7 min readOct 11, 2023


Who will sign the block by finding the desired hash, and who will become the creator of a new block, is the eternal battle of Bitcoin miners, but the real battle begins every 210,000 blocks. Why? Because of a rule encoded in the Bitcoin source code, which dictates the halving of rewards for Bitcoin miners, better known as Halving — a pure phenomenon within the Bitcoin system.


Satoshi wrote that he compared it to the discovery and mining of gold:

“By convention, the first transaction in a block is a special transaction that starts a new coin owned by the creator of the block. This adds an incentive for nodes to support the network, and provides a way to initially distribute coins into circulation, since there is no central authority to issue them. The steady addition of a constant amount of new coins is analogous to gold miners expending resources to add gold to circulation. In our case, it is CPU time* and electricity that is expended.”

*A CPU is the core component of a computer, responsible for executing tasks. “CPU time” refers to the duration the CPU dedicates to process specific instructions from software or the computer’s operating system. In simpler terms, it’s how long the CPU works on a given task.*

But what exactly is Halving?

We could assert that Halving is a sophisticated approach to deflation, but at the same time, an extremely demanding process within this decentralized system. Halving in Bitcoin is like a set of rules written in the code, including important details like the nSubsidy as a starting reward of 50 BTC for each block. This process happens every 210,000 blocks (approx. 4 years), and during each halving event, the rewards are halved, adjusting the way they are distributed. It is also clearly stated that with the last 64th halvings, the final Bitcoin supply will reach the maximum quantity of 21 million Bitcoins, and the halving code turns to 0, which will happen around the year 2140.

*nSubsidy is an object created in the code, and it determines the number of Bitcoins that will be released per block.*

So, what happens behind the scenes of mining?

Computers connected to the network search for the correct hash, which is essentially a message from the previous block. In addition to the hash, there is also the block’s sequential number and all recorded transactions known as TXNs. The miner’s task is to find the correct hash that will release Bitcoin into the network and seal the block. As a reward for successfully “finding” the hash, miner will receive a certain amount of Bitcoins. The hash that miners are looking for is also known as SHA-256*, which means it is 256 bits long. What’s interesting is that every few thousand blocks, the system calculates how many miners are searching for the correct hash. If it determines that there is an increased number of miners searching for the hash, the system makes it more difficult to find it, thus adjusting the time frame for closing the block (approximately 10 minutes). The system works the same way in reverse as well.

*SHA-256 (Secure Hash Algorithm) is a cryptographic hash/function (it’s like a code that transforms information in an unreadable jumble of characters) is a kind of ‘signature’ for a text or a data file. SHA-256 is 256 bits long.*

Bitcoin’s creator, Satoshi Nakamoto, wrote in the code the initial reward, which was 50 Bitcoins, equivalent to 500,000,000 satoshis/SATs (the smallest unit of Bitcoin). It is difficult to predict at what price Bitcoin will trade, but based on historical values after halvings and bull runs following halvings, it is likely that the value of Bitcoin will increase significantly.

The fact is that we have witnessed a significant increase in the value of Bitcoin after each halving, which typically reaches its peak between 350 and 550 days so far, after the previous halving. We see the same patterns in Bitcoin’s value after each halving, with the Fibonacci tool it can be confirmed a maximum decrease in Bitcoin’s value of -89% between the previous halving and the highest price during each halving. A bright future awaits, and it will be fascinating to track its value.

Data for each Halving event

Let’s analyze how the price behaves following each halving.

#1 Halving:
The price on the halving day was $12.20
On day 367 after Bitcoin halved, the price made a peak at $1,163 (+9,400%)
The price then dropped to $152 from its halving high, which is an 87.8% decrease in value

#2 Halving:
The price on the halving day was $640.56
On day 526 after Bitcoin halved, the price made a peak at $19,666 (+2,900%)
The price then dropped to $3,122 from its halving high, which is an 87% decrease in value

#3 Halving:
The price on the halving day was $8,605.03.
On day 548 after Bitcoin halved, the price made a peak at $69,000 (+705%).
The price then dropped to $15,479 from its halving high, which is an 88.6% decrease in value.

Let’s delve deeper into the concept of halving and ask ourselves: who is impacted the most when a halving occurs?

Definitely, miners are the ones who feel the impact of halving the most, as they face the challenge, which is the costs of mining, and guess what? They remain the same, while the reward for the same work is halved.

So, the question arises, is Bitcoin mining still profitable?

The first option to maintain profitability is to minimize mining costs, as miners now receive half the reward for the same amount of energy consumption, which has its cost. You might wonder if this could jeopardize Bitcoin’s future. It’s hard to predict, but we observe that the code is improving with new solutions. Miners are also reducing their costs by choosing alternative sources of energy that are more cost-effective or even free. These smart decisions are not only beneficial for miners but also address the environmental issues raised by the Paris Agreement, offering excellent opportunities to increase interest in Bitcoin and cryptocurrencies in general. At times, miners face a challenge when the expenses of mining become more than what they’re making from Bitcoin. So, some miners can’t keep up with the costs or don’t have enough money to cover them. When this happens, they decide to halt mining operations.

*The Paris Agreement is a legally binding international treaty on climate change*

On Sunday, January 11, 2009 an interesting conversation was recorded on the internet between Satoshi Nakamoto and Hal Finney.

Satoshi Nakamoto wrote:

“Announcing the first release of Bitcoin, a new electronic cash system that uses a peer-to-peer network to prevent double-spending. It’s completely decentralized with no server or central authority.

Hal Finney replied:

“Congratulations to Satoshi on this first alpha release. It will be distributed to network nodes when they make blocks, with the amount cut in half every 4 years (Halving). It’s interesting that the system can be configured to only allow a certain maximum number of coins ever to be generated. I guess the idea is that the amount of work needed to generate a new coin will become more difficult as time goes on.

One immediate problem with any new currency is how to value it. Even ignoring the practical problem that virtually no one will accept it at first, there is still a difficulty in coming up with a reasonable argument in favor of a particular non-zero value for the coin. If we assume that Bitcoin becomes the dominant payment system in use throughout the world, then the total value of the currency should be equal to the total value of all the wealth in the world. Current estimates of total worldwide household wealth that I have found range from $100 trillion to $300 trillion. With 20 million coins, that gives each coin a value of about $10 million.”

In summary, this conversation is fascinating because it serves as the cornerstone of the entire cryptocurrency movement. It embodies the moment when the idea of Bitcoin took its first steps toward reality, and it hints at the profound changes it would bring to the world of finance and technology. It’s a historical record of the birth of a financial revolution, where visionary concepts met practical implementation to challenge the traditional financial order.

For the end, I want to add important information:

One of the most interesting aspects of Bitcoin is that it did not have any outside funding, it was never pre-mined, there was no marketing budget, it has never been hacked, there have been no development scams, and not a single Bitcoin has been stolen from the network throughout its history, all this makes it one of the kind in the current financial world.

Bitcoin represents the future, see you at the TOP!

Gašper Oslakovič

*Thank you for reading, and please remember that nothing in this article is financial advice.*