcoin.
  • The blockchain is designed so that a halving occurs every time 210,000 blocks are added to the chain, roughly every four years.
  • At the halving, the amount of bitcoin available as rewards for miners is cut in half. This makes mining less profitable and slows the production of new bitcoins.

Impact the Crypto market

  • Experts say that the halving event might impact Bitcoin's price as its heightened scarcity could result in upward pressure on prices and attract a wave of new investors to the cryptocurrency market.

Q1: What is Cryptocurrency?

Cryptocurrencies are digital or virtual currencies in which encryption techniques are used to regulate the generation of their units and verify the transfer of funds. These currencies operate independently of a central bank.

Source: Explained | Bitcoin's 'halving': what is it and does it matter?