Bitcoin is one of the most talked-about subjects in the global financial industry. This cryptocurrency managed to break all barriers and become as valuable as gold in 2021. Not only does Bitcoin allow its users to make a substantial profit, but it also holds tons of advantages when used as a payment method.
Greater security, instant online transactions, and the fact that users void all unnecessary fees are just a few of these advantages. There are many processes that make sure that Bitcoin remains stable and thrives with each passing day. These processes allow the people to reap all its benefits as a payment method and as an occupation (making money). With that being said, we decided to take a look at two of arguably the most important processes in the Bitcoin network – mining and halving.
We’ll take a detailed look at both of them and explain the importance that they have. Let’s begin.
You’ve probably heard of mining as this is one of the main ways to earn Bitcoins. Even though mining is extremely hard, it is free, and in a way, guarantees a profit for the traders. In layman’s terms, mining Bitcoins is solving complex puzzles.
The purpose of solving these puzzles is for the miners to earn Bitcoins, while at the same time, making sure that the network is updated. How? By solving these puzzles, miners actually record and verify Bitcoin transactions. Each transaction that they verify is known as a block and they are stored into the blockchain network. Think of the blockchain as a notebook. Each block that miners record is a page of that notebook. Thanks to the fact that the blockchain is updated daily, the network can remain stable.
And if you are wondering how are Bitcoins sold after earning them, we are more than happy to explain that process as well. Trading sites are the platforms where the magic of making a profit with Bitcoin happens. Thanks to reputable trading sites like Bitcoin Storm, traders are provided with an extra service that maximizes their profits.
This service is an AI system that collects all the data about Bitcoin from the market. The data is analyzed and the results provide traders with accurate predictions on Bitcoin’s future fluctuations. These predictions are very precise, which is why the daily profitability rate at the aforementioned site is very high. In doing so, traders know when to sell their assets and generate the highest possible profit.
Halving events take place when 210,000 Bitcoins are mined. On average, these events are held every 4 years. Their purpose is to control the flow of Bitcoins that are released into the network. Too many or not enough Bitcoins will plunge the market, which is an unlikely scenario.
During halving events, it becomes extremely hard to mine Bitcoins, hence the number that is released is drastically cut. Since mining Bitcoin becomes very hard and there are not a lot of Bitcoins in the network, their value rises at spikes at a certain point.
So far, there have been 3 halving events and all of them led to price surges around a year and a half later. The first halving event took place in 2012, the second took place in 2016, and the most recent one was in 2020.
After the first halving event, Bitcoin peaked at $713 in January 2014. The second halving event led to the 2017 record in value, while the most recent halving event wrote history as Bitcoin topped $50,000 in value. Some experts even believe that Bitcoin will keep rising and reach its peak around summer or autumn this year.
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