There has been a lot of chatter on the crypto channels this week, all centred around the Bitcoin halving event taking place on 11th May 2020. It’s an event that happens once every four years, which is why we’re giving you the lowdown on what Bitcoin Halving actually is and how it could affect you.
What is it?
Before we answer this, we need to explain what Bitcoin mining is. The primary purpose of mining is to support, validate/approve and monitor the Bitcoin network. In the simplest terms, it is when people (also known as miners) come together to use their computers to process extremely complex mathematical problems. Solving these equations generates tokens and makes the payment network more trustworthy and secure by verifying each transaction that takes place on it. In order to make sure that these vital functions are carried out, incentives need to be put in place. These incentives come in the form of rewarding miners with Bitcoin every time a mathematical problem is solved and a block is completed / added. Currently, the reward is set at 12.5 BTC for every block mined. After today, this reward will be (as the name suggests) halved to 6.25 BTC. Halving takes place roughly every 4 years, or when 210,000 blocks have been added to the Bitcoin blockchain.
Why is it important?
It reduces the amount of BTC being circulated in the network and keeps Bitcoin inflation in check. Previous Bitcoin Halvings (in 2012 and 2016) lead to some pretty dramatic market movements in the aftermath.
Will it affect your Wirex BTC account?
No, this does not affect your Wirex BTC account. If you are topping up your account on the Wirex platform, the process remains the same.
With all that in mind, do you buy, sell or hang on to your BTC? It’s entirely up to you!