Home / News From Nigeria / Breaking News / #BitcoinHalving2020: Will Bitcoin hit ₦36mln($100k) mark after the 2020 Halving?
Bitcoin halving 2020

#BitcoinHalving2020: Will Bitcoin hit ₦36mln($100k) mark after the 2020 Halving?

 Bitcoin saw massive growth after the 2016 halving.

Will Bitcoin skyrocket after the 2020 Halving like in 2016?

On May 20th 2020, the 3rd Bitcoin halving will occur. 50% less Bitcoins is going to be generated every 10 minutes and this can change the worthiness of Bitcoin Forever.

This is known as a “Halving” and it has occurred twice, everytime boosting Bitcoins price by at the least 10x. Despite increased awareness over Bitcoin, not a lot of people be seemingly speaking frankly about this.

Today Buy BitCoins In Nigeria Blog (BBNB) will explain the Bitcoin Halving, how it might affect Bitcoins price and what to expect.

A deflationary currency:

A deflationary currency

Bitcoin operates on a mode of deflation. This implies less Bitcoins is going to be made as time passes and eventually the supply will stop.

The supply will end when the last Bitcoin is mined in the season 2140. Bitcoins supply is limited by 21 million units by its integrated algorithm, a maximum of that amount can ever exist.

This is dissimilar to fiat currencies which use an inflationary model. Inflation is the type where central banks can print extra units of currency at will. Only a limited amount of Bitcoin exist, hence it can only be “mined” and not created.Bitcoins deflation makes it scarce and as we know, when something is scarce, it has more value.

Block rewards:

Block rewards halving

Bitcoins are generated each time a “block” of transactions are solved by miners and put into the Bitcoin blockchain. That is a pricey process, requiring special hardware and plenty of electricity.

In exchange for solving blocks, miners are rewarded with new bitcoins. These bitcoins are awarded by the Bitcoin algorithm and they’re referred to as the “block rewards ;.

The procedure occurs every 10 minutes, so in a nutshell, every 10 minutes new bitcoins are made.

Bitcoins first block reward was 50 BTC. This meant that each 10 minutes a bitcoin miner had 50 bitcoins sent with their wallet for confirming a transaction.

This is in bitcoins early days when it was less than the usual dollar and anybody with a notebook or computer could mine it. Nowadays miners don’t make what they did back then.

The present block reward is 12.5 BTC, that is because of the block reward being cut in two (or halved), twice.This feature is programmed into Bitcoin and occurs every 4 years (210,000 blocks).

This will continue before last bitcoin is mined in 2140.

Another “halving ” is set to take place 6 months from now, reducing the block reward to 6.25 BTC every 10 minutes. Another halving could change Bitcoins price forever, like previous halvings have done.

Before we move ahead, lets quickly look at more factors that affect Bitcoins value and could amplify the halving’s effect.

Mining difficulty & mining pools

Mining difficulty & mining pools

Reduced block rewards aren’t the sole factor affecting Bitcoin’s scarcity.

It is harder now than it had been previously to fix blocks and generate bitcoins. This is as a result of mining difficulty increasing as more miners join the network.

Increased difficulty means miners need better hardware to fix the cryptographic algorithms.

Increased difficulty has generated miners using “mining pools” to collectively solve blocks and share the block reward. A mining pool is just a network of miners who share their processing power and split the block reward.

The block reward is shared equally, based on the quantity of power each miner contributed towards finding and solving a block.

Lets take Slushpool as an example which currently has 15,700 active users who’ll share the 12.5 BTC block reward when they locate a block.  

(BTC Price: ₦2,880,000×12.5= ₦36,000,000  {$8000 x 12.5 = $100,000}‬).

For the sake with this example lets say every worker contributed the precise quantity of processing power. That will net each user  ₦2,292.99($6.37) or 0.00083 BTC for each and every block they mined.

BTC Price divided by 15,700 users  ₦36,000,000/15,700= ₦2,292.99 ($100,000/15,700 = $6.37).

Block Reward (12.5 BTC) divided by 15,700 workers (12.5/15700 = 0.00079 BTC)

This 15,700 strong mining pool would earn it’s workers only a little under $10 for each and every block they solved if their resources were pooled equally.

This can be a far cry from the ₦36,000,000 {$100,000} (12.5 BTC) block reward.

Bitcoin Halvings and the price tag on Bitcoin

The block reward halving has already established positive longterm effects on the price tag on bitcoin. There are numerous theories why this happens nevertheless the simplest reason is supply and demand.

When fewer bitcoins are now being generated, this increased scarcity makes them more valuable.

After next years halving, the block reward will be reduced from 12.5 BTC to 6.25 BTC. At todays price of 2,880,000 ($8000) per Bitcoin that’s 18,000,000 ($50,000)

We’ll use my previous example from the “Mining difficulty & mining pools” section again. Lets have a pool of 15,700 miners (Slushpool) who’ll share the 6.25 BTC block reward when they locate a block.

(BTC Price: 2,880,000x 6.25 ($11,450 x 6.25) = 18,000,000 ($50,000)

For the sake with this example lets say every worker contributed the precise quantity of processing power. That will net each user 1,146.49 ($3.19) or 0.00039 BTC for each and every block they mined.

BTC Price divided by 15,700 users: 18,000,000 /15,700=  1,146.49 (50,000/15,700 = $3.19).

Block Reward (6.25 BTC) divided by 15,700 workers: (6.25/15700 = 0.00039 BTC)

This 15,700 strong mining pool would now earn it’s users only a little under  1,146.49 ( $3.19) for each and every block they solved, if their resources were pooled equally. That is half compared to rounded off quantity of $10 from the last example.

How the halving will affect Bitcoins price

2012 Bitcoin Halving

After the halving, miners who don’t find it profitable to mine anymore will give up. Most miners will continue to mine and will only sell their bitcoins at a profitable rate, thus increasing Bitcoins asking price.

If we look at previous halvings, we can see how Bitcoin’s price was affected.

The First Bitcoin Halving

The first ever halving occurred on November 28th 2012 when one BTC was worth around 1,742.17 ($11). A year later, bitcoins price surged to a tasty 173,800 ($1,100) in 2013, a cost nothing you’ve seen before with Bitcoin.

It had only been 12 months considering that the halving and Bitcoin had grown 100x.

Bitcoins price eventually fell to around 33,000 ($220) and it remained below 158,000 ($1,000) for another few years. Even at its bottom Bitcoin was still up about 20x from its price prior to the halving.

 2012 Bitcoin Halving

The 2012 block halving was the first halving. It was mined by SlushPool by someone using a Radeon HD 5800 miner.

New BTC Per Block Before: 50 BTC per block
New BTC Per Block After: 25 BTC per block
Price on Halving Day: ₦1,948.07 ($12.3)
Price 150 Days Later: ₦20,032.85 ($127.00)

The Second Halving

The 2nd halving took place July 2016. Bitcoin maintained a price tag of around ₦180,000- 210,000 ($600–$700) before flying to 7,000,000 ($20,000) in the fantastic bullrun of 2017.

Bitcoin had grown over 33x from it’s price before the 2nd halving and over 1,818x from its price before the first halving.

The Third Halving and what to anticipate

With another halving only around 6 months away, so what can we expect to take place to Bitcoins price?

I think it will follow previous trends by reaching a new all-time-high after a year. Bitcoin could likely hit a 10x from its price prior to the halving, so 36 mln ($100k) looks possible to me.

Kraken CEO, Jesse Powell is apparently optimistic about Bitcoin reaching 36 mln ($100k) following the halving. He believes Bitcoin will reach 36 mln ($100k) or 360mln  ($1m price tag.)

Anthony “Pomp” Pompliano, co-founder of Morgan Creek Digital Assets, also believes that Bitcoin could reach $100,000 by 2021.

“Supply-Demand economics remain valid,” said Pomp. “They’re a good way to find out industry price. So, if the demand for a fixed-supply asset increases, we continue steadily to see price appreciation.”

Pomp continued to state, “one of many largest drivers of the demand or upsurge in scarcity could be the halving in-may 2020 that we think will be considered a big moment.”

You will see Pomp’s prediction in the tweet below:

 Pomp & Jesse’s predictions of a 36 mln ($100k) Bitcoin by 2021 don’t seem far fetched if you ask me, it’s only 5x from Bitcoin’s previous ATH of $20,000.

However we will need to wait and see how a crypto market responds following the halving.

Bookmark this story and check again in 2021 to see if Bitcoin hits the 36 mln ($100k) mark.

Increased public awareness may also result in a trend of FOMO buying that could push BTC’s price higher.

Third Generation and Web 3.0 blockchains may cause increased curiosity about cryptocurrencies. This will then translate into wealth being transferred to a variety of altcoins.

We will in all probability see a huge rise in the worthiness of bitcoin annually following the 2020 halving. Other cryptocurrencies will quickly follow, crossing their previous all time highs.

BBNB

Send Money To Nigeria Free

About scully009

Get Daily Altcoins trade Signals. Password to the link can only be handed over to viewers via the whatsapp group link. To get Password to the Link Join the group link and ask for password- https://bit.ly/2rIqsTx (Telegram) https://bit.ly/2IBGeJt (Whatapp)
x

Check Also

bitcoins halving

What is Bitcoin Halving?

What’s the Bitcoin Halving? New Bitcoins are issued by the Bitcoin network every 10 minutes. For the very first four years of Bitcoin’s existence, the quantity of new bitcoins issued every 10 minutes was 50. Every four years, this number is cut in half. The day that the quantity halves is known as a “halving “. In 2012, the quantity of new bitcoins issued every 10 minutes dropped from 50 bitcoins to 25. In 2016, it dropped from 25 to ...