How to prepare for bitcoin halving?

Every 4 years (on average every 210 thousand blocks) the reward that Bitcoin miners receive foradding a block to the blockchain is halved. Bitcoin halving was created by Satoshi Nakamoto to control inflation.

Since the average block calculation time in the networkis 10 minutes, then 210,000 blocks are calculated for 21,000,000 minutes, or 4 years. The last halving took place during the extraction of block No. 420,000 on July 9, 2016. For block No. 419,999, an award was received in the amount of 25 bitcoins, while block No. 420,000 brought to the miner only 12.5 bitcoins.

One of the most characteristic features of Bitcoin is its limited supply. 

 

Mining new coins increases supply, whichin turn, inevitably increases inflation. If supply grows at the same rate as the number of people using the asset, then prices remain the same. If the price does not rise as quickly as demand, deflation will occur and previously purchased coins will become more expensive. 

If demand remains the same, increasing supply theoretically reduces the price. This means that if demand remained constant, the price would have to decline more slowly after halving.

It is generally agreed that supply reductionincreases the price. The so-called “stock-to-flow ratio” leaves no doubt that there is a connection between block rewarding halving and rising price. This point of view is rather unilaterally presented in the media, which, of course, increases demand, since everyone wants to profit from an allegedly safe price increase.

An important indicator for Bitcoin halving will befuture Litecoin price change. If the altcoin continues to rise after the halving, it will fuel the Bitcoin halving hype. A decline in LTC price or lack of growth could shake the collective faith in the stock-to-flow theory, which could negate the hype. 

At the time of the last halving, the BTC price fordidn't really hesitate. The network remained stable. The overall hash rate remained unchanged. This suggests that the miners did not turn off their devices due to a decrease in rewards, as many assumed.

Now you understand that halving – no reason to panic. You can accurately track the date of the next halving using numerous services on the Internet.

Based on materialscryptoticker.io