🔥🔥Bitcoin Halving — How does the halving cycle work and why is it important?
What is Bitcoin Halving?
The number of new Bitcoins created will be halved every four years on the half day. When#Bitcoinis halved, the rewards given to contributors who ensure the security of the network will decrease by 50%, which directly affects the rate at which new Bitcoins are circulated. We call it a half day.
At the beginning of 2020, 12.5 new Bitcoins were added to the network every 10 minutes through virtual “mining.” In May, this amount was halved to 6.25. In April 2024, this amount will decrease to about 3,125, and this will last until all 21 million bitcoins are mined (it is estimated that this will happen around the year 2140). This process, encoded into the Bitcoin protocol by Bitcoin's creator, Satoshi Nakamoto, is a way to increase its scarcity by limiting the total supply of Bitcoin.
What happens when Bitcoin halves?
When Bitcoin undergoes a halving event, the number of new Bitcoins created will be halved. In other words, miners who verify transactions and add them to the blockchain will have their rewards reduced by 50%.
This event is encoded into the Bitcoin protocol and occurs approximately every four years or after 210,000 blocks.
Why is Bitcoin#halvingimportant?
When Bitcoin halves, the rewards given to contributors who ensure the security of the network will decrease by 50%, which directly affects the rate at which new Bitcoins are circulated. Because there are only 21 million Bitcoins in circulation
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