If you are interested in crypto, the word "Halving" has surely come to your ears. It's not just an ordinary update – it's a fundamental mechanism that defines the scarcity of Bitcoin.
1. What is Halving?
In the Bitcoin network, every 210,000 blocks (which is roughly every 4 years), the reward for miners for mining a new block is halved. Instead of a fixed supply, we get a deflationary mechanism.
2. Why does this matter?
Limited supply: Bitcoin has a cap of 21 million coins. Halving causes new coins to enter the market at a slower pace.
The law of demand and supply: If demand for $BTC increases or remains steady, and new supply drastically decreases, it creates pressure for price increase.
Market psychology: Historically, Halving has been a starting signal for major bull runs.
Summary:
Halving is a reminder that Bitcoin is "digital gold." Unlike fiat currencies, no one can "print" more of it.