Halving: Bitcoin’s Supply Control Mechanism You Need to Know
The Bitcoin protocol includes a unique feature called "Halving," which reduces the rewards for mining Bitcoin by half every four years. This event limits the rate at which new Bitcoins are created, effectively controlling the supply. Bitcoin’s first Halving took place on November 28, 2012, reducing rewards from 50 BTC to 25 BTC. Since then, there have been multiple Halvings, and currently, the reward stands at 6.25 BTC per block.
Halving events are significant for Bitcoin’s economy, as they create scarcity by slowing the rate of new Bitcoin production, often driving prices up as demand outpaces supply. Many investors view Halving as a key factor in Bitcoin’s value appreciation, giving it a reputation as “digital gold.”
Fun Fact: Bitcoin’s final Halving is expected around the year 2140, when the last Bitcoin will be mined, capping the supply at 21 million coins. After that, miners will rely solely on transaction fees for rewards.
Posted on November 9, 2024