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Bitcoin Halvening

Bitcoin Halvening Pic

Bitcoin Halvening

Have you heard about the Bitcoin Halvening or Halving? No! Where have you been? Under a rock! Bitcoin mining isn’t that type of mining, you won’t find it under rocks and soon there will be less of it to be found/mined. Yep that’s right, the ‘reward’ for Bitcoin mining ie Bitcoin is about to undergo a halving event that means there will be half the amount of Bitcoin available for the same amount of ‘work’.

It’s literally days away and this will be my first one so I’m quite excited to see what happens to my own wee Bitcoin stash – will it go up, will it go down, phew – I’m more Satoshi Small Fry than Bitcoin Whale but I’m still on the rollercoaster and cannae wait to see what goes on!

Bitcoin Rollercoaster Pic

 

 

Bitcoin Halvening is what now?

Unless you really have been under a rock you must have at least heard of Bitcoin by now, you may be aware that Bitcoin is a decentralised, peer to peer crypto currency that is mined by specialist mining equipment called an ASIC (Application-Specific Integrated Circuit) miner but you may not know how it all works, you can read about it here. In a nutshell, the ASIC miners are powerful, juice hungry computers that people use to race against each other to solve an extremely complex mathematical problem and the first that gets the correct result gets to add that block of data to the Bitcoin Blockchain – a process called ‘proof of work’ the reward for which is currently 12.5 Bitcoins.

This process happens roughly every 10 mins, according to a mathematical protocol that has been put into Bitcoin’s programming. The same protocol also halves the reward every 210,000 blocks which is 4 years or so, meaning there is still a new block produced every 10 mins but the reward will go down to 6.25 Bitcoins. For some miners, particularly those running solo operations, this will prove unprofitable at least in the short term because they have costs associated with Bitcoin mining including huge power bills, mining equipment, cooling equipment etc which might not be covered by the reduced return – a lot of miners immediately sell their Bitcoin ‘reward’ to cover their costs.

What’s Going To Happen? Mining Rig Pic

Some solo miners might have to temporarily shut down their operations, especially those in countries where power is expensive.  Bitcoin may go down in value prior to the halvening, this has happened historically but then it has gone back up a few months after so hopefully that will be the case this time too.  Speculation is rife in the ‘crypto space’ with experts and enthusiasts falling over themselves with predictions, previous info that proves Bitcoin is going this way or that.

The Altcoin shills are out in force on Twitter each claiming their coin or token is the next big thing – I’m still betting on Scotcoin for the win – check out my latest article about Scotcoin V3* featuring my first ever podcast interview with CEO Temple Melville (thank you so much Caroline Wylie  for making that happen) – going on the evidence of my wallet balance and ‘proof of work’ shown by The Scotcoin Project CIC that has ensured that Scotcoin continues to rise in value whilst effecting real change in the community.


The Coronavirus Effect 

Alexa, homeschool the children.

I trade Bitcoin and other Altcoins on eToro  (an online trading platform I’ll be reviewing soon) where the crypto markets are open 24/7. There you can watch Bitcoin’s rollercoaster play out in real time and read the opinions of other traders as they speculate wildly on the Newsfeed about Bitcoin’s movements sometimes hourly. Charts abound showing previous ATH’s and ATL’s with graphs ‘proving’ what’s going to happen based on what has gone before which even this noob knows isn’t the most reliable of strategies but if you don’t know anything about anything could have you fooled.

As you are probably aware the stock market crashed in these past few weeks (beginning 20 February 2020) mainly due to what I’m calling the Coronavirus Effect – unemployment has risen to staggering levels, the world is on Lockdown, the death toll and infection rate continues to rise here in the UK and the rest of the world (except Antarctica), the world’s economy has gone into free fall, governments globally are printing money daily (known as quantitative easing) $2 Trillion in US alone, bailing out failing businesses, fortunes are being made and lost – Virgin Australia (Richard Branson’s airline) has gone into administration, Warren Buffet has jettisoned ALL his airline stock, Oil prices turned negative for the first time in history and Jeff Bezos, CEO of Amazon has had 26% higher sales than this time last year (net sales 75.4 billion in the 1st quarter that’s a mind boggling 33 mil an hour!)


Bitcoin’s Raison D’etre

Of course the big difference between this stock market crash and others (including Sept 29 2008 which previously saw the biggest point drop in history) is Bitcoin. Bitcoin’s raison d’etre – the 2008 financial crisis, after which it was created as a safe haven and store of value – taught the financial world some hard lessons number one being that the stock market is not recession proof. Bitcoin was created in response to the need for a currency that was inflation proof and could be controlled by people themselves without having to rely on companies, governments or banks.

Which brings us back to ……

Bitcoin Halvening/Halving 

Bitcoin halvening pic

Bitcoin halvening/halving whatever you choose to call it is the opposite of ‘quantitative easing’ in that cutting the supply of Bitcoin will ensure the scarcity of it at the same time as preventing extreme price inflation.  What that does to the price remains to be seen, however. Most are expecting the price to go up in line with the law of supply and demand but there are naysayers out there too and still others whose opinion seems to fluctuate in line with Bitcoin. Two articles a month apart by the same author, Sam Bourgi, alternately labelled Bitcoin no safe haven and the best performing asset of 2020 at CCN.

When Bitcoin was first created the reward for mining was 50 Bitcoin, the first halving in November 2012 saw that amount reduced to 25 Bitcoin and an increase in price from $11 to $1,000 followed about a year later. The second halving took place in July 2016 followed a year later by an increase in price from $700 to $20,000 it’s then ATH. It has been suggested that these results are evidence that we can expect more of the same but equally it has been implied that the halving is already priced in, that miners prepare for it at least 12 months in advance and Bitcoin could crash – time will tell.

So what do YOU think is going to happen? Please comment below with your thoughts, questions and experiences, I’d love to hear from you.

Please note the highlighted words are either affiliate links (from which I will benefit in some way if you sign up or make a purchase at no extra cost to you) or links to external sites, other articles on this site and Caroline’s email in case you need a virtual assistant, I’m recommending her please mention you found her on this site – TIA PurpleLioness

*when I post that article this will become a link to it

PurpleLioness

12 Comments

  1. Hie 

    I have been schooled here for sure. I really do not know much about cryptocurrencies but only that they exist and are quite worth a lot. It is good for you to share the behaviors and traits that these currencies exhibit.

    I just want to know if this process of halving also happens to other cryptocurrencies and does it have the same effect that it has with Bitcoin ? 

    Great content man thank you.

    • Hiya Gyvinek

      Thanks for replying and your great question. I had to look up the answer because I didn’t know! There’s not much info out there but I did find mention that Bitcoin Cash (BCH) a blockchain that forked off Bitcoin in 2017 had a halving event on 8th April from 12.5 to 6.25. and another fork BSV had its halving event the day before https://cointelegraph.com/news… This is the link to BCH halving info if you want to have a look, it’s quite interesting but I didn’t understand enough of it to break it down here, sorry. The pic alone is worth a look at Coin Telegraph where you can read about the BSV halving event. https://cointelegraph.com/news…btw I know these links look the same but they are to 2 different articles on the same website.

      To address your second question, again I don’t really know as this is my first halvening and no one really knows what’s going to happen but I will come back and update after so I’d be happy to let you know what went on.

      Thanks for your interest 

      KRs

      PurpleLioness 

  2. I just learned about the halving part of Bitcoin. I had no idea they did that and it makes sense that it would stay in line with the laws of supply and demand. I don’t day trade bitcoin, just hold it for the long haul as all these banks just keep printing money not really back by anything. 

    I trade day trade forex and I am starting to learn more about the crypto side little by little. Great article, thank you. 

    • Hiya Duni

      Thanks for replying and your kind words, I’m scared of the money printer so imma keep hodling! Your job sounds very interesting I’ve only just dipped a toe into trading, there’s so much to learn but I’m enjoying the journey and trying to be careful.

      I woke up one day last month to find my investments had tanked during the stock market crash so that was a learning curve but thanks to my poverty I didn’t lose much because there wasn’t much to lose!

      Feel free to read my other articles and follow my journey, I will be writing one about my trading experiences soon, I hope you’ll come back for that.

      KRs 

      PurpleLioness 

  3. I have a rough idea about how Bitcoin and the mining side of it works, but wasn’t aware of this halvening business. I can imagine how stressed out some ASIC owners must be with the uncertainty of it all, but if it happens roughly every four years then I guess these miners should be prepared for it. If Bitcoin loses its value after this, what other Cryptocurrency would you suggest looking into?

    • Hiya JT

      Thank you for your reply, I hope that most solo ASIC operators have priced the halving into their budgets as they have had a 4 year heads up! I don’t believe Bitcoin will go to zero but I also have invested in Scotcoin which you can read about here  https://cryptolioness.com/the-…  I also hear good things about Ethereum and Litecoin. Do your research and try to find a cryptocurrency with a use case. I will be writing an article soon about what a use case is and why it matters, feel free to come back for that.

      Thank you for your interest 

      KRs

      PurpleLioness 

  4. Actually I heard bitcoin 3 or 4 years before  and many of my friends invested on that project…some of them  benefited from that but others failed…I also put some cash on that and invested but I really dont know what happened because they told me that my money earned something but its hard to get cash from it because everybody is also doing what im doing ,they also want to convert it to cash. Can you tell me what happened?

    • Hiya Laertes

      First of all thank you for going into work and helping to keep people alive and stay healthy. I’m sorry I don’t know anything about your investments so I couldn’t tell you what might have happened. I’m sorry to hear that you and your friends lost money.

      If you have your Bitcoin in a wallet and you have the private key then your money should be safe depending on what type of wallet you are using. If you have a large amount consider a cold wallet. Please read my article https://cryptolioness.com/lets…it’s one of my first so it’s not brilliant but the info is there.

      Thank you for your interest, good luck with your investments.

      KRs

      PurpleLioness 

  5. Helooo deardear, thanks for sharing these information with us, I was doing some research online when I saw your post about Bitcoin Halvening, I say something about Bitcoin Halvening but wasn’t sure how to go about it, but after going through your article I believe I have been enlightened more,your contents are of great quality,thanks for the info

    • Hiya Skuchmane

      Thanks for stopping by, it’s great to hear you got some value from my article. I hope you know more about Bitcoin Halvening now and can make an informed choice about whether to invest or not if you haven’t already. Well done for doing your research first. See you on the other side.

      KRs

      PurpleLioness

  6. Hey nice article you have there. Thanks for sharing such an invaluable article to Bitcoin traders. Bitcoin tends to drop before and after a block-reward halving in the short term. event that halves the rate at which new Bitcoins are created. It occurs once every four years. As many know, Bitcoin’s (BTC) supply is finite. So, every time a Bitcoin halving occurs, miners begin receiving 50% fewer BTC for verifying transactions.

    • Hiya edahnewton1 

      Thank you, I’m glad you enjoyed it. I am looking forward to seeing what happens immediately before and after the halvening event and also in the longer term. Will history repeat itself or have variables altered so much that the outcome will be completely different? We’ll all just have to wait and see!

      Thanks for your interest.

      KRs

      PurpleLioness 

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