- Bitcoin crosses $10,000 on Friday. The entire cryptocurrency market value jumped by more than $13 billion.
- Part of the rise in bitcoin’s price has been anticipation of a technical event known as “halving.”
- Bitcoin is not issued by a centralized authority.
- “Miners” use computers to compete with each other to solve complex math problems to validate bitcoin transactions. Whoever “wins” gets rewarded a new bitcoin.
- Currently, miners receive 12.5 bitcoin per block mined. The rewards are halved every four years to keep a lid on inflation. On May 12, the reward per miner will be cut in half again, to 6.25 new bitcoin.
- The effect is that the supply of bitcoin coming onto the market is reduced and thus, the price typically increases.