What is cryptocurrency halving
It is a concept usually associated with bitcoin, although it can take place in other cryptocurrencies . What is Halving? When will the next halving take place? Users fill the Internet with these questions to try to understand how it works and when are the key dates of this automated process that takes place in the blockchain of a cryptocurrency.
In short, PoW is a protocol that involves all parts of a network that perform complicated work and the subsequent verification of that work, in exchange for rewards. Therefore, miners compete to solve costly mathematical network problems and when devising a solution - before adding the block to the network - the validation test by the rest of the decentralized nodes must be passed. If the answer is finally correct, the block is validated and added to the chain in order to obtain a small reward (to be distributed among all those who worked on solving the block).
Now that we understand the protocol that influences the reward obtained from each validated block, it is time to understand what halving is.
What is halving and how it works
Halving is an automated process within some blockchains (especially those based on Bitcoin code) whereby the reward for mining new blocks in the chain is halved.
Therefore, halving means reducing the reward that miners earn and thus controlling the pace of creation of new cryptocurrencies. This is the function of halving.
Limiting the rate of issue of new cryptocurrency units, reducing the reward obtained to generate them, leads to the progressive growth of the value of the cryptocurrency.
This halving process takes place approximately every four years . It all depends on the time taken to mine each block. This periodic event is important as it ensures that coins are issued at a constant rate.
Bitcoin halving
As already mentioned at the beginning of this post, halving is closely linked to the Bitcoin network. This is because it was the first cryptocurrency to implement this process.
What is Bitcoin Halving? The mechanism that Satoshi Nakamoto devised to limit the emission of BTC. Without the existence of this process, surely, all existing bitcoins would have been mined.
Since the number of bitcoins has run out , to control the production of BTC and reach a deflationary model, the network has been configured in such a way as to always guarantee the existence of new cryptocurrencies in circulation. In this way, it is possible to democratize this cryptocurrency as a decentralized exchange method , avoiding that everything ends up in the hands of a few.
We are currently in the third half-life phase where each block is rewarded with 12.5 BTC. And what will happen in the next phase? When will bitcoin halving take place? It is already known that with the next halving, the amount of BTC per block will be 6.25 BTC. That is, half.
Halvings beyond bitcoin
In addition to bitcoin halving, there are other halvings that attract the attention of many users. Projects that work with the same guidelines as bitcoin and that also experience halving in their blockchain. This is the case with Litecoin, which is based on the same open source code as bitcoin.
The LTC limit is significantly higher than that of the Bitcoin network. 84 million LTC against 21 million BTC. In addition, emissions are also checked. Litecoin halving occurs approximately every four years.
In particular, litecoin halving occurs every 840,000 blocks. The last one occurred last year in 2019. Since then, the reward has gone from 25 to 12.5 LTC tokens per mined block. Hence, it is never too late to buy litecoin .
So now you already know what cryptocurrency halving is, an automatic process that halves the rewards of mining, and what is the most important. Now we invite you to carefully follow the Bitnovo blog to stay updated with all the news in the world of blockchain tokens.
