Bitcoin, possibly the most known word in the world of technology right now, works in complex ways to distinct itself from fiat currencies. Fiat currencies suffer from several conventional issues which Bitcoin was designed to overcome. Unlike fiat currencies, as Bitcoin gets older and older, its prestige and value increases by many folds, and there will come a time when all the bitcoins that can ever be made, will already be made. This miraculous event is called the Bitcoin halving.
Let’s see how Bitcoin Halving works.
What is Bitcoin Halving & How does it Work ?
Bitcoin halving is one of the most crucial aspects of Bitcoin. This important event comes with leap year or you could say the halving cycle is refreshed after 4 years. The bitcoin halving takes place after 4 years and the first one was observed on 28 November 2012. This means that the creator of Bitcoin made this mechanism to ensure that unlike other fiat-currencies, BTC will have a limited supply and not unlimited. The limit was set at 21 million, and at each halving cycle, the amount of coins to be mined reduced by half. As BTC reaches its 21 million threshold, it becomes more and more valuable which saves it from inflation.
What Happened to Bitcoin after the First Halving Cycle?
The first block of the BTC, the very first one, was mined way back in January 3, 2009. The reward for mining a block back then was 50 BTC. The first halving of BTC took place on November 28, 2012. Back then, BTC was worth only $13. However, right after the first halving, the following year, price of BTC rose exponentially, and the BTC reward after the first halving was reduced to 25 BTC instead of the original 50. However, the price of BTC rose from $13 to an astonishing $1,000 in a span of a few months.
What will Happen to Bitcoin After Next Halving Cycle?
The next BTC halving cycle is scheduled to take place in April 2024, this year. Just like the previous half cycles, BTC rose tremendously, it’s expected that after this halving cycle BTC will rise again and the mining reward will be reduced to 3.25 BTC only. In just a few cycles, the 210,000 blocks would be mined and the value of Bitcoin will be much much higher as the one who holds them will have something that cannot be generated anymore.
BTC is no doubt the future of blockchain and Web 3. The first halving cycle skyrocketed BTC’s price to $1,000.The second and third halving cycle did the same. The next cycle, which is scheduled for April 2024 is expected to do the same. The total Bitcoins will be locked at 21 million. Unlike other fiat currencies, this is what gives BTC its value. Due to this BTC’s value does not immediately and abruptly collapse as a direct result of inflation. This is what BTC’s creator had in mind since the beginning.
