Bitcoin Halving 2024, what does it mean?

I'm pretty sure you've seen a tweet about Bitcoin Halving in 2024. Everyone is super excited and could be the start of the bullrun. But what does bitcoin halving actually mean? Let dive into that.

Before we begin, bookmark and RT this post. So that you can always find this information again. Let start!

BITCOIN KEY ‘CONCEPTS’ If you understand these subjects, you will be ready for the #bitcoin halving:
- Basics of Bitcoin blockchain
- Bitcoin Mining
- Bitcoin Supply
- What is Bitcoin halving
- Why does it happen
- Price effects

BLOCKCHAIN

The Bitcoin chain is basically just a live record of all Bitcoin transactions sent from one to another. These are placed one by one in an 'index'. Once a certain number of transactions is reached, a 'block' is formed. Each block can store a maximum number of data.

Then another new block is created. This creates a "chain" of multiple “blocks". In simple terms, they are groups of transactions linked together. The structure of bitcoin is that computers around the world are linked together to verify these transactions.

BITCOIN MINING

Bitcoin mining is the process that takes place on computers to verify transactions. The computers that make this possible (connected to the network) are called Miners.

Miners are rewarded with bitcoin every time a new block is verified with transactions. The rewards are a combination of
- Newly minted bitcoin
- Transaction fees

The total supply of #Bitcoin is 21 Million. Currently, there are about 19.3 million bitcoin in circulation. But they expect the last bitcoin to be minted in the year 2140. So you have so much time hehe ;)

WHAT IS #BITCOIN

HALVING? In short, it is halving the rewards for bitcoin mining. Currently, a block reward (verified) for miners is 6.25 BTC, so this is going to be 3.125 BTC in 2024.

WHY BITCOIN HALVING?

It has never been made clear by Satoshi Nakamoto (creator of Bitcoin) why the halving occurs. Many traders say it causes effects on the price and is most likely positive. The less BTC enters the market the more it causes Bitcoin to increase in value.

As mentioned earlier, two things are set in stone for bitcoin:
- There are up to 21 million bitcoins
- Last share of bitcoin will be minted around 2140.

That makes Bitcoin's inflation transparent.

One conclusion you can draw immediately is that inflation is only decreasing. Instead of your money becoming worth less, as with ECB monetary inflation, you see the bitcoins being added less and less. That, in theory, is a recipe for increasing value.

PRICE EFFECTS

If you look back at the history of halving you don't see much difference in the first few months. After 12-18 months after the halving we see huge increases in the price. The increase in price is not necessarily directly related to bitcoin halving.

There are of course many more external factors. Think Media, Economy, Covid (at the time) and many more.