Halving is one of the essential terms that need to be known by those who want to invest in digital assets. This term will often be used in the world of crypto trading and is closely related to the first crypto asset, bitcoin (BTC). This term is already familiar for bitcoin miners and is also known as “halvening”.
So, what exactly is this halving, and how does it affect the miners? Check out the full review below.
What is Halving on Crypto Assets
Halving is the reward earned by miners who successfully add new blocks to the blockchain.
It is also important to note the halving will be carried out every 210,000 blocks that are mined, or the equivalent of every four years.
In the first year of this halving, miners who initially received a reward of 50 BTC since 2012 then only received half the reward or 25 BTC.
This second bitcoin halving has reduced the miner’s reward since this year, from the original 25 BTC to 12.5 BTC.
The most recent halving occurred in 2020, on May 11, 2020. At that time, bitcoin miners would earn only 6.25 BTC for each mining result.
What is the Function of Halving on Crypto Assets?
Through the implementation of the halving, the amount of new BTC entering circulation will remain limited. Thus, its value will continue to rise.
Another question is, why do miners have to cut the yield or yield every four years? The answer is that the supply of Bitcoin is decreasing because it is constantly being mined.
How Halving Works
Then, these transactions are digitally combined into a block. Each block will be united in a chain alias blockchain. Well, the miners in this blockchain act as digital auditors.
Their job here is to track and check the validity of every transaction against the crypto asset. Later, they will receive a reward in the form of BTC in a predetermined amount.
What are the Effects of Halving?
Usually, after the halving, the price of BTC will decrease, but a year later, the price will skyrocket.
It is also important to note that the price of BTC after the first halving in 2012 only decreased by $12, and a year later, the price skyrocketed to $1,000 per chip.
However, why does that happen?
Basically, the BTC boom occurred because the existence of this oldest crypto asset was increasingly sought after. After the halving, news related to bitcoin will usually be more and more so that the demand is higher.