What is a halving? When a new block of bitcoin is confirmed and added to the bitcoin blockchain ledger, the miner that confirms the block is rewarded with new bitcoin. When the bitcoin blockchain was first created, the reward was 50 new bitcoin for each block. This would also serve as an incentive for people to dedicate equipment to perform this function of the network.
Written into the software that the bitcoin network runs on is code that cuts the reward in half every four years. For example: the reward beginning in 2008 was 50 bitcoin per block. In 2012, it was cut in half to 25, in 2016 it was cut in half to 12.5, and in May of 2020, it will be cut again to 6.25 per block. This helps to control the rate of the increase in supply and to create further value of existing bitcoin. If demand grows or even remains static and the amount of new bitcoin becoming available decreases, that imbalance would create upward price pressure. As you can see from these graphs, the theory has been fairly consistent so far:
In this video, Andreas talks briefly about the effect that the halving will have on mining operations that employ many, many, many mining machines on large “farms.”
Enjoy and be well, Everyone.
More Andreas Antonopoulos videos here
I also highly recommend Andreas’ Internet of Money video series I posted in 2019, which shows the videos that comprise the chapters of the book. This book
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Categories: Andreas Antonopoulis, Education Material
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