Why Bitcoin Halving Is a Big Deal (And When It’s Happening Next)

Bitcoin is a common crypto-currency that is being used by many individuals in Nigeria and the entire world. There are individuals who save money in Bitcoin, there are individuals who use it in business and some trade it to gain profit. However, there is something highly important that takes place in the Bitcoin world once every four years. It is referred to as Bitcoin halving and this has an extremely great role in influencing the price of the Bitcoin in either a rising or a dropping price. It also influences the amount of new Bitcoin to be created. In this write-up, I shall give in very simple terms what Bitcoin halving is, why it is a big deal and when will it occur again. I shall also tell you what it means to you as an individual residing in Nigeria, more so, when you have developed interest in investing or trading with Bitcoin.

So, we shall begin by the beginning. Bitcoin is a kind of money, which you are not able to take in hand. It does not resemble naira or dollar. Bitcoin is completely digitalized. you will be able to send money to another person in a different state or even a different country and the person will have received the money in few minutes. No bank or government has control over Bitcoin. Rather, it operates on a special system referred to as blockchain. This system captures all transactions that are done with Bitcoin and it ensures that no one cheats.

How, then, is Bitcoin made? Bitcoin can be mined. Mining is a process in which challenging calculations in mathematics done through powerful computers that verify the Bitcoin transactions. After a computer finds a solution to the problem it receives a certain amount of Bitcoin. This is the way when new Bitcoin appears into the system. However, there is something worthwhile to learn because there will never be more than 21 million Bitcoins. No more. Up to date, there are already more than 19 million that were already mined. That implies that there are approximately 2 million Bitcoin left.

It is time to discuss Bitcoin halving. This is the usual part of the story. Each time miners have generated 210,000 blocks (which is just around 4 years time), the reward they receive is halved. This is what they refer to as halving. It merely translates to mean the act of making something into two. Using this example, a miner is receiving 6.25 Bitcoin reward per job, after halving the miners will now receive 3.125 Bitcoin per job. Such a cutting is on repeat after every four years until the entire 21 million of the Bitcoins are mined.

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What is the significance of this? This is due to the fact that when new Bitcoins are generated at a lower rate, then supply will be less. However, in case more people want to purchase Bitcoin, the price will increase. That is the way the Bitcoin halving has an influence on the price. It renders Bitcoin scarcer and due to this reason, the value tends to raise following each halving. I will just give you some real examples.

Bitcoin halving took place in 2012. Prior to that halving, mining reward was 50 Bitcoin. It was divided in half and then went to 25 Bitcoin. The price of Bitcoin prior to its 2012 halving sat at about 12 dollars. The price immediately increased to more than 100 dollars a few months after halving.

The next halving took place in 2016. Mining reward was changed to 25 to 12.5 Bitcoin. At that halving, the value of Bitcoin was roughly 650 dollars. Several months after, it hit close to 20 thousand dollars in the year 2017.

Halfing has been done the third time in 2020. The payout was lowered to 6.25 Bitcoin as opposed to 12.5. The price of the Bitcoin used to be approximately $9,000 before this halving. It even reached 69,000 dollars in the year 2021.

As you can observe, the concept of Bitcoin halving is closely related to the increase of price. Whenever the reward decreases and there are less Bitcoin to be obtained, it tends to increase the price later. That is why Bitcoin halving is a major event among the investors, traders, and all who are interested in cryptocurrency.

So, what about the next halving of Bitcoin? After this, the remaining halving will occur in April 2028. This is attributed to the fact that the final halving will have occurred a few months ago i.e. in April 2024 and that halvings occur after every four years. By the next halving in 2028, the mining reward will be slashed to 1.5625 Bitcoin. It will mean that the miners will receive even less Bitcoin. This will render Bitcoin even rarer.

So, how does this affect you as a Nigerian? This implies that when intending to invest or purchase Bitcoin, you have to learn how to deal with halving. There are a lot of those who want to purchase Bitcoin prior to halving in order to sell it when the price increases after halving. Yet you have to watch yourself, too. Still, Bitcoin is also a gamble and the value of Bitcoin may pick up and fall swiftly. And do not risk anything you do not have money to lose.

Moreover, being a Nigerian, the Bitcoin can aid you in protecting against inflation. Over the years our naira has been deteriorating. In 2015, 1 dollar was 200 naira. As at today, it is more than 1500 naira. However, as time goes on, Bitcoin has been gaining in value. Bitcoin has now been viewed as a means of saving money by so many Nigerians. The value may increase and even when the naira collapses you will have more money.

But you have to be smart. Do not get into the hurry of purchasing Bitcoin due to hype. Acquire knowledge about the safe crypto wallet usage, prevention of scam, and reliable platforms. In addition, understand when to sell and when to purchase. Often, the best time to get Bitcoin is before it is halved and not when the price is already high. That is the way intelligent investors position themselves to take the next opportunity.

To recap it all, Bitcoin halving is a rather significant process that occurs once in four years. It halves the incentive that is given to miners and decreases the fresh Bitcoin that are introduced into the market. Due to this reason, there is an increase in the price of Bitcoin following every halving. This has been experienced in the years 2012, 2016, and 2020. The following halving is schedule to happen in 2028. This is a very big opportunity to know more about the Bitcoin and even multiply your money as a Nigerian. However, you should be prudent, make good research and make investments.

Usually, when people get into the Bitcoin, they immediately decide to work with it, but they should get to know how it works. Pay attention to crypto stories, learn from other smarter individuals, and do not put all your money in it. Take it slowly, take your time, and think long-run. Bitcoin halving appears to be a modest matter, however, its future implication on the cryptocurrency future world is huge.