Bitcoin halving2020 is scheduled the week starting 18 May 2020. That’s when the number of blocks would reach 630,000. It is expected that the block reward will fall from 12.5 to 6.25 bitcoins. The halving’s exact date is not yet established since the time it takes for the generation of blocks varies. The network averages at a block per ten minutes.
How to Trade Bitcoin’s Halving in 2020
There are two ways to do this. First you can speculate on the cryptocurrency price with the use of derivatives like CFDs or simply to buy coins straight through an exchange. One of the benefits of trading cryptocurrencies with derivatives is that you don’t own the underlying coins which allows you to do the following:
You can choose to go long or short: This means that you can take a position in Bitcoin regardless if you expect its value to rise or fall.
You can take advantage of the leverage: You may open a position simply by making a deposit which is known as margin. This will give you access to a larger market exposure. Leverage gives you a larger exposure to a financial market with only a small amount of your capital. Hence, it magnifies the scope of both your losses and your gains.
Why Does It Halve?
Bitcoin halving2020 because of the software’s design. It was created by Satoshi Nakamoto. Until this day, it is still unknown if it is an individual or a group who is represented by this pseudonym. Nothing much was recorded or stated about the software. Nor was there any explanation for the halving, but a lot have speculated that the software was designed to distribute coins as an incentive for people to join the network for them to mine new blocks. Under this theory, the blocks were programmed to halve during regular intervals. This is so because the value of every coin rewarded was believed to increase while the network expands.
One criticism this design of Bitcoin is that there is a finite supply of 21 million coins which means that users tend to save instead of spend hoping that the coins will have an increased value over time. This must have fueled the boom and bust cycles that happened in the past. It was because users hoarded coins for them to cash out at certain key levels. There were also those who compared the Bitcoin trading to the Ponzi scheme or pyramiding scheme. They argued that the system’s design has rewarded disproportionately those who joined early on.
Mining Difficulty and Mining Pools
There are many factors that affect Bitcoin’s scarcity and reduced block rewards are only one of them. It is harder today than in the past to generate Bitcoins and solve blocks. This is because the mining difficulty is increasing as more and more miners are joining the network. This increase in difficulty made the miners use mining pools for them to collectively solve blocks and to share the block reward. A mining pool is a network of miners who share processing power and also split the block reward.