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Bitcoin Halving: How It Works and Why It Matters
What Is Bitcoin Halving?
A Bitcoin halving event occurs when the reward for mining Bitcoin transactions is cut in half.
It happens approximately every four years or every 210,000 blocks.
The halving policy was designed to counteract inflation by maintaining scarcity.
During a Bitcoin halving, the number of new Bitcoins created with each mined block is halved.
This reduction in block rewards has far-reaching consequences for the Bitcoin ecosystem1.
Why Does It Matter?
Reducing the mining rewards by half decreases the rate at which new Bitcoin is generated.
Due to its rising scarcity over time, Bitcoin has a valuable value proposition as a deflationary asset.
The Bitcoin halving contributes to limiting excessive inflation in the Bitcoin ecosystem2.