Spring 2020 is the time of halving. Recently, Bitcoin Cash and Bitcoin SV have already gone through this procedure, and in May, the original Bitcoin is waiting for the same. On 18th April, the halving of Bitcoin Gold occurred. How will it impact on the crypto community? Changelly explains.
Table of Contents
What Is Halving
Halving is the reward reduction for a cryptocurrency block. This is a reward for the miners, which they receive when they find a new block. A block is sent to a chain of blocks called blockchain, which guarantees the operation of the cryptocurrency network, and a successful miner receives new coins in his wallet.
The creator of the original Bitcoin Satoshi Nakamoto invented a halving procedure. He laid it in the cryptocurrency code. Since Bitcoin Gold, BCash and BSV are forks of Bitcoin the coins repeat everything behind the main coin. Bitcoin halving occurs every 210 thousand blocks or approximately every four years. Bitcoin Gold, BCH and BSV do the same.
Bitcoin Gold underwent halving for the first time and for Bitcoin the third. The difference is due to the fact that BTG was created in 2017. The first halving of Bitcoin reduced the reward from 50 to 25 coins, the second – from 25 to 12.5 coins. Now the block reward will drop from 12.5 to 6.25 coins.
What Will Happen after the Bitcoin Gold Halving
The Bitcoin Gold (BTG) halving took place on the block under the number 630,000. It happened on April 18th. At block 629,999 the reward is 12.5 BTG, and at 630,000 it will be 6.25 BTG.
The remaining network performance will remain the same. However, even one reduction in reward will affect several points.
- The number of new BTG coins will decrease. Under normal conditions, six cryptocurrency blocks are formed per hour, i.e. 144 blocks per day. This is equivalent to 1800 new BTGs that miners get. After halving, 900 coins is formed per day.
- Inflation. Before halving, it was 3.6 percent per year. Since fewer new coins will form, the rate will drop to 1.8 percent per annum. This is about 0.005 percent per day.
BTG Halving: Impact on Miners
Halving is not a fork. This is a normal network operation procedure. A new blockchain, a new cryptocurrency, or something else is not formed. Wallet owners do not need to update programs, and miners will not have to change the settings in their .bat files.
Due to the halving, the reward for the blocks will drop, and earnings will be less. After halving, it will become unprofitable for some miners to get BTG or they will simply switch to a new coin. They will leave the network, and the hash rate will decrease. Then the mining complexity will decrease, and mining Bitcoin Gold will become easier.
If half the miners leave the network after halving, the earnings of the remaining miners in the network of the same cryptocurrency rate will not change.
Halving is a normal procedure in the cryptocurrency development. Each halving means that the network works fine, transfers are carried out, and miners are still doing their thing. So we can only rejoice over the long-awaited event and go to a new stage in the existence of the coin.