Is less actually more? Will halving be a boon to Bitcoin or an absolute curse that will lead to a spectacular crash? Money needs to be printed to be used, it has to be brought into circulation. Whether it is paper based or virtual, someone has to decide how much of it is going to be brought to life and when. Fiat currency and Bitcoin mining
Usually fiat currencies are printed by central banks to control inflation or as a part of a wider monetary policy of a nation-state.
In case of virtual currencies, since there is no national government involved or fixed borders, other means need to be deployed to manage money supply.
Bitcoin is supplied by ‘mining’ a process which involves doing complicated mathematical calculations using special software and hardware.
The creator of Bitcoin ensured that only a limited amount of Bitcoin could ever be brought into circulation and that number is pegged at 21 million.
He or She also ensured that mining becomes progressively difficult as time goes along and more Bitcoin are mined.
We know from Blockchain.info that as of April 2016, there are about 15 million plus Bitcoin in circulation. Source: Blockchain.info The halving and what it is all about
The Bitcoin system was so designed that from time to time mining value is halved.The next time this is supposed to happen is on July 11, 2016. Halving will have a dramatic effect on miners as their income will drop significantly.The difficulty level of mining Bitcoin will also ensure that smaller miners will no longer find it viable to mine the cryptocurrency leaving the mining space to large operators or pooled mining companies.This trend has already been observed with the Chinese taking up mining on a large scale and mining more than half of the Bitcoin mining that happens […]
