Crypto Daily Topic

Everything You Need To Know About the Upcoming Bitcoin Halving

Bitcoin fans across the world look forward to a special event every four years. This event is the Bitcoin halving, christened ‘halvening’ by the community to give it a more apocalyptic tone.

On May 12th, 2020, the cryptocurrency is set to undergo its third halving, and the community is riled up as ever in anticipation of the event.

In case you’re new to the whole brouhaha or wish to get a clearer understanding of what it’s all about, read on as we break everything down.

The Upcoming Halving is Generating Interest like Never Before

Data from Google Trends shows that search for the event was at an all-time high between April 5th and the 11th, as more people Googled about “bitcoin halving” in anticipation of the event.

Google Trends ranks interest on terms on a scale of zero to 100, with 100 being the highest amount of interest an event/term can generate, based on region and period.

What is Bitcoin Halving?

Miners are network participants who validate transactions and add new blocks on the blockchain. By doing this, they make the sending of bitcoins throughout the network possible. Miners get rewarded with ‘block rewards’ – in the form of bitcoins, for doing so.

Mining is a pretty resource-intensive activity, and it’s known for consuming a lot of electricity. A lot of people describe mining as involving the solving of complex computational puzzles. A more apt description is that miners will rapidly enter a string of random numbers until they finally enter the right one – which constitutes the next block.

Mining is very crucial to Bitcoin’s security. Since every new block is linked to the previous one using cryptography, it renders it almost impossible to interfere with the blockchain and hence transactions.

The block reward, in a sense, is the driving factor behind the running of Bitcoin since it incentivizes miners to continue producing blocks and, as a result, keep the blockchain secure – and honest, and hence something that millions of users around the world can trust. If Bitcoin had a history of manipulation and tampering, it wouldn’t be the trusted blockchain and cryptocurrency it is today.

The cycle of block rewards halving is embedded into Bitcoin’s code, and it enables the deflationary supply of Bitcoin.  

What is a Block Halving Event?

Block halving is the slashing of block rewards into two. Block rewards are bitcoins that Bitcoin miners are rewarded for verifying blocks and adding new transactions on the blockchain (more on that below).

In the early days of Bitcoin, miners received 50 bitcoins for every mined block. On the 29th of November 2012, at the 210,000th block, this reward was slashed into half into 25. On July 10th of 2016 (approx. after four years), this rate was halved again into 12.5. In next month’s halving, which will take place presumably on May 12th, it will be halved into 6.25 bitcoins per block. The 2016 halving took place at block height 420, 000, and the upcoming one will take place at the height of block 630, 000.

To date, roughly 18.3 million blocks have been mined out of the 21 million that will ever exist.

Who Controls the Issuance of Bitcoin?

The short answer is, no one. Rather, Satoshi Nakamoto, Bitcoin’s creator, programmed the network itself to control how new coins are ‘minted’. In turn, new coins are issued after consensus among network participants.

The issuance of new bitcoins follows these rules:

21, 000, 000 million is the number of coins that will ever be produced

A 10-minute interval between the production of new blocks

The halving of block rewards after every 210,000 blocks

An initial bock reward of 50 bitcoins and the halving of the reward at each halving event until a zero value is reached (approx. in the year 2140).

What’s the Idea behind Halving?

Bitcoin’s supply is programmed to decrease, becoming scarcer over time. The premise is if the supply decreases, demand will increase, cushioning its users against inflation of the currency.

This is in stark contrast to the inflation-prone traditional currencies whose value decreases over time. For example, anywhere in the world right now, the purchasing value for a US dollar has decreased over time. Bitcoin is built to be the opposite of this. As its supply diminishes over time, and its demand and value increases, so do its purchasing power.

Will the Price of Bitcoin Go Up After the Halving?

The Bitcoin halving event is a huge deal: it signals a decrease in the supply of the world’s first and most successful cryptocurrency. As you would expect, it’s not one that comes and goes quietly. Naturally, the pomp and fervor that surrounds it has to influence Bitcoin’s price, right?

This is always a debate every Bitcoin halving season. Some people believe that the price will change little, if all, since the halving has already been factored in by the market. Others believe that the halving in supply should prompt an increase in the demand for Bitcoin. Either of these scenarios can play out. One, no significant change at all, or there can be a significant bump in price. What’s for certain, though, is that the event will bring with it new entrants, and the reduction in block rewards will cause an increase in demand.

Perhaps even, history will repeat itself. Bitcoin saw a major price bump a year later, both after the past two halving events. We may not see a massive rise right now, but we might see one a year from now.

Who Will Be Affected by This Event?

Of course, the halvening, uh, bringeth a few ripples that will be felt by certain players in the Bitcoin ecosystem – one way or another.

As we’ve already noted, miners will see their block rewards cut in half. For miners that are still using the older and less efficient mining models, this is not good news. Also, miners who have recently invested in mining hardware will have to wait a bit longer before they can start realizing significant ROI.

Exchanges will also be affected since they are at the center stage of any market shift. If prices take a bullish nature, they (exchanges) will be best positioned to reap from this trend.

Where Can I Witness the Halving?

You can follow the halving via a block explorer, where you can see new block updates.

In the past, Bitcoin fans across the world have held halving parties, but due to the social distancing courtesy of the Covid-19 pandemic, it looks like this time, people will follow the event from their homes. Of course, you can always join fellow Bitcoiners on Twitter, Telegram, and internet relay chats as everyone counts down to the halvening.

Crypto Daily Topic

Why is Bitcoin’s hashrate on the rise? 

Bitcoin’s hash rate has reached an all-time high of almost 120 exahash per second. The crypto reached this milestone two days shy of its birthday – on January 1st. (January 3rd is Bitcoin’s birthday, being the day the first block of Bitcoins was mined.) On new year’s eve, Jameson Lopp, CTO of CASA, the multisig wallet company, tweeted that “Bitcoin’s network hash rate increased by 162% during 2019, from 38 to 100 exahash per second.”

To put this in perspective, bear in mind that Bitcoiners were celebrating when the hash rate went over six exahashes in 2017. 

Also, consider the fact that this year’s surge in hash rate is despite 2018’s rather bearish market, followed by the subdued market sentiment in 2019. 

What’s A Hash Rate?

For the nontechnical crowd, the hash rate is simply the speed at which a mining computer operates. In the case of Bitcoin and other cryptocurrencies that rely on mining to release new coins into existence, the hash rate is the efficiency and performance of a mining machine. It refers to the speed of mining hardware (specialized computers designed to handle the intensive computational power of crypto mining) when trying to solve or “compute” a block.

A higher hash rate is advantageous because it means a miner has an increased chance of finding the next block and receiving a reward.

What Does This Mean For Price? 

Many crypto enthusiasts take a high hash rate to mean a higher price for Bitcoin. But this is still a contested fact. Other people believe that a high hash rate has the opposite effect. 

Sometimes the correlation is the other way round. An increase in Bitcoin price causes the hash rate to surge, as was the case around the period of May to June 2019, when, according to BitInfoChart, hashing power leapfrogged in response to the price uptrend. This trend continued until Bitcoin’s hash rate reached an all-time high of 108.8 m terahashes per second. (100 m TH/s = 1 exahash.)

While the relationship between hash rate and price is still a point of debate, it’s worth noting that the increase in hash rate is happening just as we are entering the year of the next halvening. As we count down to 20 May 2020, the date when Bitcoin halving will take place, prices will almost unquestionably have a bullish run. What effect will this have on the hash rate? We can only wait and see. 

Hash Rate Doesn’t Mean Everything

An increased hash rate translates into stronger network security. That’s pretty much agreed upon. What it does not mean, though, is more miners are joining the network, or decentralization has been strengthened even more. For instance, the vast majority of miners are located in China, as opposed to a proportionate global distribution the way Satoshi Nakamoto envisioned. As such, the hash rate is not close to a holistic dimension of network health. To its credit, however, the network has so far proven resilient against attacks and censorship, which is quite impressive. 


Eleven years since its inception, Bitcoin is presenting with an unprecedented hash rate. This fact only spells good tidings for the network – and its cryptocurrency. The world’s first cryptocurrency is getting stronger, and this is good news for investors, crypto enthusiasts, and even blockchain fans. Let’s see which way the hash rate goes as we advance towards the next halvening, and especially after it.

Crypto Daily Topic

The Eighteenth Million Bitcoins Will have Be Mined by the of This Week

This week marks a milestone in the life of the world’s first cryptocurrency – Bitcoin., the cryptocurrency monitoring platform, reported that the total Bitcoins in circulation had reached 17.72 million by October 14, 2019. It will take the days before next week to mine the remaining amount to 18 million.

It has taken Bitcoin slightly over ten years to expend 85.7 of its total supply, which is quite the metaphorical “drop in the ocean” when compared to the 120 more years it will take for the total number of coins to be mined.

120 Years?

For many people in the crypto community, this seeming discrepancy might prove confusing. How can it take ten years to mine 18 million coins and 120 years to mine the remaining 3 million? The answer is in the network creator’s genius model, which is built to make the currency appreciate as the years go by, rather than devalue.

Now, the number of Bitcoins is finite. There can only be 21 million coins in supply, and when one day all coins are mined, no new ones will be introduced.

Miners get block rewards (free coins) every time they mine new coins. As time goes on, the block rewards are halved – for every 210,000 blocks mined.

When Bitcoin was new, miners could receive 50 coins for every block. The first halving was in 2012, bringing the rewards to 25 coins. The next halving happened in 2016, cutting the rewards to 12.5. The next one will occur on May 2020, making the reward 6.25 coins.

If the Bitcoin protocol remains intact and the halving process remains consistent, Bitcoin will reach the maximum supply cap in 2140.

Bitcoin Investors Are “HODLing” More Than Ever

Meanwhile, the number of addresses hodling 1000+ Bitcoins has increased, as people stockpile on the currency. 

On-chain analyst Glassnode (on-chain refers to transactions that occur on the Blockchain and are only valid when it’s modified to reflect them) has highlighted that the number of Bitcoin wallets holding more than 1000 BTC is now 2100 separate wallets. More wallets are holding bitcoins in the 1,000 – 10,000 bracket more than in any other bracket.

Similarly, the number of bitcoins in wallets with 1000+ wallets has gone from strength to strength: from 6, 919, 950 in September 2018 to 7, 184, 501 in January this year, to 7, 530, 446 as of October 14, 2019. 

These numbers indicate that as we approach the next “halvening,” people are buying Bitcoins in larger volumes, as further indicated by the recent increase in hash-rate discussed in more detail below. 

Bitcoin’s Hash Rate Is at an All-Time High

The hash rate for Bitcoin is also at an all-time high of 110.19 EH/s after being on a steady increase for the last two years – according to the cryptocurrency analysis website Hash rate is essentially the rate at which a crypto-miner is working. The faster they are working, the higher the hash rate, and the quicker they can solve the next block and claim their reward.  

Just in July this year, the hash rate was 80 EH/s and has since grown by 37% in that short amount of time. In September, it hit 100 EH/s for the first time ever, with new highs regularly being achieved for the network. A high hash rate indicates surging mining activity on the Bitcoin network. This could be due to more miners scrambling to acquire more block rewards, or simply due to more efficient mining rigs entering the industry. 

Effect of Halving on Miners and a Next-Generation of Mining Rigs

With the next Bitcoin halving event being only six months away, the mining rig industry is rushing to roll out sophisticated and more powerful hardware to meet changing demands. As the reward rate goes down from the current 12.5 bitcoins for each mined block to 6.25, miners will want to mine even faster to get more coins within shorter time frames.

As such, we are witnessing a new wave of mining rigs, each more powerful than its predecessor. Some of the types of equipment are even up to about 500% more powerful than the older models, in terms of hash rate. 

Going by Bitcoin’s previous halving events, the crypto is likely to witness an upswing in the year before and after the event. This is especially likely, considering the currency continues to show strongly this year. Assuming that it remains on that path in the next few months, chances are it will experience an upswing after the next halving.

Bitcoin After 2140

One of the crucial aspects of Bitcoin’s survival is miners – the people who secure the network and verify transactions. Thus, a legitimate question is: what will happen to miners after every Bitcoin has been mined? After all, there won’t be any financial motivation – they will not be able to exchange their block rewards with cash. Will Bitcoin continue to function?

Fortunately, the network’s creator, Satoshi Nakamoto, envisioned this and addressed it with this statement: “Once a predetermined number of coins have entered circulation, the incentive can transition entirely to transaction fees and be completely inflation free.” What this means is besides block rewards, the Bitcoin protocol also provides transaction fees as a “compensation” option.

The transaction fees will rise after the maximum supply is reached; hence, mining will not be a loss. The only caveat is: currently, the fees pale in comparison to the reward of Bitcoins. However, as the rewards continue diminishing, the transaction fees will increase. The final result is the transaction fees will become valuable enough so that miners should continue verifying transactions. So, while new Bitcoins cease to enter into circulation, Bitcoin miners still get a payday. 

As these exciting chapters for the world’s pioneer’s currency continue to unfold, we can only wait and see how it holds up. It should particularly be interesting to see the coin prove its mettle after the next “halvening.”