What is a Bitcoin Halving
Bitcoin halving is when the rewards of mining bitcoin are halved after every 210,000 blocks are mined until all 21 million Bitcoin has been mined (around the year 2140). The Bitcoin halving mechanism ensures that the Bitcoin is a rare commodity that can be used as a store of value as an inflation-resistant asset and make sure that the amount of Bitcoin in circulation will not increase exponentially.
Halvings are the core of the cryptocurrency economic like the Bitcoin, they assure that the quantity of Bitcoin that can be mined each block drops over time, making BTC more rare and valuable. With the halvings resulting in decreased mining rewards
However, Bitcoin miners have to balance between expenditure and profits. When the price of Bitcoin increases, they are encouraged to mine more coins. On the other hand, if prices don’t increase then they could stop mining new bitcoins without an incentive to do so.
Put it simply, every time that Bitcoin is mined for 210,000 blocks the rewards of mining Bitcoin are cut in half. In other words, the reward for mining Bitcoin is cut in half every 4 years until all 21 million Bitcoin are mined.
Next Bitcoin Halving
There will be only 32 Bitcoin halving and then there will be no more bitcoin halvings and new bitcoin again. Normally, the Bitcoin halving happens every 4 years. The latest and 3rd Bitcoin halving took place in May 2020, the next bitcoin halving is expected to happen sometime in early 2024.
According to the coinmarketcap Bitcoin data, the total Bitcoin supply on April 30, 2022, is 19,026,412 BTC. The next bitcoin halving is the 4th Bitcoin halving which means there are 29 halvings remaining.
How does Bitcoin Halving Work?
To help you understand the Bitcoin halving easier. First, you need to know how Bitcoin is mined and the basics of cryptocurrency.
Bitcoin mining is the process that which people knowns as the miners use the computer (as a virtual pickaxe) to solve the network’s mathematical equations to complete the blocks that are added to Bitcoin’s blockchain. Where a block refers to a file that stores 1 megabyte of transactions (yes, the more transactions, the higher Bitcoin’s network size.
In return, miners receive newly created bitcoins as a reward (within 10 minutes after transactions are verified), Bitcoin halving is when this reward is halving which is occur every 210,000 blocks created (approximately 4-year intervals).
Frequently Asked Questions
Bitcoin halving is when the rewards of mining bitcoin are halved after every 210,000 blocks are mined until all 21 million Bitcoin have been mined.
Bitcoin halving is when 210,000 blocks of Bitcoin are mined (until all 21 million Bitcoin have been mined).
The next bitcoin halving is expected in 2024.
References: Coinbase, Coinmarketcap, Binance Academy
