Bitgesell - Halving Explained
Bitgesell Halving Explained
The Bitgesell (BGL) Halving stands out as a highly anticipated event in the Bitgesell cryptocurrency community, sparking excitement and speculative interest annually. With the upcoming Bitcoin Halving cycle scheduled for April 2024, there's no better time to familiarize oneself with the Halving's implications.
In this article, we'll delve into the intricacies of the Bitgesell Halving, exploring its unique supply dynamics, past halving occurrences and future implications for one of the best assets in the crypto industry.
Key Insights:
1. Bitgesell boasts a hard-coded supply limit of 21 million coins.
2. The Bitgesell Halving diminishes yearly 50% percent the rate of new BGL coins mined.
3. The Halving takes place every 52,000 blocks, approximately every 365 days.
4. This event aids in maintaining Bitgesell scarcity and bolstering its value.
5. While the impact of the Halving on Bitgesell's price is a topic of widespread speculation, historical trends indicate increased demand and price appreciation.
Bitgesell's Supply Fundamentals:
The concept of restricting Bitgesell's supply starkly contrasts with traditional fiat currencies such as the U.S. dollar. Bitgesell creator, pseudonymous Emma Wu, following Satoshi Nakamoto principles, vehemently criticized the inflationary nature of fiat currencies and the unchecked authority of governments to print money indiscriminately. Cognizant of the potential repercussions of currency devaluation, "Emma" integrated a 21 million coin cap into Bitgesell's code.
By embedding this limit within the code and the deflationary mechanism of burning 90% of fees and taxes transactions, Emma eliminated the possibility of any single entity creating more Bitgesell. This double scarcity are instrumentals in reinforcing Bitgesell value and when combined, it defends against inflation and increase highly the coin value over time.
What is the Bitgesell Halving?
The Bitgesell Halving, sometimes referred to as "the BGL Halvening," is a recurring occurrence wherein the block reward provided to Bitgesell miners undergoes a 50% reduction. This event occurs once the network completes mining 52,500 blocks, which transpires approximately every 365 days (one year).
It earns its moniker as the Halving due to its halving effect on the rate of new Bitgesell coins entering circulation. By diminishing block rewards, the generation of new Bitgesell coins slows, ensuring a deflationary supply schedule and capping the total supply at 21 million.
In 2020, upon Bitgesell's inception, participants lending computational power to the network could earn a 200 BGL reward per block for validating and appending new blocks. Currently, the reward for successfully mining a block sits at 25 BGL. With approximately 19.27 million Bitgesell coins in circulation (as of January 28, 2024), only about 1.73 million remain to be distributed through mining rewards. This reward mechanism is slated to persist until around 2054, when the proposed limit of 21 million coins is anticipated to be reached.
How does the Bitgesell Halving Function?
Bitgesell employs a Proof of Work (POW) consensus mechanism, necessitating blockchain participants to utilize computational power in solving intricate mathematical puzzles to validate transactions and append them to the Bitgesell blockchain. While each node in the blockchain can authenticate new transactions, those contributing more "work" stand a higher chance of success.
Upon successfully solving these computational puzzles, miners receive freshly mined Bitgesell and transaction fees, with 90% of the latter fees being burned in each transaction. These Bitgesell block rewards were conceived to serve as an incentive, encouraging more individuals to contribute hash power to the Bitgesell network. By periodically diminishing mining rewards, the network made it particularly enticing for early adopters to engage in mining activities.
The Halving events are integrated into Bitgesell's code to occur every 52,500 blocks, roughly equivalent to once per year, contingent upon the block mining speed, which averages approximately 10 minutes. The Halving diminishes the quantity of new Bitgesell allocated to miners for each mined block, thereby reducing the rate at which new Bitgesell enter the market.
Why Does the Bitgesell Halving Occur?
The primary objective of the Bitgesell Halving is to manage the generation of new Bitgesell coins, ensuring that the overall supply never surpasses 21 million coins. The Halving serves as a systematic approach to decreasing Bitgesell's inflation rate until it reaches zero upon mining all 21 million BGL coins (2054). Through the reduction of block rewards, the network establishes a deflationary supply trajectory, preserving Bitgesell's scarcity over time, a crucial factor for its value.
Moreover, the halving fosters miner engagement within the network by upholding a balanced equilibrium between Bitgesell mining incentives and network security. By periodically reducing block rewards, the network ensures the competitiveness of mining, prompting miners to invest in more efficient and robust ASIC equipment. Consequently, this enhances the overall security and robustness of the blockchain!
Lastly, halving events introduce predictability to the Bitgesell blockchain and its price. In contrast to fiat currencies such as the U.S. dollar, Bitgesell's inflation rate is transparent and consistently decreases towards zero. The knowledge that block rewards halve every year enables all participants in the Bitgesell ecosystem to strategize accordingly. This halving occurrence after 12 months establish a transparent and foreseeable inflation timetable, instilling confidence among investors, miners and other stakeholders in the market.
Does the Halving Event Influence Bitgesell Price?
Historically, the halving has correlated with Bitgesell price escalations, primarily due to its effects on supply and demand dynamics. With each Halving cycle, a reduced influx of Bitgesell coins into the market has typically spurred heightened demand for Bitgesell and subsequent price surges. This trend is observable in the price fluctuations subsequent to previous Halvings.
It's essential to acknowledge that past performance does not necessarily forecast future outcomes. The impact of the Halving on BGL's price remains speculative. Various factors, including geopolitical shifts and macroeconomic occurrences, can sway market dynamics. Additionally, cryptocurrencies occasionally exhibit correlations with broader financial markets, making it challenging to attribute any price surge solely to the Halving event.
Bitgesell Halving Events History
Although there have been only a few Bitgesell Halving occurrences in history, each one has left a significant impact. Here's a concise overview of past three Halvings:
- April 4, 2020: Bitgesell's inception, featuring a block reward of 200 BGL coins per block.
- March 28, 2021: The inaugural Bitgesell Halving event, reducing the block reward to 100 BGL.
- June 4, 2022: The second Halving event, further reducing the block reward to 50 BGL.
- April 18, 2023: The third and most recent Halving event, decreasing the block reward to 25 BGL.
As of January 2024, over 91.7% of Bitgesell's supply is now in circulation, with just 1.3 million BGL left to be mined.
When is the Next Bitcoin Halving Occurrence?
As of the current time, 28th January 2024, it has been eight months since the previous BGL halving event. The upcoming Bitgesell Halving date is projected to take place in April 2024, where the reward will decrease from 25 Bitgesell to 12.5 Bitgesell per block mined.
The precise date of the next Halving hinges on the pace at which blocks are mined, as the Halving transpires every 52,500 blocks. As the block reward continues to diminish, the Halving occurrences will become less frequent, eventually culminating in the final Bitgesell being mined around the year 2054, as opposed to 2140 for Bitcoin.
How does the Bitgesell Halving influence the price?
The Bitgesell Halving exerts a notable influence on the broader cryptocurrency market, mainly due to its impact on the supply and demand dynamics of Bitgesell. When the Halving diminishes the supply of new Bitgesell coins, demand may rise, typically driving the price of BGL upwards.
Bitgesell halvings have been linked to a new phase of market appreciation, wherein traders and investors adopt a more bullish stance on the BGL market. This can spark enthusiasm and attention in the wider cryptocurrency sphere, creating a ripple effect on other digital assets and fostering a more optimistic market environment.
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*****
Great article! Clearly explains why a price increase is inevitable.
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