“Bitcoin Halving” in the Time of Corona
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In the last few months, we’ve learned that many things that seem safe and unchanging don’t have to be that way. For example, the Olympic Games have been postponed, which has never happened in history. However, even in these crazy times, there are things we can be sure they will arrive precisely when they were planned. One of them is halving the reward for bitcoin miners, better known as “bitcoin halving” in the time of coronavirus.
For those who are new to this topic, a brief explanation. Miners are people who use their hardware to maintain a bitcoin network. For each new block of transactions added to the blockchain, one of the miners receives 12.5 BTC, which happens approximately every 10 minutes. After halving the prize, the miners will earn 6.25 BTC per block.
Why Is Bitcoin Halving Necessary?
“Bitcoin halving” started on May 11. This is something that’s predicted to happen every four years. Still, due to the almost continuous growth of the miners’ processing power, it has so far happened in intervals that are slightly shorter than four years (the previous halving occurred in July 2016).
With COVID-19, it didn't prove easy to predict price movements. Bitcoin would probably have exploded (in a positive sense) if it had existed in 2008 during the economic crisis. However, the mess we’re facing now wasn’t the same as the one 12 years ago. At that time, we had the collapse of the financial system, which gravely shook even the most extensive world banks, and thus confidence in the banking system.
An alternative in the form of cryptocurrencies would be exciting to many in these circumstances. However, we don’t have a crisis of the financial system now, even though the long-term consequences are still unknown.
In these circumstances, long-term planning is a luxury that only a few can afford. In a situation where people are worried about their lives or are afraid if their businesses will survive (if they are business owners), it’s not likely that anyone thinks about whether it’s smarter to invest in gold or bitcoin and what will bring more profit in 5 or 10 years. Of course, firstly, you need to get into possession of bitcoin for whose purchasing the locations and ways are various. One the fastest ways to close such a transaction is to buy bitcoin with a credit card on exchanges. This process takes only a few minutes and includes fees.
Why Can Bitcoin Be a Cozy Alternative?
Since the beginning of the crisis, the price of cryptocurrencies has moved similarly to indices on world stock exchanges. The COVID-19 pandemic will pass, so the world will have to face the long-term consequences of its short-term decisions that have been made and will be made in the coming months.
The economy has stopped, and many countries have already announced an earnest reprint of money in order to restart the economy. Bearing in mind that even before that reprint, the states were mostly seriously indebted, the question arises as to how much additional indebtedness can be submitted. This will be a serious challenge even for the world’s strongest economies, especially for the weaker ones.
We would be surprised if this crisis doesn’t cause severe levels of inflation and currency devaluation, and even complete bankruptcy in some of the developing countries, even in some of the developed countries.
A currency that can’t be reprinted uncontrollably, which is precisely bitcoin, and thus invalidate, can be a lovely alternative in these circumstances.
MahendraBajiya | MahendraBajiya is a digital marketer and a founder at MIGuestPost.com, the digital marketing agency specialized in advertising and creating link building and content strategies. He writes blogs and guest posts about various topics.