Bitcoin Halved! What Happens When ALL 21 Million Bitcoin Are Mined?
Summary
TLDRThis video explains the concept of Bitcoin halving events, which occur approximately every four years. During a halving, the reward for mining new blocks is cut in half, reducing the rate at which new Bitcoins are created. This event impacts the supply and can influence Bitcoin's price. The video details the technical aspects of mining, the fixed supply of 21 million Bitcoins, and the economic principles behind Bitcoin's deflationary nature. It also discusses the potential long-term effects on miners and the price of Bitcoin, while addressing common misconceptions and encouraging viewers to stay informed.
Takeaways
- 🌐 Bitcoin is a blockchain with its own cryptocurrency and has a fixed supply of 21 million coins, which is hardcoded and cannot be changed.
- 🔑 Mining in Bitcoin involves solving cryptographic problems to add blocks to the blockchain and earn rewards in Bitcoin.
- 💰 Every 210,000 blocks, approximately every 4 years, the reward given to miners for adding blocks is halved, known as the Bitcoin halving event.
- ⏱ The Bitcoin difficulty adjusts every 2 weeks to maintain a consistent block addition interval of approximately 10 minutes.
- 📉 The halving process will continue until 2140 when the last Bitcoin is mined, after which no new Bitcoins will be created.
- 📈 The limited supply of Bitcoin and potential loss of coins in inaccessible wallets could make it a deflationary asset, increasing its value over time.
- 💼 Miners are essential to the Bitcoin system, verifying and validating transactions, and will likely rely on transaction fees as their reward once the block rewards end.
- 🤔 The Bitcoin halving event does not require any specific action from Bitcoin holders, and their holdings will not disappear.
- 📊 Historically, Bitcoin's price has reached all-time highs a few weeks after each halving event, although this is not guaranteed for the future.
- 💡 The increase in Bitcoin's value is expected to be driven by transaction fees as the number of transactions grows and the supply becomes more scarce.
- 🏦 The involvement of big players and corporations with Bitcoin ETFs suggests a potential for continued interest and support for the Bitcoin blockchain.
Q & A
What is a Bitcoin halving event?
-A Bitcoin halving event is when the reward that miners receive for adding a block to the Bitcoin blockchain is cut in half. This happens approximately every four years or after every 210,000 blocks are mined.
Why is the Bitcoin halving event important?
-The Bitcoin halving event is important because it controls the rate at which new Bitcoins are created and introduced into the circulation, effectively reducing the inflation rate of Bitcoin over time.
What is the fixed supply of Bitcoin?
-The fixed supply of Bitcoin is 21 million coins, which is hardcoded into the Bitcoin protocol and cannot be changed.
How does the proof of work mechanism in Bitcoin work?
-Proof of work in Bitcoin involves miners competing to solve a cryptographic problem. Once solved, they add a block of transactions to the blockchain and receive a reward in Bitcoin.
Why does the difficulty of mining adjust every two weeks?
-The difficulty adjusts to ensure that a new block is added to the Bitcoin blockchain approximately every 10 minutes, regardless of the total hashing power in the network.
When did the first Bitcoin halving event occur?
-The first Bitcoin halving event occurred in November 2012, reducing the block reward from 50 to 25 Bitcoins.
What will happen when the last Bitcoin is mined in 2140?
-After 2140, when the last Bitcoin is mined, miners will no longer receive block rewards. It is expected that transaction fees will incentivize miners to continue validating transactions and maintaining the blockchain.
How does Bitcoin's deflationary nature affect its value?
-Bitcoin's deflationary nature, with a limited supply and potentially lost coins, suggests that as demand remains constant or increases, the value of Bitcoin could potentially rise.
What is a Bitcoin ETF and how might it influence the Bitcoin halving event?
-A Bitcoin ETF (Exchange-Traded Fund) is a financial product that tracks the price of Bitcoin. It can influence the Bitcoin halving event by increasing accessibility and investment in Bitcoin, potentially affecting its price.
What is the significance of the sender fee in Bitcoin transactions?
-The sender fee in Bitcoin transactions is a transaction fee that goes to the miner who adds the transaction to the block. It is expected to become the primary incentive for miners once the block rewards cease.
How has the Bitcoin halving event historically affected the price of Bitcoin?
-Historically, the price of Bitcoin has reached an all-time high a few weeks after each halving event. However, the correlation is not guaranteed, and other factors can influence the price.
Outlines
🌐 Understanding Bitcoin Halving
This paragraph explains the concept of Bitcoin halving, which is a process where the reward given to miners for adding new blocks to the blockchain is reduced by half every 210,000 blocks, approximately every four years. It clarifies that Bitcoin halving does not cause a user's Bitcoins to disappear or break in half, but rather it's a mechanism to reduce the rate at which new Bitcoins enter circulation. The fixed supply of 21 million Bitcoins is highlighted, along with the importance of proof of work and the difficulty adjustment algorithm that maintains the 10-minute block addition interval. The paragraph also outlines the history of Bitcoin halving events and the progression of block rewards from 50 Bitcoins to the current 6.25 Bitcoins, with a projection towards the final Bitcoin being mined in 2140.
💼 Post-Halving Implications for Bitcoin Miners and Market
The second paragraph delves into the implications of Bitcoin halving for miners and the broader market. It discusses the necessity of miners for maintaining the blockchain and how, as the block reward decreases, miners will increasingly rely on transaction fees to maintain profitability. The paragraph suggests that as Bitcoin's value is expected to rise over time, transaction fees could become a significant incentive for miners. It also touches on the potential for large-scale adoption and the involvement of big players and corporations in the Bitcoin ecosystem. The paragraph addresses the common belief that Bitcoin halving events are followed by price increases, noting the historical pattern of all-time highs post-halving, while also cautioning that past performance is not indicative of future results. It concludes by inviting viewers to share their thoughts on the halving event and its potential impact on Bitcoin's price.
Mindmap
Keywords
💡Bitcoin
💡Halving Event
💡Blockchain
💡Proof of Work
💡Mining
💡Fixed Supply
💡Difficulty Adjustment
💡Transaction Fees
💡Deflationary Asset
💡Bitcoin ETFs
💡All-Time High
Highlights
A Bitcoin halving event is a reduction by 50% of the reward miners receive for adding new blocks to the blockchain.
Bitcoin has a fixed supply of 21 million, which is hardcoded and cannot be changed.
Proof of work is the consensus mechanism where miners solve cryptographic problems to add blocks and receive Bitcoin rewards.
The halving event occurs every 210,000 blocks, approximately every four years.
Bitcoin's difficulty adjustment maintains a consistent 10-minute interval for block addition, regardless of hashing power.
The first halving event reduced the block reward from 50 to 25 Bitcoins.
By 2020, the reward for miners was 6.25 Bitcoins per block, and it will be further reduced with the next halving.
The final Bitcoin will be mined in 2140, after which no new Bitcoins will be created.
Miners will likely rely on transaction fees rather than block rewards to maintain the blockchain after 2140.
Bitcoin's limited supply and potential deflationary nature could increase its value over time.
Approximately 19.6 million Bitcoins have been mined, leaving around 1.3 million to be mined in the next century.
The Bitcoin halving event does not require any action from Bitcoin holders.
Historically, Bitcoin's price has reached an all-time high a few weeks after each halving event.
The price of Bitcoin before the halving event in 2020 reached an all-time high, differing from past patterns.
Bitcoin's price movements are influenced by various factors, including institutional investments and ETFs.
The Bitcoin halving event is a significant aspect of its economic model, affecting miner profitability and potentially its value.
The video encourages viewers to share their thoughts on the halving event and current Bitcoin prices.
Transcripts
what happens during a Bitcoin having
does your Bitcoin break into half or
does it magically disappear it's none of
it let's try and understand what Bitcoin
a halfing event is why it's important
and should you do something about it if
you're new to my channel consider
subscribing and hitting that like button
it would be of great help for me before
we dive in you need to understand a few
things about Bitcoin Bitcoin is a
blockchain it also has its own
cryptocurrency called the Bitcoin
Bitcoin has a fixed supply of 21 million
Bitcoins it is hardcoded into the code
and it can never be changed every year a
fair share of Bitcoin enters into the
circulation this happens because of
proof of work a consensus mechanism of
Bitcoin let me explain mining is a
process in Bitcoin where a bunch of
people work towards solving a
cryptographic problem and when they
solve it
they add a bunch of transactions as a
block into the blockchain of Bitcoin and
also get a reward for doing so this
reward is given in Bitcoin itself here's
the other thing every 210,000 blocks the
reward that's given to the miners for
solving these Pro these cryptographic
problems is cut into half that is if
they were receiving about 50 Bitcoins
the reward for solving a block would be
cut into half that is they would only be
awarded rewarded 25 Bitcoins every block
in a Bitcoin blockchain is added at an
interval of approximately 10 minutes the
210,000 blocks would be approximately 4
years if you think that powerful
computers might join the mining pool and
could solve it quickly that's not the
case Bitcoin has a difficulty adjustment
that happens every 2 weeks where the
algorith
is like oh you have so much hashing
power let me raise the difficulty so
that you take a lot of time to solve the
same problem this way the 10 minute time
interval is maintained and every block
is added only at the interval of
approximately 10 minutes that would take
approximately 4 years for 210,000 blocks
to be added into the Bitcoin blockchain
the Bitcoin blockchain was started in
January 2009 and until November 20 well
they were awarded 50 Bitcoins for every
block that they added this changed after
the first halfing even and from then on
until 2016 the miners were awarded 25
Bitcoins for every blog that they so so
you see where it's going the reward was
cut into half after the second having
event until 2020 all of the miners were
awarded 12.5 Bitcoins and from 2020
until April 2024 they being awarded 6.25
Bitcoins with the Bitcoin event
happening the reward is going to be even
cut further and for every block that the
miners add they'll be rewarded 3.125
Bitcoins that's still slashed into half
this goes on until the year
2140 when the last Bitcoin is going to
be mined every 4 years this reward is
going to be hared that my friends is
called Bitcoin Haring so why does it
happen in case of a fat currency when
the government thinks that there needs
to be specific economic goals to be
achieved then more money is printed when
they see that there is a lot of excess
money in circulation they just print
less or pull in that currency from
circulation this goes on year to year
although this method is arguably not
working accurately as a consumer it just
means that the value of the asset is
worth less and less than it was before
so you see what Bitcoin does here a very
basic principle is that when there is
less of something and the demand stays
the same then the value of that
particular asset increases experts even
say that Bitcoin is on track to become
even of deflationary asset this means
not only that the supply is limited to
21 million a lot of this Supply could
also end up in dead wallets the Bitcoins
could be sent to wallets that are no
longer accessible hence it's deemed as
unusable and there are only a few left
as of now there's approximately 19.6
million Bitcoins that's already mined
which means there's only approximately
1. 3 million Bitcoins left to be Min for
the next Century so what happens in 2140
when the last Bitcoin is mined and
there's no Bitcoin
left here's what here's where it gets
interesting unlike traditional assets
like gold when it's mined and comes into
circulation it can keep on trading but
in case of uh blockchain like Bitcoin
miners are essential part of the system
to keep the blockchain running they are
the ones who to verify and validate the
transactions and add it to the
blockchain the idea is that over time
bitcoin's value uh heavily increases if
you have ever transacted on blockchain
you would realize that there's always a
sender fee that's involved with every
transaction that you make this
transaction fee goes directly to the
minor so the minor who adds the
transaction to the block earns a block
reward and also earn the transaction
fees of that block from the sender the
idea is over time uh Bitcoin blockchain
would become very widespread and popular
that there'll be so many transactions
that these transaction fees will amount
highly for the miners and would be
enough to keep them running their mining
rate besides it's a fairly long time
even in the last couple of decades we
have seen a wide range of changes big
players have started coming in with
Bitcoin EFS so these big players and
corporations will likely have an
incentive to keep the Bitcoin blockchain
running do you have to do anything about
the Bitcoin having event not necessarily
as a Bitcoin holder you don't need to
take any specific action for it nor is
the amount that's with you going to
disappear it's just a lot to do with the
minor during this time miners typically
calculate if they can afford to keep
their mining rigs running if it is
profitable for them and those who
discontinue leave the blockchain and the
rest of the miners benefit from it
coming to the important question does
Bitcoin having event increase the price
of Bitcoin historically speaking after
every Bitcoin Haring event Bitcoin has
always reached its alltime high a few
weeks after the event however not much
changes were observed during or before
the event this time however it's been
quite different a month before the har
event Bitcoin reached its alltime high
and surpassed it too this could be
because of a various factors including
Bitcoin ETFs so many other factors which
we can't account for just because
something happened in the past does not
mean it will happen in the future too if
anything Bitcoin has always proved us to
expect the unexpected what do you think
of this Bitcoin event do you think
there'll be an increase decent price
what is the price of Bitcoin today when
you're watching this video comment down
below and I'd love to know that if you
enjoyed this video hit that like button
and subscribe to our Channel
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