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Bitcoin Halving

Published: 4th Mar, 2024

Context

‘Bitcoin Halving’ is predicted to happen in April this year.

What is the Bitcoin Halving?

  • The Bitcoin Halving refers to the 50% reductionin the reward paid to Bitcoin miners who successfully process other people’s cryptocurrency transactions so that they can be added to the public digital ledger known as the
  • Proof of work: Bitcoin miners rely on advanced computer equipment to solve a complex mathematical puzzle through a process known as ‘Proof of work’ to grow Bitcoin’s blockchain and keep the ecosystem running.
    • Carbon footprints: This intense activity is the reason Bitcoin transactions result in huge carbon footprints and require vast amount of electricity. No real mining is carried out.

Why does the Bitcoin Halving matter to crypto investors?

  • Bitcoin mining increases the supply of BTC in circulation while the Bitcoin Halving reduces the rate at which these coins are released, making the asset more scarce.
    • Scarcity is seen as pushing up prices, as is the case with gold.

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