#BtcBitcoin Halving: A Beginner's Guide
TL;DR
Bitcoin halving is a process that reduces the rate at which new BTC is created by half approximately every four years, ultimately limiting the total supply of BTC to 21 million.
Bitcoin halving is important because it controls the supply of BTC, limits inflation, helps improve the security of the network and makes it more resilient in the long term.If you are familiar with the world of cryptocurrencies, you have probably come across the term âBitcoin halvingâ. Sounds technical and difficult! In this article we will analyze this concept and talk about the principles of operation in simple words.
What is Bitcoin halving?
Bitcoin is often called "digital gold" because, like gold, its supply is limited. Miners are people who âmineâ digital gold by solving complex mathematical problems and receive new BTC for their efforts. This reward is known as the "block reward". Block rewards not only incentivize miners, but also serve as a way to introduce new BTC into circulation.
During the halving, which occurs approximately every four years (or every 210,000 blocks mined), the reward received by miners is halved. Hence the term âhalvingâ - a halving. This reduction in reward is hard-coded into the Bitcoin protocol.
How does halving work?
In simple terms: before the halving, the block reward is a certain amount of BTC, and after the halving, this amount is halved. The next halving will reduce it again, and so on, until the maximum supply of 21 million BTC is reached.
When Bitcoin was created in 2009, miners received a reward of 50 BTC per block. In 2013, the first halving occurred, and the Bitcoin mining reward dropped to 25 BTC per block. Subsequently, two more halvings occurred in 2016 and 2020, reducing the block reward to 12.5 and 6.25 BTC, respectively. Following this schedule, the next halving is expected in April-May 2024, and the last one in 2140
It is also worth noting that after each halving, Bitcoin demonstrates rapid growth to a new absolute max.#HotTrends #Halving #btc
