We are gearing up for all the special events, parties, and celebrations that will be taking place around the globe to commemorate the event.
Bitcoin has had 2 prior halvings, and the next one is set to take place on Tuesday, May 12th, 2020. As a global community has sprung up around Bitcoin, the halving has become a day of celebration for the continued existence of the Bitcoin experiment.
This will be the 2nd halving for Bitrefill, as a company. We are excited to participate in the special events and celebrations that will be taking place this weekend and into the beginning of next week.
We will be hosting an AMA with our CEO Sergej Kotliar, on our r/Bitrefill subreddit on Monday, May 11th 2020. We’ll be responding to questions until the halving occurs.
How to Participate in the AMA:
Join us Monday, May 11th, at 4pm (CET) and ask questions on our Bitcoin halving AMA post in the r/Bitrefill sub-Reddit. To ask questions, you’ll need a Reddit account.
Also, Sergej will be speaking at Bitcoin Magazine’s 21-hour Bitcoin Halving livestream event. This event will also feature many other speakers from a wide spectrum across the entire Bitcoin community.
We will also be announcing other special events in which Bitrefill will be taking part, So stay tuned to our Twitter, and our Telegram chat for details. The Bitcoin halving of 2020 will be the biggest Bitcoin celebration to date, as the community has become a lot larger over the last 4 years.
Why is the Bitcoin halving important?
Satoshi Nakamoto truly understood economics and the principles of sound money. For Bitcoin’s design, he tried to replicate the qualities of precious metals like Gold and Silver, and recreate them digitally, creating cryptographically provable scarcity.
One simply can’t print more Bitcoin.
Since Bitcoin’s total supply is capped at 21 million coins, its design is diametrically opposed to our current system of money. Central banks print more money when they see fit, devaluing the existing money in circulation.
Here’s how the Bitcoin inventor described it:
“In this sense, it’s more typical of a precious metal. Instead of the supply changing to keep the value the same, the supply is predetermined and the value changes. As the number of users grows, the value per coin increases. It has the potential for a positive feedback loop; as users increase, the value goes up, which could attract more users to take advantage of the increasing value. “ — Satoshi Nakamoto
Mining is how new Bitcoin is “minted”
In order to create a completely new kind of digital currency, Satoshi had to decide how to issue the new coins in a fair manner, and settled upon mining, and Proof of Work. Anyone is free to solve PoW calculations and mine blocks.
Miners pay for the equipment and electricity to do so, thereby providing a security bedrock to the Bitcoin ledger. If you want to modify the entries you will have to invest an enormous amount of money, which could be wasted if the majority of economic nodes reject it. Each miner can earn a set amount of newly-created Bitcoin for mining blocks of validated transactions.
This process of earning Bitcoin through mining is called the block reward. The block reward decreases by 50% every 210,000 blocks which are mined. Since blocks are mined roughly every ten minutes, this means about every 4 years, the block reward is cut in half.
This emission reduction is called the Bitcoin halving.
The block reward started out at 50 Bitcoin when the Bitcoin network initially launched, and Bitcoins mined didn’t really have any value as Bitcoin was so new. Only a few cypherpunks even knew about it.
After the first halving, the block reward of 50 Bitcoin was “halved” to 25 Bitcoin, and after the second halving, this block reward again was cut in half to 12.5. Now, the third halving will further reduce the block reward to 6.25 Bitcoin.
This process will continue until 2140, when there will cease to be any Bitcoin rewarded to miners for validating blocks. At this point, they will need to survive on transaction fees, in order to fund their mining operations.
As Bitcoin’s popularity increased and new users joined the network, we have seen Satoshi’s positive feedback loop actually working in the wild. Bitcoin has increased from a novelty with no value, to an all time high of almost $20,000 Dollars per coin, with a global market cap of $170 billion dollars at time of writing.