Halving is the event in which the block reward of some cryptocurrency is divided in half in order to reduce the level of emission. It was initially implemented with Bitcoin and from there it became one of the most important processes in the economic system. In this way, Bitcoin halving is an automated process that halves the amount of Bitcoin miners receive as a form of reward for creating a block. The purpose of its creation was to incentivize mining through Proof Of Work (POW), that is, for each certain number of blocks created, the emission must be halved.
Bitcoin pioneer in halving
Bitcoin became the first cryptocurrency to implement this process, and this was due to the fact that the amount of Bitcoins that could exist could be finite and is established at 21 million Bitcoins. This software establishes that Bitcoins will be released to reward miners, as blocks are created that validate transactions at an average of every ten (10) minutes. However, the amount of Bitcoins that are released is not always the same, which is established by the software (every certain number of blocks, must be halved). This process serves to establish a certain time until the end of the issuance of a number of coins and is carried out with the aim of pursuing a deflationary model, or in other words, gradually increasing its value.
As Bitcoin is a deflationary currency, it means that like gold, its supply becomes increasingly scarce and its extraction difficult. Halving is a mechanism created so that cryptocurrencies such as Bitcoin are not immediately distributed, to achieve this, this “escalation” mechanism was established that allows control of the issue. This issue causes new cryptocurrencies to be in circulation. It is a predictable process of initial democratization to distribute the currency that gives the opportunity to prevent them from ending in a few hands.
What if there was no Bitcoin halving that would have happened?
Without this halving process, all the proposed Bitcoins would have been mined, which is why the miners receive compensation only for the transactions made. If it hadn’t been for the halving, it would have taken a few years to put into circulation all the agreed amount of Bitcoins. From the beginning, 50 Bitcoins were distributed for each block, which represents an amount of 300 Bitcoins per hour or also 7200 Bitcoin per day, this means that the amount of 2,628,000 Bitcoins would be released annually, which when divided by the total possible Bitcoins which is set at 21,000,000 Bitcoins, would give us almost 8 years as the time it would have taken to put all Bitcoins into circulation.
The calculations are done
All the calculations of the halving have already been carried out and in this way, it is known how many Bitcoins are awarded for each block from its beginning until the last one has been extracted. Currently, he is in the third stage of the Halving of the 34 possible that will exist. It means that the last Halving will grant a zero reward, or what is the same, miners will only be able to collect the commission for the transactions that are carried out, this will occur in block 6,930,000, which according to calculations could occur in the year 2,140, so there is still plenty of time to get to that point.
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