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A halving, or halvening, is when the payout for mining new blocks is cut in half. Halvings occur at regular periods. It takes approximately four years for Bitcoin’s block reward to be halved.

Halving is a system that aims to solve the problem of bitcoin emission. it does this by automatically raising block rewards after a set period of blocks.

What exactly is halvening?

During a halvening, block subsidies or incentives for validating transactions are reduced by half, thereby eliminating them (or halving). Because it slows the rate at which new coins and tokens enter circulation at any one time, it increases scarcity by issuing fewer coins and tokens in circulation.

These events are pre-programmed into the code before it is executed. Bitcoin rewards, for example, are scheduled to decrease every four years. This trend will continue until the last Bitcoin is mined, which is expected to occur in the year 2140.

By utilizing halvenings, it is possible to forecast the circulation time at any point in time, making the emission schedule more predictable. This enables the calculation of exact token values. The staking or mining incentives of virtually all non-pre-mined cryptocurrencies decline over time as the value of the cryptocurrency decreases. When starting a new business, it is common practice to start with the absolute minimum of supply possible in order to increase the initial value of the company.

Are bitcoin halvings good for investors?

In short, yes, because it is intended to reduce inflation and control the currency’s supply. Halving addresses the problem of bitcoin emission control while simultaneously attempting to contain cryptocurrency inflation. Bitcoin algorithm automatically changes the quantity of new money released to postpone the conclusion of the emission period.

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