Bitcoin Halving and Why it Happens?

Bitcoin Halving

After mining the block, the reward achieved by the miners is reduced in half. This reduction entirely depends upon the rate of market circulation of Bitcoins. Consider Bitcoin Halving, a method to maintain balance in inflation. This usually happens after every 4 years or when about 200,000 blocks are successfully mined. This halving of Bitcoin is predicted to happen till the year 2140. When halving is complete, miners will be paid a fee instead of a block reward, for processing transactions on the Bitcoin blockchain network. Fees will be given to miners for keeping the network alive. Bitcoin was destined with a finite supply of 21 Million coin supply. This supply is also reduced as it keeps getting released and mined. Whenever Bitcoin gets halved, its reward for miners also gets halved.

Implications of Bitcoin Halving

There are many Bitcoin halving implications because as soon as it gets halved, its supply gets reduced which becomes troublesome for investors and raising prices of other assets as well. Many predictions show that Bitcoin might lose its value till the predicted year of its final halving. Bitcoin halving works in a pattern like this:

Bitcoin Halving Pattern and flow
Bitcoin Halving Pattern and flow

This mentioned pattern shows the phenomenon of Halving. Still, even when the halving is complete, there won’t be any improvement in the fee that the miners are receiving. This concludes, to a certain extent, halving is beneficial for Bitcoin itself and the market. Despite being decentralized, it has a way to keep itself and inflation balanced.

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