10 things to know about the 2024 Bitcoin Halving

The next Bitcoin halving is getting closer and closer. As we countdown to the halving, let’s take a look at some of the most popular questions, received and collected by the crypto exchange Bitget, to learn more about Bitcoin and this event.

In this article, we’ll explain the 10 most important things to know about the Bitcoin halving.

1) What is the Bitcoin halving?

Bitcoin is often referred to as “digital gold” because, just like gold, its availability is limited. Miners are those who "dig" in search of this digital gold by solving even very complex mathematical problems; their work is rewarded with new BTC. This reward is not only an incentive for miners, but it is also a way to put new BTC into circulation.

And this is precisely where the Bitcoin halving comes into play. Roughly every four years (or more precisely when 210,000 new blocks are mined), the miner reward is halved.

Hence the term “halving”. This reduction in rewards is established in the code of the Bitcoin protocol, making it an essential part of the system.

2) When will the next Bitcoin halving occur?

The 2024 halving will take place at block height 840,000 (the number of blocks mined), between April 25 and May 8, 2024.

3) Why does Bitcoin need halving?

Bitcoin halving affects its supply and price; as mining rewards are halved, fewer Bitcoins enter circulation, causing their value to rise due to scarcity, similar to digital gold.

This mechanism, created by its creator, Satoshi Nakamoto, is a hedge against inflation, an impossible function for traditional currencies, and guarantees the rarity and value of Bitcoin over time.

Halvings incentivize miners to improve their efficiency, strengthening network security. Each halving can also increase the value of mining rewards, aligning with the rise in Bitcoin’s market price.

Furthermore, by spacing out mining rewards, the longevity and stability of Bitcoin are safeguarded, ensuring a controlled and sustainable creation of new Bitcoins.

4) What are the general reactions of Bitcoin holders to the halving?

The HODL graph shows how many individuals have held Bitcoin for a year or more; we can observe that their number has increased significantly, starting from 53.5% in July 2021 and reaching 70.2% in November 2023.

This shows that a good portion of them are confident, holding their Bitcoin for an extended period, and many are waiting for the next halving

5) What is the highest price Bitcoin has ever reached in its history?

According to coingecko.com Bitcoin’s ATH was $69,044.77 on November 10, 2021, which is approximately 1.5 years after the 2020 halving.

6) Why do miners continue to mine even if they receive less Bitcoin after each halving?

As mentioned, each halving can also increase the value of mining rewards, aligning with the increase in Bitcoin’s market price.

In addition to getting Bitcoin as a reward, miners can also receive transaction fees every time a user sends crypto to another wallet, which needs miners to validate the transaction.

Large mining companies can also do more, such as launching an initial public offering (IPO) and selling shares to the public to support their operations.

In addition to financial incentives, some miners are driven by a desire to contribute to the security and decentralization of the Bitcoin network.

7) What will happen when Bitcoin reaches its maximum supply of 21 million?

Once Bitcoin reaches its maximum supply of 21 million, expected around 2140, miners will no longer receive new Bitcoins as block rewards; their income will come exclusively from transaction fees. This change could affect the profitability of mining, potentially leading to a consolidation of the mining industry.

The fixed supply could also intensify Bitcoin scarcity, affecting market dynamics such as price volatility and investor behavior.

8) Will the halving be different this time?

“Usually, after the halving the price of Bitcoin should rise due to the scarcity effect. The 2024 halving could be different than in the past: more investors will notice the opportunity, as Bitcoin is gaining greater visibility around the world.”

Explains the Bitget crypto exchange in a post dedicated to the halving topic.

For example, the recent news that Blackrock has filed for a Bitcoin ETF could attract more people to invest in Bitcoin.

9) Is it currently difficult for new users to purchase Bitcoin?

To invest you don’t necessarily have to buy an entire Bitcoin. Instead, you must take into consideration the potential returns on Investments.

Start with a small sum and only use what you can afford to lose, because Bitcoin, like other cryptocurrencies, is a highly volatile investment. If you want to learn more about investing in Bitcoin, check out our beginner’s guide.

10) What are the other cryptocurrencies undergoing a halving?

Many other cryptocurrencies, inspired by the Bitcoin model, undergo a process similar to its halving, including:

Litecoin (LTC): Often considered to be to silver what gold is to Bitcoin, Litecoin undergoes a halving approximately every four years, just like Bitcoin. The halving reduces the rewards for mining Litecoin blocks, with a similar goal of creating scarcity and controlling inflation.

Bitcoin Cash (BCH) and Bitcoin SV (BSV): these are the hard forks of Bitcoin, and therefore they also have a halving mechanism.

Dash (DASH): The halving effect on Dash is not as drastic as that of Bitcoin. This reduction is more gradual, decreasing by approximately 7.14% each year.

Zcash (ZEC): Zcash also has a halving event, which occurs approximately every four years. This way the mining rewards are halved, similar to the Bitcoin halving process.

No one can say exactly what will happen when the 2024 halving arrives. But as the halving countdown draws ever closer, it’s up to you to decide whether this is the right opportunity.

Original article published on Money.it Italy 2023-12-13 21:24:23. Original title: Come prepararsi all’Halving di Bitcoin del 2024