The ‘Bitcoin Halving’ Coming Soon

What it is & why it’s such a big deal in the crypto universe

Zainab Balogun O.

Published in

Coinmonks

4 min readApr 10, 2024

Since 2008 when Bitcoin came into existence, ‘Bitcoin Halving’ has only ever happened 3 times in every 4-year interval:

First was on November 28, 2012

2nd on July 9, 2016

3rd on May 11, 2020

Now, the 4th event is coming soon; April 20, 2024, and here’s what all the hype is all about:

What’s Bitcoin Halving/Halvening?

Bitcoin halving is an elaborate event in the crypto world that happens every four years or when every 210,000 blocks are mined.

Stay with me.

When Bitcoin (BTC) was created, its anonymous creator, Satoshi Nakamoto, designed it to have a fixed supply limit of 21 million BTCs.

Meaning that the total number of BTCs that exist in the whole world is certain (fixed) & won’t be exceeded past that number.

NB: Although the number is fixed, not all BTCs are in circulation yet.

Satoshi also believed that scarcity is a crucial aspect of Bitcoin’s value proposition.

i.e. the fewer Bitcoins there are in circulation, the higher they are worth.

And so Satoshi incorporated the concept of halving.

When halving occurs, the reward for mining (bringing BTC to life) is slashed by… half

Let’s backtrack a bit ◀◀◀

What even is Mining?

Previously wrote a dedicated piece on Mining for Crypto

In this case, it’s when new BTCs are created and transactions are validated and added to the blockchain network.

The people who do these are called Miners.

Miners use powerful computers to solve complex mathematical puzzles, known as proof-of-work algorithms, in a competition to be the first to find a valid solution.

Once a solution is found, the miner adds a new block of transactions to the blockchain and is rewarded with newly minted Bitcoins.

Mining not only brings new BTCs to life, it’s also an important step in securing the Bitcoin network as a whole.

The Miners who dedicate their time, resources & mental health to these are usually rewarded in Bitcoin (why else would they care?)

This reward started off as 50 BTCs in 2008.
In 2012, the reward became 25 BTCs (the 1st halving)
4 years later in 2016, it became 12.5 (2nd halving)
2020 = 6.25 (3rd halving)
And now when the halving happens later this month (April 20), the reward will be reduced to 3.125 BTCs.

Why do the rewards have to be halved?

Bitcoin halving is a mechanism built into the Bitcoin protocol to regulate the rate at which new bitcoins are introduced into circulation.

By reducing the mining reward by half every four years, Bitcoin’s inflation rate decreases over time, ultimately reaching the fixed supply of 21 million bitcoins.

This scarcity is designed to preserve the purchasing power of Bitcoin and prevent inflation.

Impact of Bitcoin Halving & why it’s such a big deal:

Scarcity and Value

Bitcoin halving highlights the fact that Bitcoin is getting more scarce, making it increasingly valuable over time, assuming demand remains constant or grows.

If more people want it, and it’s not readily available due to the decrease in mining rate, this leads to an increase in its price.

Miner Economics

Halving events can significantly impact the profitability of Bitcoin mining operations.

Miners have to adapt to reduced rewards by improving efficiency and resources or adjusting their strategies.

Market Sentiment

Bitcoin halving events often generate significant attention and speculation in the cryptocurrency universe. This grand attention can be a potential catalyst for price increases due to the reduced supply of new BTCs.

Wrapping it up

Bitcoin halving is a fundamental aspect of the Bitcoin protocol designed to regulate its supply and maintain its scarcity in the crypto universe.

Fun fact

It’s speculated that the last halving will happen in 2140 (phew that’s still quite far).

After that, there will be no new BTCs created & miners will no longer rely on newly issued Bitcoin as a reward but instead will rely on the fees they charge.

On that note:

Thanks for reading :)

PS: I made similar crypto-related articles into a Medium “playlist” called #Web3Wednesdays. If you’d like to go through previous ones, they’re neatly packed for you in a List.

PPS: feel free to clap more than once on this piece, drop a comment, anything.