BitCoin plans on the next big thing in 2020, known as halving, which will cut the manufacturing of cryptocurrency by fifty percent.
What Does BitCoin Mean By Halving?
BitCoin is a form of cryptocurrency, which is any form of online funds that is utilized without a central bank. With halving, no individual or group is responsible for controlling the halving process. The regulation was added into BitCoin’s computer program, by its founder Satoshi Nakamoto, over ten years ago.
BitCoin announced that the event is expected to take place in May 2020, where the halving process would begin. This would reduce the number of new BitCoins attained by BTC miners, by fifty percent. The BTC miners make up the entirety supply of cryptocurrency through the resolution of complex mathematical questions.
The halving process is considered to be a significant change in the cryptocurrency market, worth approximately 120 billion dollars. According to the market forecast, BitCoin prices are likely to increase significantly, and by contrast, there will be a significant decline in the value of cryptocurrencies. This is an expected forecast, due to the halving process, which occurs about every four years. There is a purpose of the halving process, which is to control inflation on cryptocurrency and to maintain the number of BitCoins in the market.
Cryptocurrency Value Goes Down
There is a decline in BitCoin’s manufacture, which is the cause of why digital currencies are unaccepted and unrecognized by financial markets and entities. The value of the currencies is defined by technological approaches, and unaffected by the regulations of economy. The rule of economics stated that if there is no supply, and demand remains in the same rate, then the prices must increase.
According to the news agency, Reuters, who interviewed seven traders of cryptocurrency, the halving process will cause higher price unpredictability. Furthermore, since there will be a little supply, then the price of cryptocurrency will sharply rise or fall in the process.
BitCoin miners will accept a selected number of BTC, which are currently 12.5. The next halving process will occur in May, where the quantity will reduce to 6.25. The past two halving processes took place in November 2012, and in July 2016. In the year that followed, BTC’s value increased close to eighty times and four times in 2016.
Such unpredictability in BitCoin markets is usually for beneficial for traders who are employed in high-technology cryptocurrency industry because they can gain from a small difference in price.