Bitcoin is a network that has more than 1 billion followers on its network, and it is immensely difficult to make sure that every one of them on the network can do effective Bitcoin mining, Bitcoin is implementing the concept of halving.
The concept of halving is very simple. The bitcoin network undergoes halving every time when the block distribution reaches more than 210,000 blocks or roughly around every four years. Now when the halving happens, the reward given to the miner in the form of Bitcoin is set down by half. In 2009, the system started at 50 coins mined every 10 minutes. Two halvings later, 12.5 bitcoins are currently being dispensed every 10 minutes. The upcoming halving would reduce the reward to 6.25 bitcoins.
Previous History of Bitcoin Halving- 2012 & 2016
Apparently, Bitcoin halving is not new to the community of Bitcoin as many of the Bitcoin miners are aware of the halving segment. Halving has happened for a very long time now, and it is very important to understand the history of the Bitcoin halving to make sure that the optimum choices are made with the same regard.
So the first Bitcoin halving started around 2012 after there was a huge surge in the activities of the bitcoin network, and slowly within no time, the halving was in place by reducing the mining rewards to 25 BTC. This made sure that there was absolute control over the data operation and usage of the Bitcoin community.
This was the time period when the second halving took place with the transaction rewards being reduced to as less as 12.5 BTC to make sure there was monetization. However, this halving was one of the major reasons as to why the value of the coin surged above the $2000 dollar/BTC mark.
Now in 2020:
The third halving is supposed to happen around next month, May 2020. It is predicted that the rewards will fall to 6.25 BTC, and there are a lot of arguments that are happening in and around the crypto world as we speak.
Predictions for Bitcoin’s Third Halving- What should we expect during the halving?
Now there are a lot of predictions that we need to consider when it comes to halving, and the reward per block is going to be halved into 6.25 BTC. This might be one of the mandatory things that need to be done to make sure that the data is circulated properly. You can expect a surge in the scarcity of the asset and also look forward to a bump in the price of Bitcoin.
Top 5 Predictions for Bitcoin Halving 2020
Here are some of the things that you need to consider when you are looking forward to the halving next month.
Balanced Stock to Flow ratio:
This is mainly important to consider, especially when you are looking forward to pumping the scarcity of the assets. The more balanced the stock to flow ratio, the more scarce the asset becomes. With more stability in the stock values, within no time, the value of the asset will multiply from what it is now. So this is one of the major things that you can expect with the Bitcoin Halving.
There is a high possibility that the value of the coin can go on a bull run or take a plunge, and that basically depends upon the definite arguments that will take place in the media in accordance with many of the negative news that would be spread during the halving.
Currency devaluation driving prices of Bitcoin:
Halving is mainly done to make sure that the supply of Bitcoin is maintained at a steady pace. This has also led to what is called quantitative loosening of the currency rates that compete with the pricing of Bitcoin. This is mainly because when the supply of Bitcoin is more, the value of the currency depreciates equivalently. This means that within no time, the Bitcoin prices will start affecting the value of these currencies, and within no time, this very situation will be driving the value of the currencies.
Traders shift will be more:
Traders will tend to develop an interest towards investing in Bitcoin if the price valuations run to a bullish scale. This will lead to more pressure on the network, and within no time, there will be a surge in the values of the coin and lead to higher exchange rates.
Bitcoin Inflation rate will drop:
It is predicted that by 2032 almost 99% of the Bitcoin will be mined, and the inflation rate will not be under control if the halving is not effective. So, with the halving in place, the inflation rate will drop below 2-3%.
What will be the impact of Bitcoin Halving in the price of Bitcoin & how does miner get affected from Bitcoin Halving
Bitcoin prices may increase with the probable scarcity of supply and balanced S2F rates. There is also a possibility that the pricings can be dropped down as well if investors back down with the requirements not met according to the standards. The highest probability is that it will increase the pricing of Bitcoin.
Bitcoin Miners may have to settle for rewards of 6.5 BTC per block, and the inflation rates dropping below 3%. But the most probable scenario is that it might increase over a dedicated time period.
Bitcoin proved to be a valid asset during the 2008 recessions, and it is with high confidence that it is evident that the exchange rates of Bitcoin are likely to increase to bigger price valuations after the halving.