$BTC Bitcoin Halving: How It Works and Why It Matters
What Is Bitcoin Halving?
AĀ Bitcoin halving eventĀ occurs when the reward for mining Bitcoin transactions isĀ cut in half.
It happens approximately every four years or every 210,000 blocks.
The halving policy was designed toĀ counteract inflationĀ by maintaining scarcity.
During a Bitcoin halving, the number of new Bitcoins created with each mined block isĀ halved.
This reduction in block rewards hasĀ far-reaching consequencesĀ for the Bitcoin ecosystem1.
Why Does It Matter?
Reducing the mining rewardsĀ 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 aĀ deflationary asset.
The Bitcoin halving contributes toĀ limiting excessive inflationĀ in the Bitcoin ecosystem2.
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