What is a halving?
A halving (sometimes ‘halvening’) is when the payout for mining new blocks is halved, meaning miners receive 50% fewer coins from mining.
Halvings are scheduled to occur once every number of blocks depending on the chain, in Zel’s case loosely every two-and-a-half years, until the maximum supply of 210 million Zel has been generated on the network.
Halvings are important events for traders and node operators since they lower the number of new coins generated on the network. This limits the supply of new coins, so prices could rise if demand remains strong. This has happened in the months before and after previous Bitcoin halvings, making Bitcoin’s price move rapidly. However, the circumstances of each halving are different and demand for Zel can fluctuate wildly.
Zel traces its roots back to Bitcoin the whole concept that started off driving cryptocurrency “guaranteed scarcity” meaning that the code ensures there is a finite amount of currency just like physical commodities, for example, gold, and silver. This is old-school “save to get rich” thinking applied to economics. A very similar example is a physical mine which will produce less and less making supply scarcer as time goes on.
Zel can under no circumstances start changing the number of Zel mined in each block as people have looked at the speed of development and compared it to the speed of monetary supply etc and used that to make their investment decisions, anything else would be an ultimate violation of trust.
The answer is, it depends if you are mining to sell daily, no, you will be in for a hard time with at least partially reduced income for a while. If you are mining for longer-term gain (a few months minimum), the lowered supply will increase the price of your mined coins the caveat being that this is based on halvings in other coins.
“Maybe!” Is about an exact answer as it is possible to give for that. If you are looking to cash in on the buildup in price usually associated with a halving, you are probably already too late to join the party for this halving! But if you are looking longer term, you can join the community on Discord or Telegram and see if what is going on fits your risk/investment profile. Most importantly though when joining the community is verifying for yourself the veracity of all the information provided by the project and use that as an indicator for any potential financial decisions.
On behalf of the Zel Team, thank you for taking the time to read this.
-Bigpiggy01
Originally published at https://medium.com on July 30, 2020.
