To many the term halving is something they have failed to get their minds around, due to the economies that in involved in it, and since I believe many didn’t take or even are not taking economies as a subject of their studies, in this post am going to try my best to put the term halving in its best and simplest form possible so that we can all get to fully understand what it is and why its important in the cryptocurrency world
Halving is when the reward for mining a cryptocurrency transaction is cut into half. This event not only cuts the transactions in half, but it also cuts half the inflation of the crypto coin's inflation rate and the rate at which the new coins enter circulation.
Cryptocurrencies companies use this synthetic form of inflation that halves until all coins are released and are in circulation.
The reason companies do this, is to reduce the number of the coins in circulation as most times prices of products and commodities are always likely to go up when those products or commodities are scarce on the market, just like the theory of supply and demand in economics. When the supply of the product is high and the demand is low, the prices of that product go lower, and when the demand is high and the supply is low, the prices go higher
Thanks for reading and I hope that you all fully understand what halving in and why its important