Halving Event
A halving event is aimed at reducing inflation by lowering the amount of new coins created and cutting in half mining rewards, given to cryptocurrency miners as compensation for validating blocks. Mining is used to permanently add transactions to the blockchain, and miners are incentivised with coins to secure the network.
Approximately every four years, Bitcoin performs a halving event, where the amount of new bitcoins created per block is halved. This scarcity measure limits supply and can push the BTC price up.
Bitcoin’s first halving event occurred in 2012, when the block reward was decreased from 50 bitcoins per block to 25. The second halving was in July 2016, when the reward per block was reduced from 25 bitcoins per block to 12.5. The third halving happened in May 2020, when block rewards decreased from 12.5 bitcoins per block to 6.25.
The most recent Bitcoin halving event occurred in April 2024, where the reward was reduced from 6.25 to 3.125 bitcoins per block mined. The fifth halving is estimated to occur in 2028, with the reward halved to 1.5625 bitcoins per block.
Key Takeaway
A halving event is aimed at reducing inflation by lowering the amount of new coins created and cutting mining rewards in half.