![]() ![]() As mining rewards have halved in the past the value to USD and other fiat currencies has risen enabling miners to operate profitably and continue providing the processing power to secure the blockchain. Miners are fully aware of upcoming halvings and are able to plan ahead with their equipment purchases. “For investors with a multi-year investment horizon and a high-risk tolerance, the confluence of discounted prices, improving network fundamentals, strong relative investment activity and the upcoming halving may offer an attractive entry point into Bitcoin.” How is mining affected? So what will happen during the next halvening? Noone really knows but Greyscale associates offer this assessment. This is a chart which shows the price inflation after the previous halvening in 2016 when Bitcoin was priced at $654 USD. ![]() However halvenings are often used as an event for high volume margin trading which can cause exceptionally high volatility. Halvenings effectively cut the supply in half which over the long-term should cause a price increase. Price is determined by supply and demand on 3rd party exchanges such as Binance and Bitmex. The first halving happened in November 2012 when the initial supply was cut from 50 BTC per block to 25 BTC. All the miners use the same node software which includes a fixed schedule of diminishing mining rewards. This is coded into the distributed software known as a node. Every 210,000 blocks in the blockchain (which takes about four years 10 minutes per block) the mining reward is cut in half. Bitcoin has a limited supply of 21 million bitcoins which means that it is not possible to provide mining rewards forever. Bitcoin and other cryptocurrencies distribute their digital coins via miners who contribute processing power to the network. ![]()
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