Bitcoin's historic 'halving': Why crypto experts are expecting a second explosion in value
Cryptocurrency make experience a resurgence after Bitcoin experienced its historic "halving" event.
Bitcoin could be back on the agenda for plucky investors after the infamous cryptocurrency experienced a triggered "halving" event this morning.
At 5.23am AEST the cryptocurrency produced its 630,000th block and triggered the third-ever halving event in Bitcoin's 11-year history.
In a nutshell, Bitcoin "halves" roughly every four years as a way to reduce the reward given to programmers who "mine" the currency using high-powered computers and complex algorithms.
Bitcoins are mined by specialised computer hardware which solves algorithms (or "blocks") on a central banking sheet known as a blockchain.
To keep the value of existing Bitcoins, every 210,000 blocks the reward given for mining halves as a way of artifical inflation.
Only 21 million Bitcoins will ever be generated by the network, prompting some experts to believe that a second bull run of value is on the cards.
"History teaches us that after this post-halving drop in price, there is a subsequent bull run," CEO and founder of deVere Group Nigel Green said.
"Previous Bitcoin halving events have prompted impressive price climbs. The 2016 halving triggered a 300 per cent jump in the value of Bitcoin.
"There is no reason to believe this time the market will not respond with a longer-term upward trajectory."
Currently Bitcoin is trading at just under A$13,500 per coin. If Mr Green's forecast of a 300 per cent rise comes true that value could skyrocket up to more than $40,000 per coin.
Mr Green believes that current unrest over governments handling the COVID-19 pandemic could also push some investors towards decentralised currencies like Bitcoin.
"Traditional currencies are devalued and inflation fears rise on the back of the mass printing of money, the likes of which we have recently seen in the US, where the nation's central bank has added trillions of dollars to the money supply," Mr Green said.
"Such measures will inevitably encourage even more investors to consider decentralised, non-sovereign digital currencies.
"Looking ahead beyond the halving event, cryptocurrencies are increasingly becoming regarded as the future of money due to the real-world issues they address and growing mass adoption."
Explained simply: What is Bitcoin?
- Bitcoin is a form of online cryptocurrency that allows money to be transferred electronically. It's decentralised, which means no-one regulates or controls it except for market demand.
- It was created by a group (or a single person) of programmers under the pseudonym "Satoshi Nakamoto" in 2009.
- Bitcoins are "mined" by computers that solve incredibly complex mathematical equations. Like coal or oil, there is a limited number of Bitcoins available to be mined, estimated to be in the ballpark of 21 million.
- You cannot mine Bitcoin on your home computer, it requires specialised programs and hardware that have increased the difficulty of mining a Bitcoin.
- Bitcoin experienced a dramatic explosion in value in late 2017, before it experienced one of the most catastrophic value crashes ever seen in currency.
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