On Monday, May 11, 2020, a Bitcoin event is set to take place that could affect the entire world of cryptocurrency. The event is scheduled, and it’s happened before. The event will automatically cut the reward given to Bitcoin miners for completing Bitcoin transactions. In essence, it’ll be more difficult for people to profit from running computers to earn Bitcoin. The effect this will have on the value of Bitcoin is yet unknown.
There will only ever be 21 million Bitcoin in the world. Bitcoin is code – you can “own” a fraction of a Bitcoin. There is a finine amount of potential Bitcoin code in the world – and it’s not yet been created in its entirety.
Each time a person wants to transfer Bitcoin from one place to another, a request is made to all “Bitcoin miner” computers around the world. These computers solve complex calculations to allow the Bitcoin (code) to transfer from one place to another, and the computer that processes the data first gets the reward.
As we get closer to the point at which all Bitcoin code is created, and all Bitcoins are mined, the reward for mining Bitcoin gets smaller. Miners will soon need to work more to get the same reward as before. As it’ll be more difficult to obtain Bitcoin via computation work, it could follow that Bitcoin value (to investors) goes up. But the halving only happens once every 4-or-so years – and a lot can change in that amount of time. What happened last time might not be what happens this time – we shall see, later today!
UPDATE: Coinbase readings showed Bitcoin vs USD pricing at around 9,500 (USD per 1 Bitcoin). Here at around 16:15 on Monday, May 11, the price is around 8,657 (USD per 1 Bitcoin). UPDATE: The halving is complete! Just 1385 days until the next Bitcoin halving – that’s February 26, 2024.