What is bitcoin halting or how to become a millionaire in a day

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Bitcoin halting is one of the most important developments in the cryptocurrency market

What is bitcoin halting or how do you become a millionaire in a day

Since the last century, the Olympic Games have been continuously shaking the world every four years. But recently, in the financial sector, a personal source of shocks has appeared – a phenomenon that replaces the cryptocurrency exchange once in four years. This is, of course, about bitcoin halting.

Halling in itself is a wonderful financial phenomenon, designed to protect the cryptocurrency ecosystem from multiple inflation. Holting is a deliberate, half-done reduction in the mining reward. This unique mechanism will virtually protect against bitcoin shortages.

Satoshi Nakamoto, the creator of the cryptocurrency, decided to periodically remove bitcoin mining, putting the process in BTC code. Bitcoin halting occurs in every 210 thousand blocks, which is approximately equal to the duration of every four years.

The first was held in November 2012 – the results were surprising. As soon as the reward for mining fell, the price of bitcoin rose at an incredible pace. The reorganization of BTC losses also takes a certain time each time during which the price of cryptocurrency increases. For example, in 2016, the value of bitcoin set a historical record of only $ 19,842 after $ 1.5.

The upcoming halt will be the third in a row and is forecasted on May 12, 2020 – the bitcoin signal block, a block under the number 630 thousand, should be mined on this day. From this moment, the payment for mining will be reduced from 12.5 BTC per block to 6.25 BTC. In anticipation of halting, prices for bitcoin have already started to rise significantly – only in the last month has the BTC cost increased by $ 4 thousand. In return, the lowest price is about 459 days before halving.

Forecasts and concerns

Despite the apparent trend of price increases after a halt, experts’ opinions on the forecast are strikingly different. Well-known cryptocurrency Planby believes that halting will make bitcoin ten times more expensive, but venture capitalist Tim Draper suggests that we can already talk about $ 250 thousand for BTC in 2022.

What is bitcoin halting or how do you become a millionaire in a day

Morgan Creek Digital co-founder Jason Williams remembers the delayed impact of halting and predicts a price increase only six months later. Some analysts make an even less positive assumption – Anthony Trensheva, co-founder of the Nexo crypto platform, expects Bitcoin’s cost to increase by $ 50,000 by the end of 2020. There is also concern in the industry that many miners may abandon the cryptocurrency mining process that is not profitable once it is halved.

The truth is that no one can, in fact, accurately predict the consequences of another halt. There are many influential factors in the system, for example, you should not miss the fact that 30% of bitcoins have already been lost. After the first stop, the price of bitcoin went from $ 10 to $ 1,000, but after the second it was already around $ 20,000 per coin.

Also, cryptocurrency prices are, as you know, quite volatile, and often very difficult to clarify for them, and even more clearly predict growth. Surprisingly, investment in cryptocurrency often rests on a bare belief in the integrity of the system, creating real demand and a price spurt. By 2140 the periodic pause would be valid and it is impossible to say that the process would be the same every time.

Nevertheless, the mechanism of operation of bitcoin includes such insurance against unsuccessful stagnation – if the process does not increase demand and price, then the process of changing the complexity required to obtain rewards for mining will be initiated. The complexity of mining will decrease to excite miners, meaning that bitcoins issued as a reward will become more accessible.

Read: LSD or Pizza: what they actually buy for cryptocurrency and why everyone considers it illegal.


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