Halving the Bitcoin

The Bitcoin halving is a highly anticipated event in the crypto world. If you are new here, understanding what it is and why it matters will help you grasp how Bitcoin's economy functions and its potential value.

What is it? Basically, the halving cuts the reward for mining blocks in half. It's in the code. It happens every four years or so. This means that fewer new bitcoins enter circulation.

The last halving took place on April 20, 2024. The reward decreased from 6.25 to 3.125 bitcoins per block. A historic moment for Bitcoin on its way to the total of 21 million.

The most important

• The halving reduces the mining reward by half every four years, controlling inflation and increasing scarcity.
• The last one was on April 20, 2024, dropping from 6.25 to 3.125 BTC. The next one seems to be falling in April 2028.
• Historically, the price of Bitcoin has skyrocketed after halvings: 9,520% (, 3,402% ) and 652% ( in the following year.
• Halvings hit mining profitability. The less efficient shut down. But it drives innovation.
• Bitcoin has a limit of 21 million. The last one will be mined around 2140, when miners will only receive fees.

What is Bitcoin Halving? The Explanation

) Basic concept

The halving ( sometimes referred to as "halvening") reduces by half what miners earn for validating transactions. It was the idea of Satoshi Nakamoto. It controls inflation. It maintains scarcity.

It's not like regular money. There, central banks print whenever they want. Bitcoin is different. It has a maximum of 21 million. A scheduled calendar. Transparent. The halving makes Bitcoin increasingly scarce.

Operation

In Bitcoin, miners use powerful computers to solve mathematical puzzles. Whoever succeeds adds a new block and receives fresh bitcoins.

At the beginning, it was 50 bitcoins per block. But the protocol states that every 210,000 blocks (about four years), the reward is halved. Automatically. Without human intervention.

Relationship with scarcity

The halving directly affects scarcity. And this is key to its value. By reducing the influx of new bitcoins, a declining supply curve is created. Very different from the infinite printing of fiat money.

About 19.6 million bitcoins have already been mined. Only 1.4 million remain for the next 115 years. This scarcity seems to be what attracts most to Bitcoin as a store of value.

Halving Dates: History Since 2012

( Timeline

Bitcoin has had four halvings:

1. First: November 28, 2012 )Block 210,000### – From 50 to 25 BTC
2. Second: July 9, 2016 ###Block 420,000( – From 25 to 12.5 BTC
3. Third: May 11, 2020 )Block 630,000( – From 12.5 to 6.25 BTC
4. Fourth: April 20, 2024 )Block 840,000( – From 6.25 to 3.125 BTC

) Primer Halving (2012)

Bitcoin was worth about $12. The reward dropped from 50 to 25 BTC. Six months later, it reached $130. A big surge. We can't say it was just because of the halving, but it definitely had an influence.

Second Halving (2016)

In July 2016, Bitcoin was around $650. The reward dropped to 12.5 BTC. Six months later: $900. And then it continued to rise to almost $20,000 in December 2017.

Third Halving (2020)

This arrived in the midst of the pandemic. Bitcoin was at $8,821. Despite the global chaos, six months later it rose to over $15,700. The bullish trend continued to $69,000 in November 2021.

Fourth Halving (2024)

The most recent. Bitcoin was trading at around $63,652. This halving has been different. The market is more mature. There are Bitcoin Spot ETFs in the US. More institutions.

Does the price rise with the Halving? Historical analysis

Effect on price

There seems to be a relationship. Each halving has preceded huge increases:

• After halving 2012: ~9,520% in 365 days
• After halving 2016: ~3,402% in 518 days
• After halving 2020: ~652% in 335 days

Many see halvings as the engine of bullish cycles. The economic logic is simple: if demand remains or grows while new supply decreases... the price goes up.

Note, correlation does not imply causation. The global market, regulations, technology, and macroeconomics also have a significant influence.

( Impact on miners

For miners, the halving is a tough blow. Their earnings are cut in half overnight. This shakes the entire mining economy.

Less efficient miners often go bankrupt. They cannot cover costs. The total network capacity )hashrate### temporarily decreases. But when the price rises, mining becomes profitable again and the hashrate recovers.

It's like natural selection. The most efficient survive. This drives innovation. Miners seek more efficient equipment and cheaper electricity.

When is the next halving? Future calendar

Next halving

It seems it will be in 2028, block 1,050,000. The reward will decrease from 3.125 to 1.5625 BTC. Since blocks take about 10 minutes, we cannot provide an exact date. Probably around April 17, 2028.

( Long-term calendar

The reductions will continue every 210,000 blocks until reaching 21 million:

• 5º )2028###: Drop to 1.5625 BTC
• 6º ###2032(: Drop to 0.78125 BTC
• 7º )2036(: Drops to 0.390625 BTC
• 8º )2040(: Drop to 0.1953125 BTC

This will continue until 2140, more or less. Then the last bitcoin will be mined.

) The future post-21 million

When 21 million is reached, miners will stop receiving new bitcoins. They will only collect transaction fees.

This change raises doubts about the future security of the network. If Bitcoin continues to grow in value and use, perhaps the fees will be a sufficient incentive.

Mining technology will surely improve in the next century. It could remain profitable even with lower rewards. And innovations like Lightning Network or other layer two solutions could change how fees are structured.