One-third of cryptocurrency users don't know the truth about halving

This topic is so important these days since the halving is just a couple of days away. A lot of write-ups and articles have been written to address this particular topic. Many have diverse opinions concerning the purpose what halving means and what purposes it serves in the like of cryptocurrency and the phase. https://img.inleo.io/DQmTLHsyk6EXiZjw5gSNWMsXr5UyT174UVRZAJvvbodWBB4/images%20(34).jpeg source

So what is halving

In as much, as we might have some similar definitions of the term our perspectives and approaches surely differ. My opinion might be slightly different from other cryptocurrency users or let me say, investors.

To me, I will say halving is a reward for miners which is halved for every 210,000 blocks produced. This phenomenon occurs approximately every four years to slow down the issuance of Bitcoin until the total amount reaches 21 million.

As of the moment, if I'm correct about the statistics, more than 19 million Bitcoins have been mined, and less than 2 million remain to be mined. This mechanism was set up by Bitcoin founder Satoshi Nakamoto to make Bitcoin more scarce and avoid flooding like traditional currencies. Even though I'm not good with figures I'm sure by 2140, the last Bitcoin will be mined, and no more will be issued after that. This may lead to a certain deflation, which will push up prices. At that time, miners could only make money from transaction fees.

Why is having so popular?

I believe halving is so important because it has a way of shaping BTC and other cryptocurrencies. Every halving in history has led to an increase in demand for Bitcoin, which directly drives up prices. Halving is also closely related to the bull market cycle of the digital currency market.

Every four years

I haven't heard about halving taking place beyond or before four years. Halving is usually four years. However, I read that a stronger network may delay the halving. Maybe truth or false I couldn't be so sure.

Historical halvings and their impacts

If we are to follow the history of cryptocurrency there has been a sudden reduction in price before halving and a huge surge in price after the halving. For example, after the halvings in 2012, 2016, and 2020, the price of Bitcoin shaped sharply and reached new all-time highs. However the situation is different each time, and factors such as market sentiment and macroeconomic conditions might affect the price.

Does halving come with its risk

We shouldn't forget that life itself is a risk. Waking up everyday single day is just something we couldn't fight none be so sure of. Even though many cryptocurrency investors see Halving as a period which is often characterised as positive since it affects the price in an upward trend. However, many have forgotten that the period also has its shortcomings as it may cause sharp market fluctuations in the short term and may even extend a bit after halving. It is worthwhile to know that if market expectations are not met, the price of Bitcoin may be temporarily adjusted and the effect of these is unknown. No one can predict correctly the actual price of BTC before the halving. As of the moment, it is not surprising to see many users dumping their BTC owing to the fear that BTC might dip further

Do we need to bother about the halving events

I don't think there is cause for alarm or panic. This is a foreseeable event and of course, it is something we would witness every four years. However, holders have to pay attention to possible market fluctuations before and after the halving and make decisions based on their own risk tolerance and investment goals.

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Posted Using InLeo Alpha

Posted Using InLeo Alpha