By now we guess that you have heard of Bitcoin, the most famous blockchain in the world. Created in 2008 and put into operation since 2009, it is the cryptocurrency that started an era of disruption in terms of money and today it is one of the most coveted and most valuable.

The price of bitcoin has beenvery volatile since its inception, and one of the factors for this to happen is the cost/benefit of mining the cryptocurrency. In its beginnings, the energy cost a miner had to face was low and the reward was high, you got 8 times more bitcoins every 10 minutes (that's how long it takes approximately to mine a block) than you get today. That changed and will continue to change.

Every 4 years there is a special event for the crypto community called bitcoin halving. If you are taking your first steps in the world of cryptocurrencies maybe you heard about this, but many people don't understand what it is about or why it is important. Let us explain it to you in an easy way.

What is Halving?

What makes bitcoin special compared to other cryptocurrencies is that since its inception it has a deflationary nature. Halving has to do with the scarcity of bitcoins. We know that only 21 million bitcoins will exist and that this amount is programmed into the source code. But these bitcoins must be "mined" or discovered bit by bit and at an ever-increasing cost. That is where halving comes in.

At the origin of crypto-times, back in 2009, when a miner discovered a block on the network he received 50 BTC as a reward. Satoshi Nakamoto, the late creator of Bitcoin, established that this reward would be halved every 210 thousand blocks, which is equivalent to approximately 4 years. This event gave rise to the name halving in English or "halving" in Creole.

How many times did halving happen?

Now you know that this event happens every 4 years, like the World Cup. The first time it happened, in 2012, the reward was reduced from 50 to 25 bitcoins. The second time, in 2016, it dropped from 25 to 12.5.

This year will be the fourth halving and the reward per block will drop from 6.25 (current reward) to just 3.125 bitcoins. According to our estimates, this is estimated to happen in mid-April.

What is the importance of halving?

Halving has a direct effect on supply and demand. As new bitcoin units come into circulation over time, it becomes an increasingly scarce asset. And we know from economic law (or common sense) that when something becomes scarce, its price tends to rise.

So when halving occurs, it generates upward pressure on the price of bitcoin. In fact, historically the price of bitcoin usually has bullish rallies after each halving.

But the most interesting aspect of halving is that it reinforces one of bitcoin's principles: finite, programmed issuance. By reducing monetary issuance over time, it limits the ability of a few to control the money supply as is the case today with fiat currencies.

In summary, the Bitcoin halving should not be seen as a simple software update, it is an event that reaffirms the values of the community: Decentralization and Economic Freedom, values that Crypto NEA supports by spreading the word about this technology in Northeastern Argentina.

If you have any questions or want to learn more, you can join our community and contact our team in our networks.