What is Bitcoin Halving?
To explain Bitcoin halving we need to find a general definition for all halving in the crypto space. Ideally, a block halving in cryptocurrency is the process by which the rate of new cryptocurrency production is reduced by half or 50%. Since miners are the ones that ‘literally’ produce cryptocurrency, it will, therefore, refer to the periodic occurrence where the reward per Block given to miners is reduced.
Thus, Bitcoin halving is the mechanism that is activated periodically on the Bitcoin Network that reduces the rate at which Bitcoin is mined. For Bitcoin specifically, this occurs roughly every 4 years. For example, the current reward to miners for a block is at 12.5BTC, after the next Bitcoin halving event, the reward will reduce to 6.25BTC. This event is automatic as it is already written into Bitcoin’s underlying cause by its creator, Satoshi Nakamoto about a decade ago. This occurrence cannot be stopped or hindered.
The Significance of Halving Event
Halving is the core of Bitcoin’s economic model, it ensures that Bitcoin is issued at a steady pace at a reducing rate, more like the half-life decaying of a radioactive element.
There are just 21 million bitcoins in total that can be produced and currently, about 86% (18 million BTC roughly) have been mined. The issuance was initially set at 50BTC per Block produced every 10 minutes and was set to decay every four years as it was predicted that the network will become more valuable. This model is a deflationary economic model since Bitcoin has an upper limit of 21 million BTC.
How Many Halvings Have There Been And How Many Can We Have?
To this day, Bitcoin has had just two halvings in November 2012 and July 2016 respectively.
The next halving event has already be predicted to happen in May 2020, roughly in less than 77 days as of this article.
There’ll only ever be 32 halving events on the Bitcoin Network after which the maximum Bitcoin supply (21 million BTC) should have been reached. At this point, the transaction rate will probably increase according to experts since there is no more BITCOIN mining and there’s maximum circulation.
1st Bitcoin Halving:
Block Height: 210,000
Block reward: 50BTC
2nd Bitcoins Halving:
Block Height: 420,000
Block reward: 25BTC
3rd Bitcoins Halving:
Year; May 2020
Block Height: 630,000
Block reward: 6.25BTC
4th Bitcoins Halving:
Block Height: 840,000
Block reward: 3.125 BTC
When will Halving Stop?
Bitcoin Halving will stop when all the Bitcoin has been mined and issued.
The protocol for Halving is based on every production of 210,000 Blocks. That is, for every 210,000 blocks produced, the BTC issued per Block production is halved. It takes about 10 minutes for a block to be produced. Calculations show that it takes about 4 years for 210,000 blocks to be produced.
The last Bitcoin will be mined in the year 2140 provided the protocol for Bitcoin mining is not changed.