Satoshi Nakamoto, the anonymous maker behind Bitcoin, built a system in this currency to ensure that it behaves more like a commodity like silver or gold rather than flat currencies like Dollar.
The reason for this is that; flat currencies can always be printed in more quantities by the Central banks that hold them whenever the need arises. If Bitcoin was ever to be accepted as a valuable enabling entity for transactions, it needed to have a certain limit to where it could exist.
Satoshi put that limit to 21 million and regulated it via “Halving Events”.
To get Bitcoin
, in the simplest sense, you need computers that can solve and record transactions before a block in the “blockchain” can be generated. Each new block generated brings with a reward in the form of Bitcoins.
With every 210,000 blocks added, the system induces a halving event, where the total number of Bitcoins per new block added is reduced to exactly half.
Currently, the system offers 12.5 Bitcoins for solving a single block. After the next halving event, you will get just 6.25 Bitcoins for solving a single block.
Halving events have known to always have a big impact on the value of Bitcoins in the long run so its an important event that any pro-Bitcoin miner shouldn’t ignore.
For e.g. when the last Bitcoin Halving event occurred in 2016, there was no rise in the value of the Bitcoin immediately, but by the end of 2017, as the whole world knows by now, the value of Bitcoin touched the meteoric $20,000 mark that led to frenzied interest in to how this whole new currency and the system that entails it, work.
And as the cost of electricity rises in different areas across the world making Bitcoin mining an increasingly difficult task to pull off profitably, this Bitcoin halving event will surely be the single most important event in the history of this currency and miners concurrently. It will determine whether you can continue mining on a small scale or you need to run enormous “mining farms” to even break even.
For small scale miners, this is the best time to step on the gas and ramp up mining efforts till the halving event, because after that, the profitability in this task at the small scale will likely be low margin for them to continue.
Here are 3 things you need to do if you want to benefit off this halving event:
If possible, relocate to an area in your country with the lowest electricity rates. The best areas for this are the ones which often are powered by hydro-energy, as it’s the least costly form of producing electricity. Or ramp up production in winters, when energy consumption is low along with rates.
Invest in the best bitcoin miners
. With the rates of electricity going high, you need better systems that can run more powerful hash rates to get to profitability closer. There is a lot of specialized equipment like this available in the market, so choose the one that fits your bills in the best way possible.
If possible, aside from money, try to buy bitcoins. The value is stable right now and is slated to not encounter any major volatility soon, so the best time to buy them is right now so that you can benefit off of mining as well as these Bitcoins you’ve bought once the price starts to rise post the halving event.
The next halving event presents an opportunity as well as a threat, both of which are time-bound, and now it depends on your efforts to land on either side.
With 6 blocks being mined each hour, the estimated date for the halving event is set on around May 24, 2020, which means that you have less than a year before Bitcoin mining becomes practically infeasible to continue on small-time mining farms. So make hay while it lasts.