Bitcoin will be turned upside down. For many consumers, cryptocurrency has become a way to save money and feel immune to financial crises.
BitcoinJust for the third time in 11 years, bitcoin is going through a period of profound change. Not only will the way we create bitcoins change , but there will also be a significant impact on the entire cryptocurrency market.
The mathematical code behind the cryptocurrency allows the production of only 21 million bitcoins and nothing can change this data artificially. More than 18 million have already been produced through a process called mining , whereby new cryptocurrency units are generated by computer networks programmed to solve complex mathematical puzzles. The imminent halving of the cryptocurrency, however, is going to make this process considerably more difficult.
The event, sometimes referred to as “halving”, halves production so that cryptocurrency mining generates only 50% of the yield. It takes place approximately once every four years. This time it is expected to take place on May 12th. It is not determined or governed by a centralized body. Indeed, it is encoded in the bitcoin blockchain that was created in 2008 by its creator Satoshi Nakamoto. Bitcoin was developed as an antidote to perceived flaws in the consolidated financial system, which had contributed to the global crisis of 2007-2008.
Bitcoin: the value and production rate of the famous cryptocurrency changes
The previous halves have led to sharp price increases and market volatility for several cryptocurrencies, while traders adjust to the new production limits of the world’s most valuable virtual currency. The halving in 2012 saw the value of bitcoin increase 80 times, while that of 2016 preceded a 300% increase in that value. The simplest explanation for these price increases is the demand-supply economic principle .
If the offer suddenly falls but the demand remains unchanged, the price will inevitably rise. But the decentralized and semi-anonymous nature of bitcoin implies that it is difficult to attribute gains or losses to a specific event. The halving of May bitcoins comes amid a global economic slump. Although it is not yet clear whether the collapse of the markets is bringing money from traditional assets to cryptocurrency. Some analysts say that bitcoin is becoming a gold-like asset, investors may already look at it as an alternative store of value.