A few days ago, a pretty major event in the world of bitcoin occurred known as the "halving." If you haven't read any significant literature about bitcoin, you may not have a clue what this means or why you should care. If you're not into bitcoin, or cryptocurrency generally, you may not have a reason to care. But if you're the slightest bit interested in what the halving means, read on (it's pretty painless, I promise).
Unlike U.S. currency, which is physically made in the U.S. Bureau of Engraving and Printing or the U.S. Mint, bitcoin is mined. What this means is that bitcoin comes into digital existence when a person earns it by mining. Mining is essentially the process of solving complex problems that serve to verify blocks of transactions on the bitcoin blockchain (you still following?). So when a person, known as a miner, successfully solves the problem that serves to verify a block of transactions, that person receives a reward in the form of bitcoin. Prior to Monday, May 11 at approximately 3:23 pm est, miners received 12.5 bitcoin for solving those problems. And then the halving occurred. Going forward, miners will only receive half of that amount--6.25 bitcoin. So that's the significance of "the halving"--less bitcoin for performing the work needed to verify transactions.
The halving is part of the network's protocol and will happen again and again at predetermined intervals. Bitcoin was designed to eventually have a total circulation of 21 million bitcoin so eventually there will come a point when there are no more bitcoin to be mined.
While mining is significantly less lucrative than it was at the start of the week, it's still pretty lucrative for those with the computing power to perform it (bitcoin is trading at just under $9k USD right now).
Wanna chat more about the bitcoin halving? Email me at info@blockchainblawg.com or tweet me @blockchainblawg.
Unlike U.S. currency, which is physically made in the U.S. Bureau of Engraving and Printing or the U.S. Mint, bitcoin is mined. What this means is that bitcoin comes into digital existence when a person earns it by mining. Mining is essentially the process of solving complex problems that serve to verify blocks of transactions on the bitcoin blockchain (you still following?). So when a person, known as a miner, successfully solves the problem that serves to verify a block of transactions, that person receives a reward in the form of bitcoin. Prior to Monday, May 11 at approximately 3:23 pm est, miners received 12.5 bitcoin for solving those problems. And then the halving occurred. Going forward, miners will only receive half of that amount--6.25 bitcoin. So that's the significance of "the halving"--less bitcoin for performing the work needed to verify transactions.
The halving is part of the network's protocol and will happen again and again at predetermined intervals. Bitcoin was designed to eventually have a total circulation of 21 million bitcoin so eventually there will come a point when there are no more bitcoin to be mined.
While mining is significantly less lucrative than it was at the start of the week, it's still pretty lucrative for those with the computing power to perform it (bitcoin is trading at just under $9k USD right now).
Wanna chat more about the bitcoin halving? Email me at info@blockchainblawg.com or tweet me @blockchainblawg.
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