Sign In
Learn bits
Science & Tech.
Mahesh

27/02/24 08:28 AM IST

Bitcoin Halving

In News
  • As athletes train for the 2024 Games in Paris this summer, crypto traders and Bitcoin miners are preparing for what is known as the ‘Bitcoin Halving’—predicted to happen in April.
Bitcoin Halving
  • The Bitcoin Halving refers to the 50% reduction in the reward paid to Bitcoin miners who successfully process other people’s cryptocurrency transactions so that they can be added to the public digital ledger known as the blockchain.
  • In order to “grow” Bitcoin’s blockchain and keep the ecosystem running, Bitcoin miners rely on advanced computer equipment to solve a complex mathematical puzzle through a process known as ‘Proof of work.’
  • This intense activity is the reason Bitcoin transactions result in huge carbon footprints and require vast amount of electricity.
  • No real mining is carried out.
  • The Bitcoin miners with cutting-edge computer equipment, working on an industrial scale, are most likely to solve the puzzle first and claim their prize, which is currently set at 6.25 Bitcoin (BTC).
  • While the reward amount is set, the true value of this prize fluctuates based on BTC prices in the market, and when the owner chooses to sell.
Significance
  • Bitcoin mining increases the supply of BTC in circulation while the Bitcoin Halving reduces the rate at which these coins are released, making the asset more scarce. Scarcity is seen as pushing up prices, as is the case with gold.
  • While there can only ever be 21 million BTC in the world, over 19 million have already been “mined” or released.
  • This sounds like the end of the story, but the Bitcoin Halving means it will take far more time for the remaining coins to be mined.
  • A halving takes place after 2,10,000 blocks are mined, and has happened so far in 2012, 2016, and 2020 - every four years.
  • In 2009, a successful Bitcoin miner could claim a prize of 50 BTC. After this year’s halving, they will only get 3.125 BTC.
  • Both corporate and independent Bitcoin miners are spread across the world, trying to leverage cheap electricity prices in countries like Kazakhstan and Iran to mine as much Bitcoin as they can.
  • China was originally home to many of the world’s crypto miners, but government crackdowns triggered an exodus to other countries.
Source- The Hindu

More Related Current Affairs View All

09 Aug

Cabinet approves continuation of Targeted Subsidy for Pradhan Mantri Ujjwala Yojana Consumers

'The government has approved the continuation of targeted subsidies for Pradhan Mantri Ujjwala Yojana consumers for the year 2025-26 with the estimated cost of over 12 thousand cro

Read More

09 Aug

Cabinet approves Budgetary Support for Multidisciplinary Education and Research improvement in Technical Education (MERITE) Scheme

'The Union Cabinet has approved a proposal to implement the Multidisciplinary Education and Research Improvement in Technical Education (MERITE) scheme in 275 institutions across t

Read More

09 Aug

Aircraft Accident Investigation Bureau (AAIB)

' A month after the deadly Air India flight crash in Ahmedabad, where 241 of the 242 people onboard flight AI 171 died, the Aircraft Accident Investigation Bureau (AAIB) released a

Read More

India’s First Ai-Driven Magazine Generator

Generate Your Custom Current Affairs Magazine using our AI in just 3 steps