There is no specific day for its occurrence, but it is a phenomenon “half” Bitcoin has been on the radar of the cryptocurrency world for several weeks. Between Friday and Saturday, when block number 840,000 will be mined blockchain of Bitcoin (210 thousand since the last event), and prize It will be awarded to whoever mines the most popular cryptocurrency in the world Reduced by half. It will rise from 6.25 to 3.125 bitcoins per block.
In simple terms, mining involves solving complex and frequently changing cryptographic problems to create a block. It is a process that involves competition between those doing the mining to solve the problem before their competitors. Only when the network verifies the integrity of that block is the reward awarded. In Bitcoin's early years, it was generous, about 50 bitcoins, to encourage adoption.
The phenomenon “half” Programmed and is part of the characteristics of cryptocurrency: appears in “White papers” It was launched in 2009 by Satoshi Nakamoto, who is believed to be the creator of the cryptocurrency, but whose identity has never been confirmed. Therefore, it is expected that the reward to be awarded will be gradually reduced every four years until the maximum value of 21 million Bitcoins is mined, which should happen in the year 2140. Currently, it has already been mined. About 19 million bitcoins.
“It is a mechanism designed by the creator of Bitcoin with the aim, initially, When network adoption was low, reward miners by issuing more coins.”“, explains to observer Hugo Fols Oliveira, secretary of the New Economic Institute and spokesperson for the Federation of Cryptoeconomics Associations (FACE). As the network expands, “the assessment was that the value attributed by the market to the coin would rise and that it would not make sense to give miners the same reward,” Thus reducing the incentive, therefore, there will be fewer producers and less currency produced.
In other years, “half” It has become a source of excitement in the world of digital currencies due to the significant rise in the value of Bitcoin. In theory, if there are fewer cryptocurrencies being mined, and the supply is lower, the price will rise to meet demand. Folz-Oliveira realizes that, simply put, “People tend to mention supply cuts as something that could be good for the price.But “in the last two cycles, there was no positive price assessment immediately, and it did not arrive until 6 to 18 months later.”“Half”.
When did the previous cuts occur and what was the price reaction?
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Hey “half” It happens every time an additional 210,000 blocks are mined in blockchain of Bitcoin, equivalent to four-year periods. Why are there 210 thousand? That's an estimated production of six pieces per hour, which amounts to 144 pieces per day, 52,000 pieces per year, and, after all, 210,000 pieces over four years.
the first “half” This happened on November 28, 2012, when the reward was reduced from 50 to 25 bitcoins obtained per block. Over the next six months, the price of Bitcoin rose from $12.4 to $132 (data Investment.com).
About four years later, on July 9, 2016, a new reduction took place, this time from 25 to 12.5 bitcoins per block. And another increase in value from $662.8 to $827 within six months.
On May 11, 2020, the new cut reduced the reward from 12.5 to 6.25 BTC per block. At that time, Bitcoin rose from $8,579.8 to $15,695 within six months.
the new “half” It will make the reward lower, which will be 3,125 BTC per block.
The next scheduled event is expected to take place in 2028, which reduces the reward by half again (1.5625).
Henrique Tomé, an analyst at XTB, points out that this phenomenon “directly affects the supply of Bitcoin on the market, which may affect its price in the long term.” So far, he says, the behavior of this encrypted item is “in line with the last three.”Half“”. It is expected that the price of Bitcoin, which exceeded $63,000, will remain “stable, and then it will likely rise again, as happened in previous sessions.”
Hugo Fols-Oliveira, of the New Economic Institute, admits that it is natural for people to expect “that reducing supply could be good for the price.” But as Bitcoin matures, the reduction “It will also have less impact.” On the market, he thinks.
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