What Is a Bitcoin Halving?
In all their infinite wisdom, Bitcoin’s anonymous inventor Satoshi Nakamoto decided that only 21 million BTC would ever exist. They wanted new coins to be released gradually into the market — but at the same time, it was crucial for a generous supply of Bitcoin to start circulating sooner rather than later.
New BTC are given to Bitcoin miners as their Bitcoin block reward when they verify blocks of transactions. To begin with, the reward stood at 50 BTC per block. This would have been worth under a dollar back in 2009 — but at today’s rates (April 28), the price of Bitcoin would’ve gotten you a windfall of around $388,000.
Such generous terms wouldn’t last forever. Under Bitcoin’s rules, rewards would only stay this high for the first 210,000 blocks, and then they would be cut by 50%. By this point, half of the BTC that would ever exist — 10.5 million — were out in circulation.
For this upcoming Bitcoin halving (also known as halvening), the total number of Bitcoin mined by miners per block will be reduced from 12.5 BTC to 6.25 BTC.