The next bitcoin halving will take place around 13-14 May 2020. Many investors are already speculating on how this event will affect its price and the difficulty of digging. To realize why this is so important for bitcoin, there are a few things to remember about the operation of the network.
Miners are those who replace centralised entities such as banks and maintain the payment network. Without them, the network would not be secured and the bitcoin reward is an incentive for them to do the necessary work of verifying transactions. It consists in adding a specific transaction to a block that will be connected to the main chain in the network.
Halving bitcoin is a process during which the number of coins generated by the network is halved. This causes the number of coins received by miners with each block to drop from 12.5 to 6.25. This is a cyclic process that is repeated regularly every 4 years and lasts until the last bitcoin is extracted. Halving is necessary to keep the number of coins in the network at a certain level. The maximum number of coins in the network after the last bitcoin has been mined is 21 million BTC.
How has the price of bitcoin changed during recent halving?
Bitcoin price a year before the first halving: 2,55$
Bitcoin price a year after the first halving: 1,037$
Bitcoin price a year before the second halving: 268$
The price of bitcoin a year after the second halving: 2,525$
Bitcoin price a year before the third halving: 7,100$
Bitcoin price a year after the third halving: - we'll find out around May 13-14, 2021.
However, as we can see, the decrease in bitcoin supply causes the price of bitcoin to rise sharply over the next year.