What is Bitcoin Halving?

Bitcoin halving is an event programmed into the cryptocurrency’s code that halves the rewards miners receive for adding new blocks to the blockchain. This process helps regulate the supply of the famous cryptocurrency. In this article, we explore what it is exactly and its effects on Bitcoin.

Every four years, cryptocurrency investors mark an important date on their calendar: the Bitcoin halving, an event that impacts not only the price and value of the famous cryptocurrency but also the broader cryptocurrency market. This event, which can be translated to English as “halving,” significantly reduces the supply of Bitcoin and the rewards that miners receive. But what exactly is Bitcoin halving, and when is the next one?

To understand Bitcoin halving, we must first understand the nature of the cryptocurrency itself. Created in 2009 by Satoshi Nakamoto, Bitcoin is a decentralized virtual currency based on cryptography that can be transferred over a digital payment network without intermediaries. This cryptocurrency is supported by blockchain technology, which acts as a public ledger of all transactions made on the network and is obtained through virtual mining, which verifies and adds all transactions to the blockchain.

Through these virtual mining processes, blocks are added to the blockchain network. In these procedures, miners, who can be companies or individuals, use special computers, known as nodes, to solve complex mathematical problems and validate the new block of the blockchain network. When one of the nodes solves the problem, this solution is broadcast to the rest of the computers, which validate it to check if it is correct. If so, this block is added to the blockchain network, and the miner receives their reward: newly minted bitcoins.

Why is Bitcoin Halving Important?

Bitcoin halving is an event that not only affects the amount of Bitcoin in the market but can also influence its price. By reducing the rewards offered to miners, the amount of Bitcoin in circulation decreases, which can create a sense of scarcity that increases demand for the cryptocurrency. This increased demand can translate into a rise in the value of the cryptocurrency.

Additionally, Bitcoin halving is an event that often garners media attention and can attract future investors to the cryptocurrency market, increasing both the demand and volatility of the cryptocurrency.

How Often Does a Bitcoin Halving Occur?

Officially, there is no fixed date for Bitcoin halvings, as this event occurs when 210,000 blocks have been mined. However, this event has historically occurred every four years, which is the approximate time it takes to mine the maximum number of blocks.

So far, there have been four Bitcoin halvings, which took place in 2012, 2016, and 2020, progressively reducing the cryptocurrency’s rewards.

• 2012: The first Bitcoin halving occurred on November 28, 2012, and changed the block reward from 50 bitcoins to 25 bitcoins.
• 2016: The second Bitcoin halving occurred on July 9, 2016, reducing the rewards to 12.5 bitcoins.
• 2020: The third Bitcoin halving occurred on May 11, 2020, reducing the rewards to 6.25 bitcoins.
• 2024: The fourth and most recent halving occurred on April 20, 2024, reducing the rewards to 3.125 bitcoins.

Following historical trends, the next halving is expected to occur in 2028, reducing mining rewards to 1.562 bitcoins.

How Does Halving Affect Bitcoin’s Price?

As mentioned, Bitcoin halving not only affects mining rewards or the number of cryptocurrencies in circulation but also impacts its price. Historically, these events have led to a bullish period where the price of the cryptocurrency increased, although not immediately but rather progressively over the months following the halving.

Each halving is unique, and Bitcoin can be influenced by other market factors that affect its price. Before investing, those interested in the cryptocurrency market should consider the associated risks, which are extremely volatile, and ensure they are well-informed to make the best decisions.

When Was the Last Bitcoin Halving?

The last Bitcoin halving occurred on April 20, 2024, reducing mining rewards to 3.125 bitcoins. Following the event, Bitcoin’s price has remained stable at approximately $64,000.

When is the Next Bitcoin Halving?

The next Bitcoin halving is expected to occur in 2028, on a date yet to be determined. Mining rewards are expected to be reduced to 1.562 bitcoins.