Bitcoin has just experienced the most anticipated cryptocurrency event of 2020: its third halving, which has cut the miner block reward from 12.5 BTC to 6.25 BTC.
The event occurs only once every four years and took place at 7:23 p.m. UTC on Monday, according to Tradeblock.com.
Bitcoin block reward cut by 50%
Since the first Bitcoin block was generated in 2009, there have been three halving events that took place once every 210,000 blocks mined, or approximately once every four years. A Bitcoin halving cuts the current miner block reward by 50% each time it happens. The first Bitcoin halving event that took place in 2012 dropped the reward of the original block from 50 BTC to 25 BTC. The second halving took place in 2016 and cut the reward from 25 BTC to 12.5 BTC.
Bitcoin’s supply is limited to 21 million coins. In 2009, the system started at 50 coins mined every 10 minutes. After two halvings, 12.5 Bitcoins are currently mined every 10 minutes.
Bitcoin halving events should continue until the year 2140, and it will end with a total of 21 million coins. By that time, the block reward should reach 1 satoshi, which is the smallest unit of Bitcoin at 0.00000001 BTC.
At the time of publication, the number of Bitcoin in circulation is 18.37 million, according to Blockchain.com.
The impact of halving on Bitcoin’s price
The two previous Bitcoin halvings impacted Bitcoin’s price in positive ways. Currently, the crypto players have made predictions about the impact of the third halving on Bitcoin. Some have predicted that the halving will increase the price, while others have said that there will be no effect at all.
While the immediate impact on the price of bitcoin was small immediately after the first two halvings, the market saw a gradual increase over time. Some have said that the increase was a delayed result of the halving based on the theory that when the supply of bitcoin declines, the demand for bitcoin stays the same and pushes the price up. Nobody actually knows what will happen, and many speculations are everywhere in the crypto space, but the future will show us all how Bitcoin will react to its halving.