Bitcoin is a decentralized digital payment system with no central authority. It allows instant payment to anyone around the world and available 24*7. The entire bitcoin network is backed by the miners. The miners are the specialized systems which perform complex computational process called “Proof of Work” for a block of transactions.
For their effort, they will be rewarded with the newly created Bitcoins. This ‘block reward’ is how new bitcoins are released into the system. A new block of transactions is added to the Bitcoin blockchain network approximately every 10 minutes. Currently 12.5 Bitcoins are added into the bitcoin network.
Bitcoin halving is a process of dividing the generated rewards per block by half. Currently 12.5 bitcoins are rewarded which will be reduced to 6.25 bitcoins on halving. This is made to maintain the total supply of bitcoin which is 21 million.
Why Bitcoin Halving Is Done?
The bitcoin creator Satoshi derived the initial monetary policy which expressed the circumstances of inflation or deflation. When it was introduced, the creator(s) didn’t know how well the bitcoin is going to play in the future. They wanted the coins to be distributed initially to a large number of users and a constant rate to maintain the mining and price going up.
Coins have to get initially distributed somehow, and a constant rate seems like the best formula.
As bitcoin mining is a complex computation processing, the speed of mining increases over time due to the development in technology mining rigs which may result in the early exhaustion of bitcoin. Bitcoin halving is the only solution.
There can by only 21 million bitcoins that can be mined. When we are writing this post, 87.235% of the 21 million bitcoin is already mined. More than 98% will be mined by 2030. Now you can see how this goes.
Bitcoin Halving History
Initially, the system was designed to release 50 new bitcoins into the network every 10 minutes. On November 28th, 2012, the first halving happened which reduced it to 25 bitcoins. The second halving which happened on July 9th, 2016 reduced it to 12.5 bitcoins.
The next halving is estimated to happen on 13 May 2020 01:57:02 UTC which will reduce it to 6.25 bitcoins. The 2024 halving will likely occur between March 2024 and June 2024.
This keeps happening every 210,000 blocks (4 years) till 2140 that is when the complete 21 million bitcoin mining will be complete.
Whom Does It Affect
Miners can expect lower mining rewards.
Traders can expect huge price volatility.
A hash rate is the measure of miner’s performance. As the halving is very near, the network hash rate is all-time high now. And we believe, more and more people are attracted towards the cryptocurrencies in the recent years. The Bitcoin is going to skyrocket in the upcoming years, there is no doubt in that.
How Many Bitcoin Miners Are Out There?
Slushpool, one of the major bitcoin mining pool with a userbase of 200,000 miners. They own 12% of the network hash rate. If we estimate it, there can be roughly 1,000,000 unique individuals mining bitcoins.
Does this affect other Cryptocurrencies?
As the bitcoin is the most used and famous cryptocurrency in the market now, surely it is going to affect other coins like Bitcoin Cash, Litecoin, Ethereum. It can be either rise or fall, the Bitcoin price surge is going to affect other cryptocurrencies as well.
Cryptocurrencies are a new concept in the world economy. They were invented approximately only a few years back but they already attracted have a lot of attention. Especially since the year 2013, they experience turbulent changes in their exchange rates.
Bitcoin is the most popular cryptocurrency as of now. And as you might hear, it is highly volatile. This nature is both pro and cons of buying Bitcoin. You might face a waterfall dip and even a skyrocketing high.
To know more Bitcoin, Bitcoin Mining, security and the country regulations you can check this post of ours. Bitcoin is also used in the Dark web to make purchases.
How to Buy Bitcoin?
One must need to sign up and create a bitcoin wallet first.
To buy bitcoins on a bitcoin exchange using a bitcoin wallet as a depository, payment can be made with a credit card, debit card or bank transfers.
Step 1: Choose a Bitcoin wallet
Bitcoin wallet is not a physical wallet and Bitcoins are not real coins to store in it. So what is Bitcoin? It is just public key and private key which is used to buy and sell them. And as it is only sets of keys there are various wallets available with different options and security levels to store them. Each wallet has its own pros and cons.
Coinbase and Blockchain are the two most widely accepted popular wallets. Coinbase is directly connected with bitcoin exchange which makes buying and selling of bitcoins so much easier. Coinbase also provides offline storage of your bitcoins for added safety.
Mobile Wallet
Even though an offline wallet is considered for enhanced security, a normal buyer would make use of the online and mobile wallets for convenience and accessibility. Mobile wallets make it easy to access Bitcoin even when travelling but in an unpleasant situation where your mobile gets hacked, the coins will be in danger of being lost forever.
Make wallets handle this security concern in their own ways. Mycelium (open protocol) and Airbitz (client-side encryption) are two such successful mobile wallets that have focused on the security of the coins.
Software and Hardware Wallets
Hardware wallet is the safest of all. It can be preferred if you are planning to store the Bitcoins as an investment and not on spending it. But you might need to spend some extra amount to buy the Hardware. A normal legacy hardware wallet will require only PIN Code to access them. But there are some wallets like Trezor which offers 2-factor authentication and a password manager.
Software wallets, on the other hand, are not as secure as hardware wallets, but it is more preferable for beginners as it is very simple to set up and can be accessed via Web from anywhere. Make sure to keep your computer clean and malware-free all the time. Some of the software wallets to consider are Electrum (decentralized servers), Copay (store multiple wallets), and Jaxx (accepts different cryptocurrencies).
Paper Wallet
One more wallet to be considered more secure than any other in theory is Paper Wallet. Public and Private keys will b printed on a piece of paper and can be scanned or read to online or software wallet to transfer or use them. But there is the risk of paper getting stolen, lost or getting some damage. In such case, the coins will be lost forever.
All these wallets which are mentioned above are only mere examples of their type and we don’t personally recommend any wallet. It is the user’s sole decision to choose one based on his usage and preference.
Step 2: Choose the Bitcoin trader
For a beginner, the place to buy Bitcoins will be an exchange. There are many exchanges available with varying performance and features. Some are very popular and trustworthy among the Bitcoin community like Coinbase. Please make sure to do your research before finalising an exchange to make your first purchase.
To sign up on a bitcoin exchange, one must need to provide some form Identification like their Photo ID and a picture of you holding the ID. Please make sure to check the exchanges KYC policy.
There is another direct route to buy Bitcoins, you can choose Peer to Peer (P2P) service from LocalBitcoins or WazirX. P2P allows you to buy Bitcoins directly from the seller and there won’t be any middleman. You can choose from the variety of payment options available.
We don’t recommend trading in person, but if you choose so, please meet in a safe place for trading.
Step 3: Choose a payment method
Most of the exchanges and wallets will not deal directly with cash. You have to choose a payment method such as Credit card, Debit card or Online transfers. If you are opting to buy Bitcoin via Peer to Peer in LocalBitcoins are WazirX, wide variety of payments options are available like USDT, USD, IMPS, UPI, Cash Deposit, Online Payments, International Wire, Skrill, PayPal and many other methods based on the country and seller.
Step 4: Buying and storing Bitcoin in your wallet
As mentioned earlier, Bitcoin is volatile. So, the prices will vary from time to time. Let’s consider some popular wallet is selling bitcoin for a sum of $8000. You can always make use of CryptoCompare to check the live exchange and buying price of all exchanges before deciding in which exchange to buy.
Even if you planning to spend a lot of money to buy Bitcoin, you will be buying probably buying a fraction of it. There is nothing wrong in it and it is not that we can buy only 1BTC in whole. Wealthy can afford more than that and can buy in large sums.
To make the first purchase, enter the amount in your FIAT currency and the exchange will show the equivalent BTC of the sum which you will get upon placing the order. Bitcoin will be added to your wallet which you choose. In case you wish to transfer the bought BTC to a different wallet, there will a little transfer fee. That is how the Bitcoin transfer works.
Unlike buying currencies, Bitcoin transactions have to be recorded in Blockchain, so it will take some for the buying, selling and transfer to be visible. This time may be much longer than usual if the traffic is too much or the trading is on its peak.
Step 5: Using the Bitcoin.
Sell Bitcoin
If you are planning to sell the Bitcoin at a competitive price for Profit. Be prepared by setting up a seller account and a perfect plan. Because Bitcoin value fluctuates and you should be ready to sell your coins once your planned moment is noticed. Being ready with a plan will help you in avoiding panicked rush as everyone will be doing the same.
Trade Bitcoin
Bitcoins can also be used in exchanges to trade for other cryptocurrencies or FIAT money. A wide choice of crypto to fiat currency pair will be available in the exchange to choose. You can sell the Bitcoins the same way you bought it. Simply, put a sell order at the decided value and your exchange will execute it when the price is reached.
Hold Bitcoin
Bitcoin or any cryptocurrency is at its earlier stage of development. But still, Bitcoin has faced many challenges and went to a great dip and raised back to an extreme high. It’s is always believed that Bitcoin will reach $1 million. It may or may not happen. But Bitcoin has the calibre to do it. The value of the currency depends on the investors and the choice that people make.
Cryptocurrency is unstoppable. It is people money
Unlike FIAT market where the government can introduce money whenever they wish. The total number of Bitcoins that can be mined is only 21 million. Bitcoins can’t be introduced in the system by anyone. It can only be mined.
Demand Is Booming
Sell Dollars, Buy Bitcoin
Robert Kiyosaki
DEATH OF DOLLAR. People desperate for money. Very sad. If government gives you free money take it yet spend it wisely. DO NOT SAVE. Buy gold, silver, Bitcoin. Dollar is dying. Silver $20. Best Buy for future security. Everyone can afford $20, especially with free fake money.
