To understand bitcoin halving, you first need to understand Bitcoin mining. Bitcoin mining is the mathematical verification process that is done to confirm the transfers and write them permanently to the public blockchain. Bitcoin miners are also called “miners”. Miners need incentives to perform these mathematical verifications. This incentive is provided with a 12.5 BTC award given when each block is produced in the blockchain. There are 10 minutes between each block in the bitcoin blockchain. So a block is produced every 10 minutes. This also means that 12.5 BTC is produced every 10 minutes. Currently, 1800 BTC is produced daily, indicating that 1800 new BTCs enter the market every day. Halving is the process of halving block rewards in Bitcoin. Due to Bitcoin’s system, this event occurs every 210 thousand blocks. This corresponds to approximately 4 years. Satoshi Nakamoto, the inventor of Bitcoin, aimed to create an asset that is protected against inflation by designing a system in which block rewards will be halved every 210 thousand blocks. In this way, the production of Bitcoin will gradually decrease over the years. Inflation will drop at that rate, as fewer new Bitcoins will enter the market each time. When is Bitcoin halving? To date, two block prize halves have occurred. The first was in 2012, the second was in 2016. The block reward, which was 50 BTC in the first half, was reduced to 25 BTC. In the second half, this prize was drawn to 12.5 BTC. Now, the third half will take place approximately between 12-13 May. The block reward will drop to 6.25 BTC this time. Thus, the amount of BTC produced daily will be increased to 900. This means that the sales pressure created by BTCs that have just entered the market will decrease by half. Why is Bitcoin halving important? The main importance attributed to Bitcoin halving stems from the impact it is thought to have on price. Within a year of the block prize halves that ever took place, the price of Bitcoin had risen dramatically. It is assumed that this price increase was triggered by the decrease in sales pressure caused by miners on BTC and the supply of crypto money gradually decreasing. If the demand for Bitcoin remains the same after the halfway, the supply is expected to fall 50 percent, so the price is expected to increase due to the basic principle of the economy. Another importance of Halving is that its annual inflation will decrease to 1.7 percent. After the halfway occurs, Bitcoin’s annual inflation will drop to 1.7 percent and Bitcoin’s shortage will equalize with gold. Bitcoin halving predictions The block reward halving in Bitcoin has not brought a significant rise in terms of price so far in the short term. This rise was within 1 year, which can often be expressed as a medium term. Chris Wood, the head of global equity strategy for global investment bank Jefferies Group, recently advised investors to buy Bitcoin before splitting in a note sent on April 30. Wood also added, “Halfway should increase upward pressure on price, assuming that demand for Bitcoin will continue to increase, as after the block prize halves in 2012 and 2015.” used expressions.
