{"id":873,"date":"2024-03-22T10:16:56","date_gmt":"2024-03-22T10:16:56","guid":{"rendered":"https:\/\/webs.ddca.se\/fintechscoop\/?p=873"},"modified":"2022-03-22T10:16:58","modified_gmt":"2022-03-22T10:16:58","slug":"how-does-bitcoin-work-iv-halving-and-hash-rate","status":"publish","type":"post","link":"https:\/\/webs.ddca.se\/fintechscoop\/2024\/03\/22\/how-does-bitcoin-work-iv-halving-and-hash-rate\/","title":{"rendered":"How Does Bitcoin Work? (IV): Halving and hash rate"},"content":{"rendered":"\n

Here is the fourth installment of our introduction to the exciting world of cryptocurrencies through the most popular of all: bitcoin. If in previous articles we offered an introduction<\/a>, an analysis of blockchain technology<\/a>, and an explanation of two key aspects, mining and security<\/a>, on this occasion the protagonists are the ‘ halving ‘ and the hash rate.<\/p>\n\n\n\n

Halving<\/strong><\/p>\n\n\n\n

Miners are rewarded with bitcoins for verifying transaction blocks. That reward is divided in half every time 210,000 blocks have been mined, that is, roughly every four years. This event is called ‘ halving ‘ or ‘ halvening ‘.<\/p>\n\n\n\n

The process is designed so that bitcoin mining rewards continue until approximately 2140. When all of the bitcoin is mined from the code and the ‘ halving ‘ is over, miners will continue to be incentivized through fees charged to miners. network users. The hope is that the competition will keep those fees low.<\/p>\n\n\n\n

Hash rate<\/strong><\/p>\n\n\n\n

The global network of miners receives the most recent batch of transaction data, for which it uses a cryptographic algorithm that generates a ‘hash’, a series of letters and numbers that verify the validity of the information without revealing it. By looking at the ‘hash’, one cannot tell which transaction contains the block. However, you can make sure that the block in question has not been tampered with. It would be enough for a single number to be wrong for a completely different ‘hash’ to be generated.<\/p>\n\n\n\n

This technology is what allows the bitcoin network to constantly verify the validity of a block. It would take a long time to be sure that the miner has not tried anything irregular with a batch of transactions. However, since the ‘hash’ of the previous block appears in the new block, if even the smallest detail had been altered, the ‘hash’ would change and be revealed. Even if the alteration was made in a much earlier block, that change would modify all subsequent ‘hashes’, which would raise an alert.<\/p>\n\n\n\n

Despite everything, generating a ‘hash’ does not imply any effort. The process is so quick and easy that hackers could, with a powerful enough computer, insert fraudulent transactions into past blocks of the chain. That is why the bitcoin protocol requires a proof-of-work system, but that is another matter that we will deal with another time.<\/p>\n","protected":false},"excerpt":{"rendered":"

Here is the fourth installment of our introduction to the exciting world of cryptocurrencies through the most popular of all: bitcoin.<\/p>\n","protected":false},"author":1,"featured_media":874,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[228],"tags":[355,301,552,336,82,559,558,257,555],"class_list":["post-873","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-bitcoin","tag-blockchain","tag-blockchain-technology","tag-cryptocurrencies","tag-featured","tag-halving","tag-hash-rate","tag-network","tag-technologies"],"yoast_head":"\nHow Does Bitcoin Work? 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