- Bitcoin halving, a key event in the bitcoin network’s operation, occurs roughly every four years, cutting the block reward given to miners in half.
- The halving is an integral part of bitcoin’s design, serving to control inflation, enhance scarcity, and manage market forces.
- The fourth halving is expected to occur on April 19, 2024, around 50 days from now.
The halving of the mining reward, which occurs when it is cut in half, is one of the most significant occurrences on the bitcoin network. This April is predicted to bring about the next halving. But what exactly is the halving, why does it matter and why should you care? Here is everything you need to know about the bitcoin halving.
1. What is the bitcoin halving?
On the bitcoin blockchain, a “block” is a file holding one megabyte (MB) of transaction data for bitcoin. By employing specialised hardware to solve a challenging mathematical problem and generate a random 64-character output known as a “hash,” “miners” compete to add the next block. Once the process is complete, the block is locked to prevent modification. Miners earn bitcoin by finishing these blocks.
A bitcoin halving is an event during which miners get 50% less bitcoins for validating transactions since the reward for mining new blocks is half. Bitcoin halvings are planned to happen once every 210,000 blocks, or around every four years, until the network has produced all 21 million of the cryptocurrency.
2. When is the next bitcoin halving?
The upcoming bitcoin halving is anticipated to take place in April 2024 with the completion of 740,000 blocks. The block reward will decrease from 6.25 to 3.125 bitcoins as a result.
The network averages one block every 10 minutes, but the precise date of the halving is still unknown because of the fluctuations in the time required to produce new blocks.
According to Swan Bitcoin, the predicted fourth bitcoin halving date is April 19, 2024, only 50 days away!
3. Bitcoin halvings: history and dates
| Event | Date | Block reward | Total new bitcoins during events |
| First halving | November 28, 2012 | 25 new BTC | 5,250,000 BTC |
| Second halving | July 9, 2016 | 12.5 new BTC | 2,625,000 BTC |
| Third halving | May 11, 2020 | 6.25 new BTC | 1,312,500 BTC |
| Fourth halving | Expected April, 2024 | 3.125 new BTC | 656.250 BTC |
Also read: Bitcoin now 80 trillion times more difficult to mine, with halving set for April
Pop quiz
What is the reward per block during the fifth bitcoin halving?
A. 12.5 BTC
B. 6.25 BTC
C. 3.125 BTC
D. 1.5625 BTC
The correct answer is at the bottom of the article.
4. Why does bitcoin halve?
“Bitcoin halving is representative of how sound money should function. Bitcoin is the opposite of fiat currencies such as U.S. Dollars or Euros. It has a deflationary supply issuance, while fiat has an inflationary supply issuance.”
Kadan Stadelmann, CTO at Komodo.
Bitcoin’s halving is a result of the design of its software, which was developed by an enigmatic individual or group known by the pseudonym ‘Satoshi Nakamoto’.
Though Satoshi hasn’t said it clearly, many have theorised that the mechanism was initially intended to distribute coins more rapidly in order to encourage users to join the network and mine new blocks.
An alternative explanation is that the quantity of new coins rewarded per block is fixed since the halvings were implemented to bring deflationary measures to the currency.
Kadan Stadelmann, CTO at Komodo, shared his view on bitcoin halving, stating that bitcoin halving is an example of how sound money ought to operate. He added: “Bitcoin is the opposite of fiat currencies such as U.S. Dollars or Euros, with its deflationary supply issuance contrasting the inflationary supply issuance of fiat.”
5. How might the bitcoin halving impact BTC’s price?
“The effects of bitcoin halving in the cryptocurrency market are varied potentials. It has been observed that in the past, a halving event preceded mega price hikes in bitcoin due to increased scarcity for new bitcoins. However, one has to remind oneself that as the bitcoin market matures over time. ”
Guy Sheetrit, CEO at OTT Inc
How the next halving will affect the price of bitcoin is yet unknown. Many analysts predict that the price will rise following the event as the number of new coins is limited, following the same trend as the previous three halvings.
This view aligns with the perspective of Guy Sheetrit, CEO at OTT Inc, who believes that bitcoin halving has diverse impacts on the cryptocurrency market. Historically, halving events have often preceded significant price surges in bitcoin, as they create increased scarcity for new bitcoins. However, it is crucial to acknowledge that as the bitcoin market evolves, these impacts may be mitigated by greater institutional involvement and regulatory advancements.
Any increase in price, though, will be dependent upon how the market for bitcoins develops during the halving. It is not guaranteed that demand will rise or even stay the same. The market has evolved considerably since the last halving in 2020, with numerous well-established cryptocurrencies now.
Also read: Bitcoin reaches $44,000 high, faces resistance: returns to $42,000
6. Why does the bitcoin halving matter?
After the halving, there is often a spike in bitcoin volatility. As less bitcoin is made accessible for mining, the value of the remaining bitcoin increases and becomes a more alluring asset for investors.
The price of bitcoin has historically been driven upward by previous halvings. On the other side, the BTC ecosystem will almost definitely be impacted in a number of ways by the upcoming halving.
The number of bitcoin miners is mostly expected to drop as the economic advantage of mining becomes less alluring and, for less skilled miners, unprofitable.
7. Is bitcoin halving good or bad?
“The halving is almost like the Bitcoin New Year. “
Graeme Moore, head of tokenisation at Polymesh Association
In the past, the halving supply shock has signaled the beginning of significant bull markets for bitcoin.
“Many bitcoiners throw parties on the halving date as the previous epoch comes to an end and a new epoch begins. The halving is almost like the Bitcoin New Year, ” said Graeme Moore, head of tokenisation at Polymesh Association.
However, Kadan Stadelmann, CTO at Komodo, oversees negative potentials behind bitcoin price spikes. “There are two potential negative outcomes. First, the fervour around bitcoin halving may at least temporarily draw attention away from other crypto projects. Second, bitcoin mining may become less profitable over time each time the block reward decreases.”
The correct answer is D. Upcoming April halving is the fourth halving, and the fifth halving will be in 2028.
