Happy Halving Day! 💕
Bitcoin programmatically halves the block reward approximately every 4 years. The block reward is the amount of bitcoin that the miners receive for successfully adding a block, or group, of transactions to the ledger. It was initially 50 Bitcoin per block.
Prior halvings dropped the reward as follows:
Nov 2012 25 Bitcoin
July 2016 12.5 Bitcoin
May 2020 6.25 Bitcoin
We say every 4 years but that is clearly not the case. It’s actually every 210,000 blocks. Blocks are targeted to be every 10min but with fluctuating difficulty in mining and the amount of hash power doing the mining, it varies.
This block reward is a security measure, incentivizing those with a form of computing power called hash power to maintain and protect the network instead of attack it. As Bitcoin’s network matures and the price of Bitcoin rises, less incentive is needed. With a total of just under 21million Bitcoin ever being produced, the halving reducing the block reward by half, and many early Bitcoin lost, Bitcoin’s value tends to rise over time even looking at year over year lows.
Historically, halving has kicked off a bull run leading to the peaks in the market cycle. Given their earnings being cut in half, halving is a time that could be viewed negatively by miners has actually been a positive for price action and therefore the value of the Bitcoin they’re earning. 👩🏼🏫