Bitcoin Halving

Extracted Attributes

• Type

  Programmed event within Bitcoin protocol

• Frequency

  Approximately every 4 years or every 210,000 blocks

• Mechanism

  Reduces block reward by half

• Primary Purpose

  Control Bitcoin supply rate, ensure scarcity, prevent inflation

• Impact on Miners

  Reduces rewards for adding new blocks to the blockchain

• Historical Price Effect

  Historically followed by new all-time highs (not a guarantee of future results)

• Total Bitcoin Supply Limit

  21 million coins

• Monetary Policy Implication

  Makes Bitcoin deflationary and potentially resistant to inflationary pressures

Timeline

• First Bitcoin Halving, reducing the block reward from 50 BTC to 25 BTC. (Source: EY, LSEG)

  2012-11-28

• Second Bitcoin Halving, reducing the block reward from 25 BTC to 12.5 BTC. (Source: EY)

  2016-07-09

• Third Bitcoin Halving, reducing the block reward from 12.5 BTC to 6.25 BTC. (Source: EY)

  2020-05-11

• Fourth Bitcoin Halving, further reducing mining rewards and anticipated to significantly impact the crypto market. (Source: LSEG)

  2024-04-19

Bitcoin protocol

The bitcoin protocol is the set of rules that govern the functioning of bitcoin. Its key components and principles are: a peer-to-peer decentralized network with no central oversight; the blockchain technology, a public ledger that records all bitcoin transactions; mining and proof of work, the process to create new bitcoins and verify transactions; and cryptographic security. Users broadcast cryptographically signed messages to the network using bitcoin cryptocurrency wallet software. These messages are proposed transactions, changes to be made in the ledger. Each node has a copy of the ledger's entire transaction history. If a transaction violates the rules of the bitcoin protocol, it is ignored, as transactions only occur when the entire network reaches a consensus that they should take place. This "full network consensus" is achieved when each node on the network verifies the results of a proof-of-work operation called mining. Mining packages groups of transactions into blocks, and produces a hash code that follows the rules of the bitcoin protocol. Creating this hash requires expensive energy, but a network node can verify the hash is valid using very little energy. If a miner proposes a block to the network, and its hash is valid, the block and its ledger changes are added to the blockchain, and the network moves on to yet unprocessed transactions. In case there is a dispute, then the longest chain is considered to be correct. A new block is created every 10 minutes, on average. Changes to the bitcoin protocol require consensus among the network participants. The bitcoin protocol has inspired the creation of numerous other digital currencies and blockchain-based technologies, making it a foundational technology in the field of cryptocurrencies.

Web Search Results

• Bitcoin Halving Countdown in 899 Days

  Bitcoin Halving, is a fundamental event pre-programmed in to the Bitcoin protocol that reduces the amount of Bitcoin created for each valid block added to the Bitcoin blockchain. Approximately every four years or every 210,000 blocks, the block reward is cut in half, which is why this event is referred to as the Bitcoin halving event. [...] The Bitcoin Halving event is a critical aspect of the Bitcoin protocol and holds substantial significance for various reasons. Firstly, it underscores Bitcoin's unique monetary policy, as it occurs approximately every four years and reduces the rate at which new Bitcoins are mined by half. This predictable and transparent supply adjustment sets Bitcoin apart from traditional fiat currencies, making it deflationary in nature and potentially more resistant to inflationary pressures. [...] Bitcoin halving, is a predetermined event that occurs every 210,000 blocks or approximately every four years. Its primary purpose is to control the rate at which new Bitcoins are introduced into circulation, ultimately limiting the total supply to 21 million coins. This scarcity is a fundamental aspect of Bitcoin's design and one of the factors contributing to its perceived store of value.

• Bitcoin Halving Countdown | CoinGecko

  To sustain the emission and increase scarcity, the number of bitcoin emitted per block is regularly reduced. This process of reducing the bitcoin emission per block is known as Bitcoin Halving. After a predetermined block height (a number that is used to indicate a particular block), the amount of bitcoin emitted per block is reduced to half of the previous number. For bitcoin, new halving occurs after an interval of 210,000 blocks or 4 years. [...] ### How Does Bitcoin Halving Affect The Price of Bitcoin? Halving is a double-edged sword, for different groups, it means different things. For investors, halving means a reduction in the frequency at which new bitcoins are generated and less propensity for miners to sell. Historical data indicates a positive effect of the expected scarcity on the investors’ psychology. Investors expect a rise in the value of bitcoin and more buys could follow. [...] On the aspect of bitcoin’s economy, halving creates a scarcity pattern for bitcoin. Against a varying demand, bitcoin halving reduces the rate at which bitcoin is supplied. The demand for bitcoin has seen a consistent rise over the years, this has been met by a constant decrease in the supply rate.

• The Bitcoin Halving explained | EY - Switzerland

  The Bitcoin halving is a distinctly innovative concept in the cryptocurrency space. This process directly affects the rewards that Bitcoin “miners” earn for adding a new block to the blockchain. In this context, miners refer to powerful computers that try to generate a cryptographic number (hash) that matches certain criteria. The Bitcoin mining process does not only add transactions to the Bitcoin blockchain, but also verifies and authenticates transactions within Bitcoin’s decentralized [...] ### Historically, there have been three Bitcoin halving events until today 1. The first halving took place on November 28, 2012, and saw the block reward drop from 50 BTC to 25 BTC. 2. The second halving took place on July 9, 2016, and saw the block reward being cut from 25 BTC to 12.5 BTC. 3. The third and latest halving took place on May 11, 2020, and brought the mining rewards down from 12.5 BTC to 6.25 BTC. [...] The upcoming 4th Bitcoin halving in mid-April 2024 is poised to impact the crypto market significantly. The event, integral to maintaining Bitcoin’s value through scarcity, could shape its market value, mining operations, and profitability. While the decrease in mining rewards possesses potential security threats, it also offers a shift towards more energy-efficient mining, thus reducing Bitcoin’s environmental impact. The halving event is anticipated to fuel the growth of the entire crypto

• What is the Bitcoin halving? - Fidelity Investments

  ### What is the Bitcoin halving? The Bitcoin halving is a programmed event that cuts the amount of mining rewards in half each time 210,000 blocks have been mined, which occurs approximately every 4 years. [...] Bitcoin halvings are periodic events where the amount of rewards bitcoin miners receive are cut in half. The goal is to help prevent inflation as new supply is released into circulation, as well as to ensure scarcity. Historically, bitcoin's price has made new all-time highs following the event. However, remember that past performance is no guarantee of future results.

• Bitcoin halving 2024

  What is Bitcoin halving?As a core component of Bitcoin’s design, the halving is a scheduled recalibration of the rewards that are earned for mining the asset. As an asset that uses a Proof-of-Work consensus mechanism to reach an agreement on the state of its network, Bitcoin provides rewards to miners who generate new blocks. On the Bitcoin blockchain, after every 210,000 blocks are mined, or approximately every four years, there is a mechanism called the “halving” that reduces the creation [...] The first Bitcoin halving occurred on November 28, 2012, and reduced the reward for mining a block from 50 BTC to 25 BTC. At the time of this halving, BTC was priced at ~$12.20. This halving marked the beginning of Bitcoin’s deflationary reward supply and occurred early in the asset’s life cycle prior to its widespread recognition as an investable asset. [...] April 22, 2024 Bitcoin halving 2024 View the report PDF - 705.7KB Overview 1. Overview 2. Themes 3. Research and Insights Overview In a year filled with milestones, the much-anticipated bitcoin halving event took place on April 19, 2024, marking a historic moment in the world of digital assets. We provide an overview of bitcoin (BTC) halving and review its impact on supply and market structure, the effects of previous halvings and potential changes to the market.