The Halving Policy Of Bitcoin To Take Effect
In the world of Bitcoin, no predictions are needed, neither an obsession of analysing every world of every official community which is connected to currency and monetary policy. In Bitcoin, there is a rate at which the supply increases and is preordained by a code.
This rate will have a dramatic fall this Saturday, after an event called ‘halving’ is supposed to take place. It is widely predicted that the prices are going to reach an all-time high due to the rate of generating bitcoins being halved.
The creator of Bitcoin, Satoshi Nakamoto wanted this digital currency’s policies to contrast with the policies of Government Central Banks involving the policy where the Central Banks print an unlimited supply of currency.
He created an algorithm which gradually reduces the supply of new coins created every 4 years and developed a bitcoin software related to it.
This is the process of creating Bitcoins. Miners have to solve cryptographic puzzles on computers which will bundle the transactions into blocks which will get stored on the blockchain. They can either keep the bitcoins or sell them on open market.
The halving of bitcoins is supposed to take place at 11 a.m. Eastern on Saturday with the 420,000th block being the last one to be mined before the halving policy gets initiated.
Previously, after the last halving on Nov. 28, 2012 the price of a single coin increased gradually. But the increase in the interest in the then-nascent digital currency might have also been one of the reason for the sharp increase in the price of bitcoin. This might happen again though there is no surety about it.
If there is no increase in the price of coins, miners will struggle to gain profit which would result in majority of them to leave mining of Bitcoins. This might benefit the biggest miners in increasing their already large economy. This would be a huge loss for Bitcoin which would give out the image of bitcoin being a decentralized network.