What is bitcoin halving?

What is Bitcoin Halving?

Bitcoin halving is a predetermined event in which the reward for mining new blocks on the Bitcoin network is halved, effectively reducing the new Bitcoin supply entering the market. This halving occurs approximately every four years or specifically every 210,000 blocks.

Practically speaking, this means that if a miner was initially receiving 50 bitcoins as a reward, post halving, the reward would reduce to 25 bitcoins.

In this article, we will delve deep into the mechanics of Bitcoin halving, its history, its implications, its influence on Bitcoin’s price, the concept of block rewards, the role of miners, and the future when all Bitcoins have been mined.

How does bitcoin halving work?

Bitcoin’s protocol is designed to reduce the reward miners receive for adding new blocks to the blockchain. This mechanism ensures that the total supply of Bitcoin will never exceed 21 million, preserving its scarcity.

To put things into perspective, think of it as a pie. Initially, large slices are distributed, but as more people want a piece, the slices become smaller to ensure everyone gets a share.

Bitcoin halving history and dates

The Bitcoin network has witnessed three halvings to date, in 2012, 2016, and 2020. The concept of halving was introduced by Bitcoin’s mysterious creator, known only as Satoshi Nakamoto, when the first block of the Bitcoin blockchain, the “Genesis Block” or “Block 0”, was mined on 3 January 2009. Initially, the block reward was set at 50 BTC. Chronologically, Bitcoin’s halving history records the following dates as relevant:

  • Pre-Halving Period/Genesis Block: 2009 – initial block reward of 50 bitcoins.
  • First halving: 2012 – reward reduced from 50 to 25 bitcoins.
  • Second halving: 2016 – reward further reduced to 12.5 bitcoins.
  • Third halving: 2020 – reward halved to 6.25 bitcoins.
Bitcoin Halvings History

Pre-Halving Bitcoin Period

Here are important details of the pre-halving period:

  • Date: 3 January 2009
  • Block Number: 0
  • Block Reward: 50 BTC
  • Bitcoins Created Per Day: 7200

First Bitcoin Halving – 2012

The first halving event took place on 28 November 2012, where the block reward was reduced from 50 BTC to 25 BTC. While there was no immediate surge in price, by the end of 2013, Bitcoin’s value exceeded $1,100.


  • Date: 28 November 2012
  • Block Number: 210,000
  • Block Reward: 25 BTC
  • Bitcoins Created Per Day: 3600
  • Price at the Start: $12
  • Price 100 Days Later: $42
  • Price 1 Year Later: $964

Second Bitcoin Halving – 2016

The second halving event took place on 9 July 2016. While the price did see a rise leading up to the event, it experienced corrections soon after.


  • Date: 9 July 2016
  • Block Number: 420,000
  • Block Reward: 12.5 BTC
  • Bitcoins Created Per Day: 1800
  • Price at the Start: $663
  • Price 100 Days Later: $609
  • Price 1 Year Later: $2,550

Third Bitcoin Halving – 2020

The third halving event took place on 11 May 2020, resulting in a block reward reduction to 6.25 BTC. This halving was unique due to external factors like the coronavirus pandemic affecting global markets.


  • Date: 11 May 2020
  • Block Number: 630,000
  • Block Reward: 6.25 BTC
  • Bitcoins Created Per Day: 900
  • Price at the Start: $8,740
  • Price 100 Days Later: $11,950

When Did the Bitcoin Halvings Happen?

Below is a concise view of the dates of each halving event and the subsequent block reward for Bitcoin miners.

Halving NumberDateBlock NumberBlock Reward (BTC)
1st Halving28 November 2012210,00025
2nd Halving9 July 2016420,00012.5
3rd Halving11 May 2020630,0006.25

When is the next Bitcoin halving event?

Based on the pattern of previous halvings, the next Bitcoin halving event is anticipated to occur in 2024. The exact date can’t be pinpointed due to varying block creation times, but it’s expected when the block count reaches 840,000.

Important details about the next Bitcoin halving event:

  • Date: Expected sometime in 2024
  • Block Number: 840,000
  • Block Reward: 3.125 BTC
  • Bitcoins Created Per Day: 450

The Future of Bitcoin Halvings

Bitcoin is expected to undergo a total of 33 halvings, and the final halving is expected to take place around the year 2140 post which the block reward will effectively become zero. Subsequent to this, miners will only be compensated through transaction fees. While this can pose challenges for the Bitcoin network, the community may find innovative solutions to navigate this transition.

Implications of the Bitcoin halving event

The act of halving the block rewards in the Bitcoin protocol isn’t merely a change in numerical value. It carries profound implications for the entire Bitcoin ecosystem, from the miners who secure the network to the investors and traders who buy, sell, and hold the cryptocurrency. In this section, we will dissect the potential impacts and the various shifts the Bitcoin network may experience post-halving.

The most notable implications of the Bitcoin halving event are:

  • Supply Reduction: A direct decrease in the rate at which new Bitcoins are released into circulation.
    Example: If a fountain was initially pouring 100 liters of water per minute and its flow was halved, it would then pour at 50 liters per minute.
  • Miner Revenue: The income of miners could decrease unless there’s a compensatory rise in Bitcoin’s price.
  • Potential Price Impact: Historically, halvings have led to price surges due to the reduced supply meeting constant or increased demand.

Does the Halving Influence Bitcoin’s Price?

Yes. The reduction in new Bitcoin supply can create a supply-demand imbalance. If demand remains constant or grows while supply decreases, the price could increase.

Bitcoin halving is an event that occurs approximately every four years, reducing the block reward miners receive for validating transactions by half. This scarcity-driven supply reduction tends to impact Bitcoin’s price in several ways:

  • Supply Reduction: Bitcoin halving decreases the rate of new Bitcoin entering the market. This reduced supply, coupled with ongoing demand, can lead to upward price pressure.
  • Increased Scarcity: The reduced supply enhances Bitcoin’s scarcity, often leading to a perception of increased value among investors.
  • Market Sentiment: Halving events can attract media attention and drive investor sentiment. Positive sentiment may lead to increased demand and subsequent price appreciation.
  • Volatility: Following halving events, there’s often increased short-term price volatility as market participants adjust to the changing supply dynamics.
  • Long-Term Trend: Historical data suggests that halvings have preceded significant bull runs in Bitcoin’s price, though past performance is not indicative of future results.
  • Miner Economics: Halvings impact miner profitability, potentially causing less efficient miners to exit the network. This could affect hash rate and network security.

While halving events don’t guarantee immediate price surges, they contribute to the broader narrative of Bitcoin’s scarcity and its potential as a store of value. Factors like market sentiment, macroeconomic trends, and regulatory developments also influence Bitcoin’s price movements

What Are Block Rewards?

Block rewards are the bitcoins awarded to miners for successfully adding a new block to the blockchain. This reward is two-fold: the new bitcoins created in the process and the transaction fees from the block’s transactions.

Example: Think of it as a salary given to workers (miners) for completing a project (block) combined with a bonus (transaction fees).

Why Do Miners Get Block Rewards?

Miners are essential for maintaining the security and integrity of the Bitcoin network. They use computational power to solve complex mathematical problems, a process called Proof of Work. Block rewards incentivize the miners to commit resources to this process.

Just as a security guard is paid a salary to protect an establishment, miners are rewarded for protecting the Bitcoin network.

What Happens When There Are No More Bitcoins Left?

Once all 21 million Bitcoins have been mined, miners will no longer receive block rewards in the form of new Bitcoins. However, they will still earn transaction fees. This shift could impact the incentive structure for miners, potentially leading to higher transaction fees or changes in the network’s security dynamics.

Example: When a gold mine runs out of gold, the miners might start charging for other services like tours or equipment rentals, shifting their revenue source.

Bitcoin Halving: Conclusion

In conclusion, Bitcoin halving is a core mechanism built into the design of Bitcoin to ensure its scarcity and value. By understanding this and other facets of the cryptocurrency world, one can better navigate the ever-evolving landscape of digital finance.

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