The 2020 halving was the third halving occurred on May 11, 2020. Many always
speculate that miners will shut down after the halving. The reality is most miners are very smart and
the halving, so they don’t end up shutting down What is Bitcoin Halving any miners. Also, based on the halving mechanics, the next halving is expected to happen somewhere close to April 27, 2024. “Bitcoin halving is important because it reduces the new supply of BTC that is brought into circulation.
- The 2024 halving will likely occur between February 2024 and June 2024.
- After each halving, Bitcoin miners receive half as much Bitcoin for their services.
- Each full node—a node containing the entire history of transactions on Bitcoin—is responsible for approving or rejecting a transaction in Bitcoin’s network.
- However, a halving event is not without complications for miners, as the difficulty level rises, making it even more challenging for small mining companies to turn a profit.
- At that point, there will be 21 million BTC in circulation and no more coins will be created.
Bitcoin halving occurs to ensure that the fixed supply of BTC — 21 million — is reached in a controlled manner while controlling the supply issuance by reducing block rewards by half every four years. Notably, a gradual reduction in block rewards makes the ecosystem’s economic model resistant to money debasing and manipulation. Based on Bitcoin’s quadrennial halving schedule, the next event is expected to happen anytime between April-May 2024.
Does It Even Matter For Bitcoin?
The digital asset exploded to an all-time high (ATH) of $69,000 after block rewards were reduced to 6.25 BTC in 2020. Bitcoin experiences a halving approximately every four years, or, more precisely, every 210,000 blocks. This event is a preprogrammed feature aimed at controlling the supply of the cryptocurrency.
“The incentive is less for miners now to mine Bitcoin. Miners will probably switch to more profitable cryptocurrencies,” Stephen Innes from AXI Corp told the BBC. For example, BTC traded below $20k after the last event but soared to over $69,000 ten months later. According to a November 2021 US Consumer Price Index (CPI) report by the Labor Department, the inflation figure rose to 6.2% for all items, the highest since 1990.
How Does the Halving Impact the Hash Rate?
It’s essentially the complete opposite of governments printing more fiat money,” says Kadan Stadelmann, chief technology officer at Komodo, an open-source technology provider. Blueprint is an independent, advertising-supported comparison service focused on helping readers make smarter decisions. We receive compensation from the companies that advertise on Blueprint which may impact how and where products appear on this site. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impact any of the editorial content on Blueprint. Blueprint does not include all companies, products or offers that may be available to you within the market. This is a key attribute that explains why Bitcoin is described as a deflationary asset, especially as inflation fears continue to escalate.
This put Bitcoin in a prime position to become a store of value due to its scarce nature. Two pieces of “bullish” Chinese bitcoin news have come out recently. While most of the other sites estimate the halving for May, the more likely outcome is an April 2023 reward halving. Thousands of Bitcoiners across the world celebrated the 2016 halving. There were parties in major cities and
countries like Melbourne, Australia, Montreal, Canada, NYC, USA, London, UK,
Dublin, Paris and dozens of other cities.
What happens when all 21 million bitcoins have been mined?
There is also a strict ban on using cryptocurrencies as legal tender or circulating currency. The right for Chinese citizens to hold bitcoin as a virtual commodity, though, has been affirmed https://www.tokenexus.com/ by multiple courts. Finally, it’s important to keep in mind evidence from cryptocurrencies similar to Bitcoin. Take Litecoin (LTC 0.20%), a proof-of-work crypto, just like Bitcoin.