Bitcoin is becoming more popular and more widely accepted among players, online casinos, and the online financial world in general. It’s a fast and easy way to pay for things or fund electronic accounts that also allows users to maintain a high level of privacy they could never hope for with traditional electronic payment methods.
Over the last few years, Bitcoin has also proven to be a pretty good investment. What was just an obscure concept less than a decade ago is now an asset that’s included in investment plans offered by top financial institutions and traded on regulated exchanges around the world. If you haven’t been paying attention to it, you should be.
It’s likely that in the very near future Bitcoin will not only be a safe and convenient method to transfer money or fund your casino account, but it could also become significantly more valuable, giving you the opportunity to create some additional wealth with absolutely no extra effort.
The Massive Growth Of Bitcoin
To give you an idea of just how much things have changed, Bitcoin came into existence in 2009 and was more or less worthless at that point. It was an experiment and a concept that few people really understood—or even knew about. The highest price point for Bitcoin in all of 2010 was just $0.39 each.
Just a few years later, in November of 2013, Bitcoin hit its then-highest all-time price of about $1000 each. A few years after that, in December of 2017, Bitcoin hit its current all-time high of more than $20,000 each. The rise to these two price points was not the result of steady upward growth in value, and the time at which they occurred was not random.
Both of these highs were reached after Bitcoin went through a “halving” event—of which there have been two so far. Although nobody can say exactly what the price of Bitcoin may turn out to be after such an event, it is fairly easy to predict when the next halving event will occur—and the next one is going to happen very soon.
What Is A Bitcoin Halving Event?
In order to understand what a halving event is and it’s significance in the world of Bitcoin, you have to understand a bit about how Bitcoins are generated and how the Bitcoin blockchain network allows people to transfer coins back and forth.
The Blockchain, Mining, And Rewards
The blockchain is basically an electronic ledger that keeps track of all Bitcoin transactions. Each new Bitcoin transfer from one address to another is added to the end of the chain and the chain goes all the way back to the very first transaction.
The blockchain is maintained by a large network of independent computers that are running the Bitcoin software and doing the work that keeps all of the information updated, checked, and accurate. We won’t get into the complexities of the actual process, but the computers that do this work are said to be “mining” Bitcoin as they work.
Basically, in exchange for the work that they do, the owners of these computers are given a reward. Whenever a block on the chain is successfully completed, or “mined”, the computer or person responsible is given a specific amount of Bitcoin—currently 12.5 bitcoin. At the current price of $8500-$9000 per Bitcoin, that’s about $106,250 for being the one to successfully complete a block. With blocks being completed at a rate of about one every ten minutes, you can understand the incentive for people to join the network and mine Bitcoin.
It’s also important to understand that the rewards given for successful mining are new Bitcoins that didn’t previously exist. They are added to the current total of Bitcoin available to everyone, which will be limited to a final number of 21,000,000. Once the 21 million Bitcoins have been mined, no more will be added to the pool.
So, just like anything else that is bought and sold, the price of Bitcoin fluctuates with changes in supply and demand. As people continue to mine on the network, the supply of Bitcoin continues to increase. However, over time, the rate at which it happens is getting smaller.
Halving Is Designed To Control The Supply Of Bitcoin
Now that you understand the basics, let’s look at what halving is and how it affects the Bitcoin network as well as the value of the cryptocurrency itself.
When a halving event occurs, the reward given for successfully mining a block on the blockchain is cut in half. When Bitcoin came into existence, the reward for mining success was 50 Bitcoins.
The first halving occurred in 2012, cutting the reward to 25 Bitcoins. This diminished the incoming supply of Bitcoin and triggered the first significant increase in price, reaching about $1000 each.
The second halving occurred in 2016, cutting the reward for mining a block down to its current rate of 12.5 Bitcoins. As the supply of incoming Bitcoin diminished again, the price of a single Bitcoin rose to over $20,000 in the following months.
Halving events are not controlled by time, but by the number of blocks that have been mined. It happens after every 210,000 blocks.
So, we can look at how many blocks are currently being mined and roughly calculate when the next halving will occur. Most estimates put the date of that event at somewhere from the middle of May to the middle of June 2020. When it happens, the reward given to successful miners will again be cut in half, resulting in a rate of 6.25 Bitcoins for each block.
As you’ve probably guessed, many cryptocurrency experts believe that when the next halving occurs, the value of Bitcoin will go up. Many are predicting that it will at least double. Some have even thrown out numbers reaching into six-digit dollar values for one Bitcoin.
A Quick Look At The Numbers
Here are some numbers and statistics to help you visualize what is happening within the Bitcoin ecosystem.
Over the last 7 years, the value of a single Bitcoin has appreciated by approximately 71,860%.
One block on the blockchain is completed—or mined—every 10 minutes. At that rate, the blockchain increases by 210,000 blocks, which triggers a halving, about every four years.
An overall limit of 21,000,000 Bitcoins is all that will ever be created. At the time of writing, about 18,100,000 Bitcoins have been mined—or 85.95% of the possible total.
All Bitcoin currently in circulation are collectively worth about $152,591,123,930 at the time of writing.
At the reward rate of 12.5 Bitcoins, about 1800 new Bitcoin are generated each day across the network—a value of approximately $15,300,000. After the halving, that number will drop to 900 new Bitcoins per day.
Since Bitcoin works like real cash and is tied to a wallet which can be lost, not all of the Bitcoin that has been mined is actually available and in circulation. If a wallet is lost (the owner forgets the password or loses the device it was on) the Bitcoins in that wallet are lost along with it. It would be the same as if someone buried a chest full of dollars and then forgot where they buried it. That money is gone. Some estimations say that as much as 25% of the Bitcoin in existence has been lost this way. This would put the actual number of available Bitcoins at around 13,575,000, making it more scarce and therefore more valuable.
As the reward for mining continues to be cut in half after every 210,000 blocks, it is estimated that the last Bitcoin will be mined sometime in the year 2140.
Will Bitcoin Be Part Of Your Gambling Strategy?
It should be said that nothing here is intended in any way to be interpreted as financial or investment advice. And, as with gambling, you should only consider speculating in financial markets with money that you can afford to lose.
As we said at the beginning, though, if you haven’t been paying attention to Bitcoin, it could very well be worth your while to look into it. If you’re going to be keeping money in online accounts anyway, you may be able to add a bit to your bankroll even when you’re not playing the slots or hitting the tables. It’s up to you to decide if it’s the right move for you.