Bitcoin halving, also known as “the halvening,” is a recurring event in Bitcoin’s history that cuts the reward for mining Bitcoin transactions in half. This happens roughly every four years.
Here’s a breakdown of what it means:
- Miners secure the Bitcoin network by solving complex puzzles with computers.
- As a reward for their work, miners get a certain amount of Bitcoin for each block they solve. This reward is called the block reward.
- During a halving event, the block reward is cut in half. This reduces the rate at which new Bitcoins enter circulation.
The key thing to remember is that there’s a limited supply of Bitcoins (around 21 million). Halving makes this limited supply even tighter. In theory, this scarcity could drive up the price of Bitcoin due to higher demand and lower supply.
The next halving event actually just happened, around April 16, 2024. The block reward is now 3.125 Bitcoin per block.