It’s called the “halving,” a preprogrammed feature in bitcoin’s internal plumbing which was put in by its creator Satoshi Nakamoto.When it was invented back in 2008, the creator had written in it’s code a rule dictating that the prize would be halved every four years, in a step designed to keep a lid on bitcoin inflation.
Bitcoin can be used to send money instantly around the world, using individual bitcoin addresses, free of charge with no need for third party checks, and is accepted by several major online retailers.
In the web based digital currency world, federal banks to add new money to the system but computers which are awarded fresh bitcoins for processing blocks.
In recent months, a run-up in the price of bitcoin was attributed in part to the halving since it will effectively cut by 50% the rate of production of new bitcoins.
Experts believe that halving spurs bitcoin’s price to new heights. In November 2012, when the first halving took place, the price had touched an all time high of &1,000.
For the people who make a living off maintaining bitcoin’s global network, it will have very real effects. Many miners keep tens of thousands of computers running 24 hours a day in fierce competition with others across the globe to earn bitcoins. For miners, it results in a big drop in revenue—for one block mined, a miner would make around $16,000. Now, it’s $8,000. Though the good news for miners is that the rising price of bitcoin in the past few months may compensate for the worst potential hazards of the halving.
