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Bitcoin Halving 2020: History & Price Prediction (A Simple Explanation) - YouTube
Channel: Crypto Casey
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Hello! I'm Crypto Casey. In this video we
will be talking about the Bitcoin halving
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or "halvening" event that will take place
in May of 2020. We will go over what
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halving is, why having takes place, and
what implications halving has for the
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future of Bitcoin. There are three key
concepts about the Bitcoin network you
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need to know that will make Bitcoin
halving easier to understand. The concepts
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we will go over are the Bitcoin
blockchain, Bitcoin mining, and the
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Bitcoin supply. Let's get started. Concept
number one: the Bitcoin blockchain. First,
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let's briefly talk about the Bitcoin
blockchain. The Bitcoin blockchain is
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basically a live running record of all
Bitcoin transactions. As I've explained
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in previous videos, the simplest way to
understand what blockchain means is by
[54]
separating the word "block" from the word
"chain." So imagine records of individual
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transactions like payments sent to or
from one person to another getting
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listed or indexed one after the other.
Once a certain amount of transactions in
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the list has been reached, a block is
formed. This is because each block has a
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maximum amount of transaction data it
can store. Once the maximum amount of
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transaction data for the block has been
met, the block is added behind the
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previous block of transactions. Now
imagine these blocks of transactions
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linked together with a chain. So block
chain is simply groups of transaction data
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that are linked together. The basic
structure of the Bitcoin blockchain
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consists of a network of computers
around the world with Bitcoin software
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installed on them. When Bitcoin
transactions occur, the data is
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communicated to this network of
computers that validate the transaction,
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add the transaction to their copy of the
Bitcoin ledger, and then broadcast the
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ledger changes to the other computers on
the network. There's a maximum amount of
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data that can be saved per block so
approximately every 10 minutes a new
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block of Bitcoin transactions is created
verified and published to the Bitcoin
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blockchain if you want a more in-depth
explanation about what blockchain is and
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why it was developed check out my video
guide by clicking on the link above
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awesome concept to Bitcoin mining next
let's talk about how all of these
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Bitcoin transactions are getting
verified on the Bitcoin network the
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verification and posting of transactions
on the blockchain is completed by miners
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via a process called mining miners are
people are pools of people that use
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computer processing power to maintain
the Bitcoin blockchain this includes
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keeping the ledger of Bitcoin
transactions clean consistent and
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permanent by grouping new transactions
into blocks and broadcasting them to the
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rest of the Bitcoin network for
verification each new block of
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transactions has a cryptographic hash of
the block published before it which is
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what links all of the blocks of
transactions together to form the
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blockchain so for a new block to be
accepted by the network miners are
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required to follow a proof-of-work
system which involves creating a new
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cryptographic hash of the newly
completed block so new blocks of
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transactions have a unique hash from the
previous block and to get published to
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the ledger
it requires the creation of another
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unique hash which will go through a
validation process and then get passed
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on to the next block and so on and so
forth to create a new unique hash for
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the block of transactions miners compete
with each other using computer power to
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try to be the first one to come up with
a 64 digit hexadecimal number or the
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hash that is less than or equal to the
current difficulty target of the network
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which warrants its own separate video
explanation so without losing sight of
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the focus of this Bitcoin having video
check out my other video using the link
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above if you'd like to learn more about
the technical intricacies of the Bitcoin
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mining process the basic concept you
need to know about Bitcoin mining to
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better understand the Bitcoin having
event is that miners are rewarded with
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Bitcoin each time they verify a new
block of transactions mining rewards are
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a combination of newly minted Bitcoin
units that were not previously
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circulating and transaction fees of
Bitcoin that were already circulating
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these rewards are in place to
incentivize miners to participate in the
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mining process to ensure the Bitcoin
network continues to be audited and
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essentially maintained
cool let's move on concept number three
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the Bitcoin supply Bitcoin is a digital
currency developed by an unknown person
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or group of people that go by the
pseudonym Satoshi Nakamoto the more you
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learn about and start to understand
Bitcoin the more similarities you will
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see between Bitcoin and gold this is
because Satoshi developed the digital
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currency Bitcoin to intentionally Harbor
characteristics of the precious metal
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gold we recognized this in the mining
process we previously discussed
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prospecting for new gold deposits
building out a mine and operating in
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mine
to extract gold is laborious similar to
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the immense computing power required by
Bitcoin miners to perform guesswork to
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create the new unique hashes to validate
new blocks of transactions another gold
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light characteristics Satoshi programmed
into bitcoins is a maximum supply the
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total number of bitcoins I can ever
exist is 21 million units this 21
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million unit maximum was established to
mirror Gold's stable inflation rate
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you've probably read and watched the
content explaining how Bitcoin is
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inflationary while other content
explains how Bitcoin is deflationary
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it's important to understand that there
are two different definitions of
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inflation the most modern and common use
of the word inflation refers to a
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decrease in the purchasing power of
money the older traditional use of the
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word inflation refers to an increase in
the supply of money that is not backed
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by gold in the modern context of
inflation
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bitcoin is deflationary because over
time its purchasing power will increase
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instead of decrease due to its fixed
supply one way to understand this
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concept is to consider in the future
when new gold prospects become extremely
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rare in mining costs of new prospects
increase until it becomes too expensive
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to mine new gold as a result the fixed
supply of pre mined gold will increase
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in value over time since gold cannot be
created make sense right in the
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traditional context of inflation bitcoin
is inflationary because the supply of
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Bitcoin which is not backed by gold is
increasing as miners mint new Bitcoin
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through validating new blocks of
transactions currently around 18 million
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bitcoins are in circulation of the 21
million total supply according to its
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current track the last Bitcoin will be
mined in the year 2140 which is 100 and
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20 years from now so in our lifetime the
supply of Bitcoin will continue to
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increase great now that you've learned a
little bit about the Bitcoin network
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Bitcoin mining and a fixed supply of
Bitcoin let's talk about what having is
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why having takes place and what
implications having has for the future
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of Bitcoin number one what is having
having in terms of Bitcoin refers to the
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reduction in the Bitcoin block rewards
issued to miners by half
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currently the block reward for miners is
12.5 units of a newly minted Bitcoin
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that were not previously in circulation
when the halving occurs in May of 2020
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the block reward will have or reduce by
half which will give miners 6.25 units
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of a newly minted Bitcoin per validated
block having was programmed to occur
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every 210,000 block and since a new
block of transactions is completed
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roughly every 10 minutes this works out
to an average having event every four
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years when Bitcoin was first developed
in 2009 the block reward was 50 bitcoins
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in 2012 the first having reduced the
block reward to 25 bitcoins and in 2016
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the second having event reduced the
block reward to what it is at the time
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of this video which is 12.5 bitcoins
number - why does having occur Satoshi
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Nakamoto programmed the halving of newly
minted Bitcoin every two hundred ten
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thousand blocks to prevent inflation
from decreasing the purchasing power of
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Bitcoin Satoshi also factored in the
increase of technological advancement
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over time into bitcoins algorithm so the
faster new blocks are validated the more
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difficult creating new unique hashes for
new blocks will become at the current
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block reward rate of 12.5 Bitcoin per
block which occurs roughly every 10
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minutes about 1,800 new bitcoins are
minted daily making the inflation rate
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in the traditional sense about 3.8
percent in after the halving of the
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block reward rate to 6.25 Bitcoin in May
about 900 new bitcoins will be minted
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daily
decreasing the annual inflation rate to
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1.8% which will make Bitcoin less
inflationary than the US economy having
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the amount of newly minted Bitcoin in
segments controls the rate at which the
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finite or fixed supplies bitcoin is
titrated into circulation over time
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similar to gold this creates a
predictable and constantly decreasing
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inflation rate that will eventually
reach zero number three what
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implications having has for a Bitcoin
gold is considered one of the best
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stores of value because of its fixed
supply and since the supply is not
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extremely abundant gold is scarce this
scarcity is imposed by nature since
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we're not able to create gold to
increase the supply similarly the
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algorithm that imposes bitcoins fixed
supply was designed to make Bitcoin even
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scarcer than gold so if demand remains
steady or increases for the fixed scarce
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supply of Bitcoin the price of Bitcoin
will experience positive long-term
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effects and after the halving in May the
supply of bitcoins will become even more
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scarce so let's look at what happened
after previous Bitcoin having's Bitcoin
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was around eleven dollars when the first
having occurred in November 2012 then in
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2013 an entire year later Bitcoin spiked
to $1100 the highest Bitcoin had ever
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been at that time before dropping back
down to around $220 in remaining under
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$1,000 for the next few years in July of
2016 during the second having Bitcoin
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was around $600 and then spiked to
20,000 near the end of 2017 which was
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around 18 months later so historically
the 12 to 18 months immediately
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following a halving event Bitcoin
pricing didn't show much movement also
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it's not quite clear that the spikes in
price is 12 to 18 months after the
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having events actually correlate
exclusively with the halving the first
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Bitcoin price spike to 1100 happened an
entire year after the having him in and
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it seemed to correlate with the Cyprus
bailout the second Bitcoin price spike
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to $20,000 happened an entire 18 months
or year and a half after the halving
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took place
and it seemed to be caused by market
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manipulation as cryptocurrency was being
featured in mainstream media and
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attracting attention from the masses did
the having have an effect on the spike
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to $20,000 in late 2017 maybe not the
spike but it's more probable that it's
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been playing a role in maintaining
bitcoins price over 3,000 dollars since
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then so what does the historical data
tell us about the upcoming having event
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into May of 2020 as Bitcoin has become
more popular since the last having in
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2016 the upcoming having in May is
likely already priced in and has been
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for a while there's a lot of hype coming
out about the impending having so it's
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likely that the price of Bitcoin drops
significantly following the having event
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due to so many inexperienced people and
investors operating off of the
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assumption that bitcoins price will
increase immediately after or shortly
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after at the halving as with previous
having events
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I wouldn't expect to see any drastic
lasting changes do you exclusively to
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the halving event without a correlating
positive or negative outside force like
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government regulation market
manipulation an economic event or
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similar even then as with previous
having's averaging 12 to 18 months
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before noticeable changes the bottom
line is this there is a lot of room for
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opposing theories opinions and
predictions about the future of Bitcoin
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pricing with regard to the halving in
May of 2020 and the years following so
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it's important to do your own research
and draw your own conclusions about the
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impending Bitcoin having thanks for
taking the time to watch my video if you
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found the information helpful give this
video like and subscribe to my channel
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for more crypto related content so what
do you guys think the future holds for
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bitcoins pricing after the halving will
it fall will it rise in the comments
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below share your post having 6 months 12
months and 18 month Bitcoin price
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predictions be safe out there
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