July 26, 2021
The first block of Bitcoin’s blockchain, the genesis block, occurred on January 3, 2009. It is the date of the first transaction on the network and Bitcoin was traded directly between two people, without any intermediaries. That means, it happened in a peer-to-peer (P2P) logic. There were very few transactions, but it was the beginning of a story that lasts until today and will last for many years. The future of payment systems goes through the blockchain and Bitcoin started that process.
Bitcoin was designed as an inflationary currency, but with the goal of being a deflationary currency. From an absolute point of view, there is an increasing number of coins to be mined, because there is more and more Bitcoin circulating. However, from a relative point of view, the amount of coins mined is smaller and smaller, until the total number of coins is reached. Bitcoin is scarce and that’s one of the reasons it’s a store of value. Bitcoin will become scarcer as time goes on. First, because there is a finite amount of Bitcoin (21 million) and secondly, because the number of new bitcoin decreases for every 210,000 blocks that are processed in its blockchain. As Bitcoin becomes scarcer, with an increase in demand over time, it allows it to be used as protection against inflation as the price increases. This happens because there is more people inside the network and a higher institutional interest. Smaller investors and larger companies are beginning to acquire more and more Bitcoin and Bezel Investments is part of this process, offering fantastic solutions for its clients.
Bezel Investments chooses to protect its investors and provide solutions in Bitcoin, contributing to increased wealth and a fairer economy, with appropriate financial products and payment systems in cryptocurrencies
Unfortunately, the monetary policies of the world’s central banks have been dangerous and counterproductive. Both the US Federal Reserve, known as the FED, ECB (European Central Bank) and other central banks around the world, have inflated fiat currencies. There has been an excessive amount of currency printed by central banks, leading to a decrease in the purchasing power of most people. US Dollar ($), Euro (€), Brazilian Real (R$), among many other currencies, have been suffered tremendous inflation, with more currency in the market but with less value. As such, Bitcoin is the solution! That’s why Bezel Investments chooses to protect its investors and present Bitcoin services and solutions, contributing to increase wealth and to a fairer economy, with appropriate financial products and cryptocurrency payment systems.
Considering all this, we come to the main question: what is Bitcoin Halving? At its heart, Bitcoin Halving is about controlling the monetary policy and adjusting inflation. Its economic model is divided into several phases and is inherent to the creation of the Bitcoin protocol. Basically, Bitcoin Halving is halving the reward of miners, occurring at equal block intervals, and having roughly the same amount of time between them.
Mining new coins is done algorithmically through the rewards of solving cryptographic problems in the network’s mining and in 2020, we have already seen the reward halved, going from 12.5 to 6.25 Bitcoin units per mined block. In 2024 it will change to 3.125 Bitcoin per block, in 2028 to 1.5625 BTC and so on. This event always occurs every 210,000 blocks and to date, it has represented a similar time span of approximately 4 years. The first four years (2008-2012) were test years and completely different from the years of the second (2012-2016) and third (2016-2020) cycles. At Bezel Investments we believe that the coming cycles will be very interesting, because despite having Bitcoin Halving, we will see a decrease in price volatility and a greater adoption of cryptocurrencies in general, always having Bitcoin as a store of value.
The issuance of new Bitcoin decreases every 210,000 blocks (…) Bitcoin Halving is the control of currency issuance and inflation adjustment
Bitcoin Halving is a special event and has a huge impact on the cryptocurrency community. There is always a lot of news and the euphoria is essentially related to the impact of this event on the mining area, transaction fees and price. So, to conclude, it remains to be said that Bitcoin has followed its path in a very natural way and always based on its inflation model. It is based entirely on the balance between supply and demand and, as it is finite and increasingly scarce, it can reach levels never imagined before, offering itself as one of the best alternatives as a monetary system and a store of value of the world. And if you’ve already understood the importance of Bitcoin, you’ve also understood the focus of Bezel Investments much better. Do you want to invest with us and increase your Bitcoin portfolio? Click here.