The world's first cryptocurrency Bitcoin (CRYPTO: BTC) is on its way to decreasing its inflation rate once again, with many in the cryptocurrency community believing that it will lead to another parabolic price increase.
What Happened: Progress Until Next Halving — a Twitter profile dedicated to tracking the time needed until the Bitcoin block rewards get cut in half again — tweeted on Tuesday that the network is 49.9% of the way towards its next halving, which is expected in 730 days.
See Also: How To Earn Free Crypto
The Bitcoin network is run by so-called "miners" who pay pricey electricity bills to be able to create blocks and receive the block rewards in exchange. The block rewards are a number of completely new Bitcoins that are given to the miner — or miners and pool when a mining pool is involved — that keeps getting smaller and smaller — this is the only source of new Bitcoins.
Why It Matters: When the Bitcoin network was first deployed back in 2009, each block introduced 50 BTC into circulation, since then it was halved to 25 in 2012, 12.5 BTC in 2016, 6.25 BTC in 2020 and is scheduled to decrease to 3.125, presumably in early March 2024. Those events are programmed into Bitcoin's software and were planned from the very infancy of the network and play a major role in determining its value by cutting the asset's inflation in half each time.
Bitcoin halvings are the basis for the stock-to-flow quantitative model that aims to predict the price of the coin into the future as far as 2026. This model, introduced in the first quarter of 2019 agrees with Bitcoin's historical price to a surprising degree — largely by going parabolic after each halving.
