Whenever a new Bitcoin block is mined, or added to the blockchain, the miner receives a block reward of several Bitcoins in exchange for their hard work. This increases the amount of Bitcoin in circulation. However, if too many tokens are released at once, the total supply will be exhausted quickly.
To solve this, the Bitcoin network cuts the block reward in half after every 210,000 blocks mined, or approximately every four years. This continues until the total supply of 21 million Bitcoins are mined, which is not expected to happen until 2140. For now, miners will be rewarded transaction fees to incentivize them to continue validating transactions and keep the system going.
These are the results of the past halving events:
With fewer coins regularly added to its circulating supply, Bitcoin mitigates inflation and preserves its value. Halving has also been beneficial to investors since after every halving event, the price of Bitcoin tends to increase.
For more info, check out our module on Bitcoin supply and halving.
Halving events are necessary for the Bitcoin ecosystem to remain sustainable. Stay tuned for the next halving event, Ka-Bit!
