What is Bitcoin Halving?
Bitcoin halving, also known as bitcoin block reward halving, means that the reward received for producing new blocks is halved approximately every four years. This means that after the halving, each mined block is worth half the amount of bitcoin that was awarded before the halving. When Bitcoin came into existence in 2009, its block reward was 50 BTC. The block reward halves about every four years based on block time and will eventually reach its finite total supply of 21 million.
So far, Bitcoin has been halved three times, occurring in November 2012, July 2016 and May 2020. The fourth bitcoin halving is expected to occur in May 2024. By that time, the reward will decrease from 6.25 to 3.125 BTC.
Why does Bitcoin halve?
According to supply and demand theory, if a commodity does not limit its supply in circulation, excessive supply will occur, and its price will fall. This concept applies to bitcoin too. Using halving to limit its amount and circulation can increase scarcity and make it more valuable. The block reward of Bitcoin is programmed to cut in half every 210,00 blocks, which can slow down the inflation rate and allow new coins to enter into circulation in a controlled manner. Bitcoin halving is also a distinct feature that sets it apart from traditional fiat currencies.
Historical Bitcoin halving schedule
Satoshi Nakamoto published “A Peer-to-Peer Electronic Cash System” and introduced the concept of Bitcoin for the first time.
Satoshi Nakamoto mined the genesis block and marked that bitcoin came into existence. At that time, the block reward was 50 BTC.
Satoshi Nakamoto stipulated that Bitcoin halves every 21 0,000 blocks, until all the 21 million bitcoin have been mined, estimated to take place in the year 2040.
First Bitcoin halving. The block reward was reduced to 25 BTC
Second Bitcoin halving. The block reward was reduced to 12.5 BTC
Third Bitcoin halving. The block reward was reduced to 6.25 BTC
The upcoming fourth halving is estimated to take place in May, 2024. After this halving, the block reward will be 3.125 BTC.
Halving Schedule in 2020
|Coin||Consensus mechanism||Estimated time||Halving No||Current block reward||Reward after halving||Inflation rate after halving(2020-02-13)|
|ETC||PoW||2020-03-17（Halved）||First Halve||4||3.2（Reduced by20%，not in half）（Current）||6.57%|
|DASH||PoW+PoS||2020-05（Halved）||First Halve||3.6||3.34（Reduced by 7.14%，not in half）||7.24%|
|Sero(sero)||PoW+PoS||2020-04-14（Halved）||First Halve||Details||Block reward will decrease from 35.6 to 17.8（Current）||51.28%|
|BCD||PoW||2020-08-02 （Halved）||First Halve||125||62.5||1.76%|
Trend of historic Bitcoin price and cost of hash power after halvings
Trend chart of Bitcion circulation and mining reward
Trend of Bitcoin future halvings and yearly inflation rates
Learn more about Bitcoin Halving
What is Bitcoin?
What is Blockchain?
What is Bitcoin?(Video)