Is Bitcoin the new gold? Yes, with the current market trend and price, it seems like that. After the approval of ETF, the funds inflowing into the industry showed a significant rise in value. It is also reflected in the price of Bitcoin as well as other cryptocurrencies in a positive way. Crypto holders are hitting a jackpot with one Bitcoin now valued above $52000 (As of Feb 20, 2024). Some say it is the higher price for Bitcoin in 2024, but that is not true. There is a bigger event in the industry that is on the way.
That is none other than ‘Bitcoin Halving’. If you don’t know about this term, then welcome! we got you covered. Wait, If you know some about this, we got you more information and predictions for 2024. In this blog, let's explore what Bitcoin halving is all about, its impact, and what we might see in 2024 when the next halving is due.
What is Bitcoin Halving?
Bitcoin halving is when the reward for mining new blocks is cut in half. It happens about every four years. For example, if miners get 12.5 bitcoins for mining a block, it becomes 6.25 bitcoins after halving. This makes bitcoins more rare, like gold. Bitcoin halving has been linked to prices going up because it shows that bitcoins are harder to get. It's a way to keep Bitcoin special and valuable over time.
The Impact of Bitcoin Halving:
Bitcoin halving makes a big difference in the cryptocurrency market. It affects how much Bitcoin is available, how much people want it, and how much it costs. When Bitcoin halving happens, the number of new bitcoins being made goes down. This makes Bitcoin more rare, and when something is rare, people usually want it more. So, the demand for Bitcoin goes up, and its price goes up too.
Another important thing about Bitcoin halving is how it affects people who mine Bitcoin. Mining Bitcoin takes a lot of computer power, and miners get rewarded with new bitcoins. But when Bitcoin halving happens, the reward gets cut in half, so miners get fewer bitcoins. This can make it harder for them to make a profit, especially if they're using old, slow computers.
Understanding Bitcoin Mining:
Bitcoin mining is like checking and writing down all the transactions happening with Bitcoin. It's similar to mining for gold, where people use tools to find and collect valuable metal. But instead of digging, Bitcoin miners use powerful computers to solve tricky math problems.
Whenever someone makes a Bitcoin transaction, it needs to be confirmed by the network to make sure it's real. Miners try to solve puzzles by guessing answers until they get it right. This puzzle-solving, called proof-of-work, needs lots of computer power and uses up a lot of energy.
When a miner solves a puzzle, they add the verified transaction to a block. This block then gets added to the blockchain, which is like a big book of all Bitcoin transactions. Miners get new bitcoins as a reward for their hard work, along with some fees from the people making transactions.
For example, if Alice wants to send bitcoins to Bob, her transaction has to be written down in a block and added to the blockchain. Miners rush to confirm her transaction by solving puzzles. Once it's confirmed, Bob gets the bitcoins, and the transaction can't be undone.
The History of Bitcoin Halving:
The first halving was in 2012. Before it happened, Bitcoin's price started going up slowly, reaching about $12. After the halving, the price shot up to over $1000 by the end of 2013.
The second halving was in 2016. Before that, Bitcoin's price went up from around $400 to over $650 because people were excited about the halving. After that, the price went even higher, reaching almost $20,000 by late 2017. This made history and showed that Bitcoin was becoming more important in finance.
The third halving was in 2020. Even though the world was uncertain, Bitcoin's price went up a lot after the halving, going past $10,000 in a few months. Then it went even higher, over $60,000 in early 2021. This was because more big companies were using Bitcoin and more people were accepting it. Let's point out these numbers in a table so that you can understand them easily.
What to Expect in 2024?
The Bitcoin price is already above $50,000 in this current market. So the actual predictions were even higher. The 2024 halving is expected to happen on 24 April, 23:32 UTC. Like before, people might get excited and start guessing about what will happen, which could make the price of Bitcoin go up.
But we must remember that other stuff, like how people feel about the market and new rules like some countries plan to regulate cryptocurrencies. So, while looking back at what happened before suggests that the price might go up in 2024, we have to think about all the different things that could affect Bitcoin's future.
Shedding Thoughts
In the words of Rick Falkvinge, “Bitcoin will do to banks what email did to the postal industry”. The history of Bitcoin halving shows how important it is for the cryptocurrency's path. Each time halving has happened - in 2012, 2016, and 2020 - Bitcoin's price has gone up a lot, showing how much people care about its limited supply.
With the major inflows the Bitcoin is already running towards its 2 Trillion market cap. Now, people are excited about the next halving in 2024. When it comes, Bitcoin will be harder to get, which could make it even more valuable. However, do your own research before getting into this future of money.
