When it comes to cryptocurrency investing, each investor aims to heighten their knowledge as much as possible so that they can make a well-educated decision when it comes to what cryptocurrency to invest in and at what point in time they need to do so.
Bitcoin (BTC) is the largest cryptocurrency in terms of market capitalization, and as such, it is the most widely known, invested in, and discussed cryptocurrency.
However, one feature that the blockchain has that not as many people know about is Bitcoin halving. If you want to buy Bitcoin, or crypto currencies as a whole, this is a concept that you need to grasp.
This is essentially a process that, on average, occurs once every four years. However, things get a lot deeper than this, and Bitcoin halving can potentially have a huge impact on the value of the cryptocurrency. If you find that you are asking yourself “should I buy Bitcoin now”, and where to buy Bitcoin as a whole, we will be going over everything you need to know here.
Suppose you are curious about learning more surrounding the Bitcoin (BTC) cryptocurrency. In that case, we will be going over everything you need to know so you can anticipate the next Bitcoin halving event fully prepared.
Bitcoin Halving: Everything You Need to Know
When Bitcoin was first introduced through the whitepaper “Bitcoin: A Peer-to-Peer Electronic Cash System” by an anonymous person or a group of people that went under the name of Satoshi Nakamoto, we were introduced to its underlying technology.
Out of it, by far, one of the most fascinating and important aspects was and still is the Proof-of-Work (PoW) consensus mechanism.
PoW is the consensus mechanism where users can engage their computers to participate within the Bitcoin network as transaction processors and as a validator.
Each miner is in a race towards proving that they have put effort into processing transactions, and the winning miner or mining pool will receive newly mined BTC as a reward for their efforts.
Whenever a block gets filled up with transactions, the miners that processed and confirmed the transactions within the block get rewarded, as the transactions of monetary value all require confirmation which ensures the security of the blockchain.
Bitcoin has a maximum supply of 21,000,000 coins. In other words, once it reaches that amount of mined BTC, the network will be unable to produce new coins, and miners will be unable to mine new BTC as a result of this.
Now, if the rate at which cryptocurrencies were mined remained the same, it is highly likely that this limit would have been reached by now. But the creators of the Bitcoin blockchain implemented what is known as Bitcoin Halving, and this is a process where once 210,000 blocks get mined, which occurs roughly every four years, the block reward which is given to Bitcoin miners for processing the transactions gets cut in half.
History of Bitcoin Halving
To get a better perspective of how all of this works, we will be going over its history.
- 2009 - Mining rewards were 50 BTC per block by default.
- 2012 - The first halving occurred, where the rewards dropped to 25 BTC.
- 2016 - The second halving occurred, where the rewards dropped to 12.5 BTC.
- 2020 - The third halving occurred, where the rewards dropped to 6.25 BTC.
- 2024 - The next halving is expected to occur, splitting the BTC reward in half, and miners will receive 3.125 BTC for each block mined.
- 2140 - The 64th and the last halving is expected to occur.
Bitcoin Halving’s Role Across the Broader Ecosystem
To fully understand why Bitcoin halving was introduced, we need to take a look at inflation. Cryptocurrencies also face a challenge which has been evident in traditional currencies as well, and this is the case for inflation.
If a central authority, imagine a government or a bank, for example, would print out too much money, the money would quickly end up losing value, which would drive prices up as a means of compensating.
This can be especially problematic for currencies with no limit regarding how much money can be in circulation.
Bitcoin sets a limit to how much cryptocurrency the network can ever produce, at 21 million coins, as mentioned above, and the goal here is for the cryptocurrency to hold onto its value over time or even increase it due to the eventual scarcity.
As a result of Bitcoin, halving is utilized as a means of battling inflation and the resulting devaluation of the cryptocurrency. If miners ended up mining all of the Bitcoin cryptocurrencies at a pace of 50 BTC per miner, for one, we would have reached the limit by now, and second, its value would have been undermined.
Through halving, Bitcoin is essentially slowing down the mining of new Bitcoin (BTC) cryptocurrency.
Bitcoin halving should theoretically result in the increase in value of Bitcoin due to the fact that it will slow down the growth and the amount that is created and looking at Bitcoin's historical performance, this has held up and has actually been the case.
The next halving is estimated to occur in 2140 when the last BTC cryptocurrencies are mined, and the 21 million limits will be reached.
ZenDCA is a platform that will enable cryptocurrency investors to essentially schedule automatic purchases of cryptocurrencies and utilize strategies such as the dollar cost averaging Bitcoin (DCA) strategy. Users can also create schedules that will automatically withdraw their cryptocurrencies from exchanges to private cryptocurrency wallets, and there is an overview of each schedule performance with helpful insights.
By leveraging the power of ZenDCA, with the combined increases in value and scarcity across each halving of BTC, investors can gain the most out of their Bitcoin (BTC) purchases and holdings, and this is the best way to buy Bitcoin.
You can buy bitcoin with bank account, and later on, if you are curious what can you buy with Bitcoin, you can utilize it to buy other cryptocurrencies, goods or even services, and alongside the Bitcoin DCA strategy you can implement many others.
Moving Forward with Bitcoin Halving
Buying Bitcoin is a procedure you will find is implemented across many investment strategies when looking at crypto as an investment option.
With a deeper understanding of what Bitcoin halving is and how it works, you are in a better position when it comes to moving forward with your investment and can have realistic expectations of what you can expect to gain from the coin, as well as the industry as a whole.
While Bitcoin halving does not guarantee a price increase, historically, this has indeed been the case.
If you are interested in buying Bitcoin (BTC), or if you find yourself asking where can i buy Bitcoin, and want to implement the power of ZenDCA to enhance your portfolio, you can do so on numerous cryptocurrency exchanges, including Binance.US, Coinbase Pro, FTX.USD and Gemini.
Remember to store your Bitcoin (BTC) holdings securely by utilizing hardware, cold storage wallet devices such as the Ledger Nano X or the Trezor Model T.