If you know any thing about cryptocurrency then you understand how a big deal the Bitcoin’s 2020 Halving is. If you don’t, then you need to understand the fundamentals of BTC mining.
In a nutshell, new BTCs are introduced to the industry as rewards for minors when they mine Bitcoin blocks. When Satoshi was making the regulations for Bitcoin protocols, he pointed out two essential things:
The supply of BTC is restricted and finite to 21 million. The other important thing is that the number of BTC mined per block should reduce by 50% for every 210k blocks.
The duration takes for BTC Halving
Because six blocks are available on average with a 60-minute and halving takes place once in 210k blocks, then halving events will occur every four years. meaning we will have the next event with Bitcoin’s 2020 Halving.
Basically, this means that BTC generation rewards will be reduced by 50% from the initial amount. For instance, if every BTC generator gets 10.5 BTC for mining a block, they’ll get 5.25BTC after the halving event happens.
Since 21 million BTC have been mined over the period, that does not imply that there are 21 million BTCs available. It would be best if you considered the lost BTCs that won’t be recovered.
Within the next six months, the world is expected to see the Bitcoin’s 2020 Halving. Recognized as halvening/halving, the number of coins provided per block to miners will be cut 12.5 to 6.25. That means that Bitcoin’s inflation rate will be cut into equal parts.
The halvening mechanism must be stored in the code in many years to come. And will guarantee there will be 21 million BTC available. This links to Satoshi’s apparent obsession with building a scarce and hard type of currency that is not like fiat money that is printed with no limits.
Most developers and economists have doubts about Nakamoto’s decision to limit the number of coins to be printed.
Since it’s recognized as a not feasible in the long run. Stakeholders and other people involved in this industry suggest that helvening event will bolster Bitcoin. Making mass FOMO among investors.
Bitcoin’s 2020 Halving posed for Bull Run
Recently, TokenDaily published a report known as “the 2020 crypto crystal ball”. In this case, the company published predictions from executives in the industry about the New Year for the crypto market.
The majority of those mentioned stated that they anticipate for the 2020 halvening to have a definite positive effect on the BTC market.
Not every person convinced
The interesting thing is that not every person is convinced that helvening will do magic for the market. Jason Williams, the founding partner of Morgan Creek Digital, pointed out that at the Bitcoin’s 2020 Halving won’t affect the price in May 2020 since it won’t be an event. This declaration comes during the start of a great recession in the crypto markets. This has played a role in discouraging many hulking sentiments and narratives being published this year.
Jason is not the only person with doubts. Jihan WU, founding partner of Bitmain claims that he thinks that bitcoin Bull Run might not be an event in 2020.
Maths favors Bitcoin bulls
The truth is mathematical figures might favor the bulls.
PlanB, a leading institutional quantitative specialist interest in BTC, discovered earlier 2019. The market capitalization of bitcoin could be defined by the stock-to-flow ratio of the crypto.
The analyst’s model that is coin integrated into BTC’s price history and fits the bitcoin price to the R squared of 0.947. That suggests that crypto’s market capitalization will have a valuation of $1 trillion after the halvening event.