Have you been ignoring bitcoin for the past decade or more?
Are you tired of seeing 'Bitcoin Halving' trend on social ad nauseam?
Are you a new bitcoin holder facing your first halving?
If you answered yes to any...or all...of the above, it's probably time to take a step back and take a moment to fully understand what's probably the biggest event on the crypto calendar. While past performance is no guarantee of future results, the price of bitcoin spiked after each of the last three halvings.
Pique your interest yet? Catch our full breakdown on how the process works and what to expect this April in the video above.
Related: Watch for these signs to see if the big market boom has momentum
FULL VIDEO TRANSCRIPT:
J.D. DURKIN: Imagine putting in the same amount of work time and time again, knowing that no matter what you do, you're going to produce less and less over time. That's the conundrum faced by bitcoin miners everywhere, almost like clockwork, every four years.
I'm talking of course about bitcoin halving, which many people consider to be the most important event in the calendar for crypto.
But first, a few quick basics:
There are 21 million bitcoin — and there will only ever be 21 million bitcoin. And while the supply is fixed, more than 90% of all bitcoin have already been mined.
Simply put, bitcoin mining can be summed up to using specially designed computers to solve complex math equations and create blocks of date, which basically record stores of transactions that can not be changed and can not be deleted.
All of crypto — bitcoin included —is decentralized, so transactions are verified using a technique called proof-of-work. It's kind of like doing a really hard math problem and having all your classmates double check your work — and if you're right, your work, or those transactions are added to bitcoin's blockchain. It means that miners compete against one another, and after successful verification, miners are rewarded with brand new bitcoin.
While mining may sound like a mathematical gold mine of unlimited potential, mysterious bitcoin founder Satoshi Nakamoto developed a strict system of limiting the number of bitcoin that can be mined.
And that brings us to 'bitcoin halving.' Baked into bitcoin's original source code is a provision that says the reward for mining gets cut in half over time, in order to ensure that the currency is deflationary. In other words — the idea is that bitcoin will gain, not lose, value over time.
It's kind of like a 2-for-1 stock split, except the value – or reward of mining — is actually reduced to keep the price of bitcoin high.