OBTC - The Bitcoin Halving: What Is It? And Why Does It Matter?
2024-04-17 15:20:00 ET
Summary
- Approximately every four years, a 'bitcoin halving' occurs, cutting the rate at which new bitcoin is issued in half. These scheduled events enable bitcoin to be slowly distributed into the market while maintaining its scarcity.
- Halving events are hard-coded into Bitcoin’s source code and are critical to bitcoin’s value proposition as a transparent cryptoasset with a finite supply.
- The next bitcoin halving is expected to occur around April 20, 2024. At this time, the amount of bitcoin created with each block of transactions will fall to 3.125 from 6.25 bitcoin.
By Jay Jacobs
What is a Bitcoin halving?
Bitcoin miners are compensated for proposing blocks and extending the blockchain with newly issued bitcoin, known as block rewards. But to ensure bitcoin's scarcity and maintain its codified 21 million supply cap, new issuance is designed to slowly decline through time and eventually fall to zero. The mechanism for achieving Bitcoin's disinflationary monetary policy is known as a bitcoin halving. Approximately every four years a "halving" occurs and new bitcoin issuance is cut in half....
The Bitcoin Halving: What Is It? And Why Does It Matter?