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.