Effects of Bitcoin Halving on Miners and Investors
Bitcoin halving is a very significant event in the blockchain network, and it is highly anticipated by every Bitcoin owner and every member in the crypto community. This last having event is considered one of the factors that prompted an incredible bullish cycle for the cryptocurrency, and at the same time, it had had an enormous effect on the block reward of the miners. In this article, we provide an overview of halving and its impact on miners and investors.
This event is programmed to happen after 210,000 blocks are added to the network, and the last halving occurred after 360,000 blocks were mined. This event was created in order to keep the blockchain network self-sufficient in terms of regulation of the inflation rate of BTC as well as the current number of BTC into circulation.
More specifically, it also halves the amount of BTC that is being generated on the network. But, the main outcome of this event is a halved block reward which by 2020 was 6.25 BTC whereas, previously, it was 12.5 BTC.
When it comes to the impact it has on the miners, it actually increases the costs related to the entire mining process because the miners already invested in equipment, time, electric energy, and they work consistently in order to gain that block reward.
So, it's another factor that has triggered the development of mining pools on farms, and it also decreases the profitability of mining for solo miners. However, the halving process is extremely important because it reduces the supply of BTC, and by doing that, the demand is on a higher level than the supply, which pushes the price of Bitcoin higher.
Bitcoin investors are in a favorable position because the value of Bitcoin tends to increase after a halving, and as we said earlier, that's due to the relationship of supply and demand. Furthermore, they can quickly obtain or sell BTC on online trading sites, even on high-quality automated trading platforms like BitQH, which has a user-friendly interface and it is available on mobile and desktop devices.
You can visit website to open an account by depositing a minimum of $250, while the platform can generate an ROI rate of up to 300% on a daily basis. In other words, you can make a profit of up to $1000.
Another advantage of Bitcoin halving for investors is that the cryptocurrency entered a long bull market phase which was only further enhanced by the support of many institutional investors, and the price of Bitcoin increased since the halving in May 2020 by over 170% by the end of the year. Actually, when famous companies started to pay attention, like Tesla, the price surpassed $60,000, particularly when Elon Musk made an investment of $1.5 billion in Bitcoin.
Another factor that makes a Bitcoin halving an even more important event is the limited number of Bitcoin tokens to 21 million by the creator of the cryptocurrency Satoshi Nakamoto. As the supply is already limited from the beginning, each halving emphasizes the scarcity of cryptocurrencies, and in the long run, this was one of the reasons why the price followed an upward trend and why Bitcoin is one of the most successful cryptocurrencies. In fact, it's one of the most valuable assets that reached a market capitalization of over $1 trillion in a very short amount of time.
So, it should be noted that the halving is an event that is tied to the block reward, and when the last Bitcoin is mined, the miners on the blockchain network will no longer have that incentive to mine they will need to rely on compensation from the transaction fees.
This will also affect the investors because they will need to pay higher transaction fees as the block reward will be absent from the mining process. In conclusion, the halving event is significant for both parties because it triggered the mining on a large scale as miners joined mining farms and got organized in mining pools. It also positively impacted the price of Bitcoin because it always has risen after a halving event.
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