What is Bitcoin halving?

Oct 7
Up until nearly all 21 million bitcoins have been mined, which is projected to happen by the year 2140, the amount of coins awarded to miners is cut in half every four years. Bitcoin is a rare resource that is resistant to inflation thanks to the halving mechanism.

Bitcoin is a digital currency, but it has a finite supply. Its value proposition is based on verifiable scarcity. Two ideas about scarcity serve as the foundation of Bitcoin technology.
There will only ever be 21 million bitcoins available, and every four years, the number of new bitcoins contributed to the network will be half that. The second idea is known as bisection.

Beginning in 2020, virtual "mining" added 12.5 new bitcoins to the network every 10 minutes." This amount was cut in half to 6.25 in May, and it will decline further to about 3.125 in 2024. This process will go on until all 21 million coins have been minted.

If demand remains constant, halving increases the likelihood that Bitcoin's value will increase by gradually issuing fewer coins. Compared to fiat currencies, which normally lose value over time due to inflation, this is a sharp contrast.

One way the Bitcoin protocol maintains scarcity is through halving, and because of scarcity, millions of people want to buy Bitcoin.

Because it is a valued, scarce asset that is expected to withstand inflation, Bitcoin is frequently compared to gold. However, unlike gold, Bitcoin is a digital asset since it can be sent internationally virtually as simply as an email and because its precise scarcity is known and can be independently verified.

The USGS estimates that the total amount of gold ever mined would fit in slightly more than three Olympic-sized swimming pools, but it is hard to determine the precise amount of gold that remains on the Earth. Every year, there are new gold finds, which causes supply schedules to be unpredictable.

The supply of Bitcoin, on the other hand, is limited and is known; there will only ever be 21 million, and as of the end of 2020, there will only be less than 2.5 million remaining to be mined.

Bitcoin is mined like gold, except it is mined electronically by a network of computers all over the world that compete to authenticate Bitcoin transactions. Bitcoins are used to compensate miners.

Beginning in January 2020, 12.5 new bitcoins were released roughly every 10 minutes; in May, the incentive was cut in half, making 6.25 new bitcoins released every 10 minutes.
Bitcoin mining payouts, sometimes referred to as "block rewards," are half around every four years. Around 2140, when all 21 million Bitcoins have been mined, this process will be completed, and at that point, Bitcoin miners' income will be exclusively derived from network transaction fees rather than directly from the sale of freshly created Bitcoins.

It is impossible for there to ever be more bitcoins. This contrasts with fiat currencies, where the government or central bank can generate additional money at their leisure, potentially causing inflation.

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