A Simple Introduction to Bitcoin Halving
Once every four years, there is a major event involving the Bitcoin protocol. The “halving” is a predetermined 50% reduction in the supply of newly created Bitcoin. It has been baked into the protocol from the beginning and is a feature that cannot be changed without a hard fork to the entire system. Every bitcoin block, miners earn the predetermined block reward plus any fees for transactions that were included in that block.
The Bitcoin Blockchain first started with a 50 Bitcoin reward for the miner that solved a block. Every 210,000 blocks, or approximately four years based on an average of 10 minutes per block, the block reward is cut in half. The current block reward is 6.25 Bitcoin. This constant downward pressure on supply coupled with constant or increasing demand, will lead to an increase in price over time.
Bitcoin Halving Explained!
This blog series will discuss some of far-reaching ramifications of this feature of the protocol. It will also discuss the business cycle bitcoin miners endure every four years because of the halving.