On the weekend, the Bitcoin ecosystem reached an extremely important milestone.
Taking place roughly every four years, the “halving event” officially occurred on July 9, cutting the reward for mining a block in half. In this case, the reward went from 25 BTC to 12.5 BTC.
Why is this such a cause for celebration?
It’s because halving is a planned part of the Bitcoin ecosystem to curtail new supply of the popular cryptocurrency. Eventually inflation is supposed to mimic the limited increase of new gold mined each year, rising just under 2% annually.
Bitcoin Magazine has put out the following infographic, which compares key metrics on the Bitcoin ecosystem. It compares facts and figures on the cryptocurrency from when the first halving event took place (Nov 28, 2012) with today’s metrics.
The landscape looks very different, with metrics such as price, users, market cap, and hashrate all skyrocketing upwards:
The Bitcoin Halving Event
At first glance, the Bitcoin halving event should be a big deal that has immediate effects on the trading price, which can be notoriously volatile at times. The reward for the same amount of work has decreased by 50% for the miners that verify transactions on the network, and there is no shortage of speculation on how this could impact the market.
However, it can also be said that many participants were prepared for the impact of the halving. Everyone knew it would occur, and this has been taken into account by the market, miners, and traders for years.
So far, bitcoins have traded within their regular range, and there has been little impact on the price since two days ago.
The long-term effects of the halving remain to be seen.