Bitcoin is becoming more of a household name these days, as well the news that surrounds the digital currency. Released as open-source software in 2009 by mysterious inventor(s) using the pseudonym Satoshi Nakamoto, Bitcoin has earned further headlines for its popularity and efficiency. In 2012, an event called halving changed Bitcoin’s economic landscape-- a predetermined event that is built-in and essential to the digital currency system. So just what is halving and when will the next iteration occur? Read on for Catalyst’s guide to “the Halvening.”
What is halving?
To understand halving, you must first understand how a Bitcoin is earned. All Bitcoin transactions are handled by “miners” who lend their computing power to run the financial system itself. Once a “block” of transaction data is processed, the miner receives a reward for their use of hardware and electricity. Initially, the reward for one block was 50 Bitcoins-- but there was a planned 50% reduction of the reward approximately every 4 years. There is a finite amount of Bitcoin to be mined, so this halving is intended to lengthen the currency’s lifetime and allow its financial market to mature.
*NOTE:-- Some terms used to refer to this reduction are: Bitcoin halving; reward halving; Bitcoin mining reward halving; the halving; or, in the world of memes…the Halvening.
When will halving occur?
Since the reward reduction-- or halving-- is a scheduled event, Bitcoin miners and investors have been anticipating this since the beginning of the system. The next halving is expected to occur in early July 2016, but the effect on the market value of Bitcoin will likely remain stable. There will no doubt be long term economic effects as the system and currency age, but these too will be offset by increasing usage and trust of Bitcoin (as well as other, similar forms of payment).
Are you curious about Bitcoin, halving or just digital currency in general? Contact Catalyst Network Solutions today! As a local company on the cutting edge of technology, we can integrate the newest information technology solutions with your home or business.