Question: What is Bitcoin Halving ?
Answer:
The "halving" in the context of Bitcoin refers to the event where the reward that miners receive for adding new blocks to the blockchain is halved. This reduction in the reward happens approximately every four years or after every 210,000 blocks mined. The halving is a key feature of Bitcoin's monetary policy and is designed to gradually reduce the rate at which new bitcoins are created, ultimately leading to the maximum supply cap of 21 million bitcoins.
Here's a brief overview of how the halving works:
Initial Reward:
When Bitcoin was launched in 2009, miners received 50 bitcoins as a reward for each block they mined.
First Halving (2012):
After approximately four years, the reward halved to 25 bitcoins per block.
Second Halving (2016):
Another four years later, in 2016, the reward halved again to 12.5 bitcoins per block.
Third Halving (2020):
In May 2020, the most recent halving occurred, reducing the reward to 6.25 bitcoins per block.
The next halving is expected to occur around 2024. The halving process continues until the maximum supply of 21 million bitcoins is reached, which is projected to happen around the year 2140. The halving is significant because it not only impacts the incentive structure for miners but also affects the rate at which new bitcoins enter circulation, contributing to the overall scarcity of the cryptocurrency.
