What is Bitcoin Halving? In this article on shetcoiner site, we want to consider this issue; so stay with us until the end of this article.
Bitcoin mining is a process in which individuals use their miners to participate in the Bitcoin Blockchain network as a processor and transaction validated. Bitcoin uses a system called Proof of Work (PoW); This means that miners must prove that they have tried to receive rewards in processing transactions. This effort involves the time and energy required to execute and solve complex equations. The word mining means collecting crypto currencies by solving difficult equations.
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Bitcoin miners solve math problems and approve a transaction. They then add these transactions to a block and create chains of these transaction blocks to form a Blockchain. When a block is filled with transactions, the miners who processed and verified the transactions within the block are rewarded with Bitcoin. It is interesting to note that transactions with higher monetary value require more authentications to ensure security. In the next part, we want to talk about halving the Bitcoin mining reward.
Bitcoin Mining and Half Rewards
After mining every 210,000 blocks, which takes about four years, the reward given to Bitcoin miners for processing transactions is halved. This event is known as Halving because it halves the release rate of new Bitcoins in circulation. This method of Bitcoin is to inflate until all the Bitcoins are released.
This system will continue until around 2140, when it will reach 21 million. At that time, miners are rewarded with the costs that network users pay for processing transactions. These costs indicate that miners will continue to be motivated to extract and maintain network security.
The Halving event is very important because approaching this event affects the rate of new Bitcoins being produced. As you know, the maximum amount of Bitcoin is 21 million which there are about 18.85 million Bitcoins in circulation by October 2021, and only about 2.15 million Bitcoins remain which are released through the extraction bonus. Interestingly, in 2009 the reward for each block in the mining chain was 50 Bitcoins. After the first halving, it was 25 and then 12.5, and then from May 11, 2020, it became 6.25 Bitcoins for a block.
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In this article on shetcoiner site, we have examined this issue of Halving and its impact on Bitcoin; We also looked at the halvings that have taken place so far and said what the miners will do after moning all the Bitcoins.
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