Bitcoin halving
A Bitcoin halving is a scheduled event when miners receive half as many new bitcoins for each block. As a result, new bitcoins enter circulation more slowly.
What is a Bitcoin halving?
Miners are computers that verify transactions and add new blocks to the blockchain of Bitcoin. A block is a collection of verified transactions. The miner who adds a block receives new bitcoins as a reward.
A Bitcoin halving reduces that reward by 50%. This happens after every 210,000 mined blocks, or about once every four years. The rule is written into Bitcoin’s code.
The halving is designed to slow the issuance of Bitcoin. A maximum of 21 million bitcoins can enter circulation.
An example of a Bitcoin halving
A Bitcoin halving took place in April 2024. The reward for mining one block dropped from 6.25 to 3.125 bitcoin.
A miner who added a new block after that received half as much new bitcoin as before. This reduces the amount of newly issued Bitcoin over time.
Why is a Bitcoin halving important in crypto?
The halving directly affects miners because their reward gets smaller. Many people also follow the event because fewer new bitcoins are issued afterward. That’s why an upcoming or completed halving often appears in crypto news.
Bitcoin’s price has risen after halvings in the past. That doesn’t mean a halving automatically causes the price to rise. Demand for Bitcoin, regulation, and economic conditions can also affect the price.
After the last bitcoin has been mined, miners will no longer receive new bitcoins as a reward. By design, they will then receive only transaction fees from users.
