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What is the Bitcoin Halving?

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The Bitcoin Halving

With Bitcoin, transactions are grouped into blocks and new blocks are appended to the blockchain every 10 minutes. 

Miners are responsible for creating and validating these blocks and receive a mining reward for their important services securing the network. 

The moment when the mining reward is divided by 2, is commonly called “Bitcoin halving” or simply “the halving”. Miners receive 12.5 bitcoin as a mining reward at the moment and in May next year this is set to drop to 6.25. The exact date for the bitcoin halving is estimated at 14th may 2020. A date to add to your calendar. The reason it is not an exact date is because it occurs after every 210,000 blocks are mined, or confirmed, by miners. Block times are not fixed, but averaged at 10 minutes a block.

For more on the halving we recommend you check out thehalvening.com

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How often is Bitcoin halved?

The amount of bitcoins rewarded for each block is halved every 4 years. When Bitcoin was first created the reward was 50 bitcoins. In November 2012, it dropped to 25 and in July 2016 to 12.5.

What will be the impact on Bitcoin price?

It’s anybody’s guess. Supply and demand affects the price of any asset and the halving directly impacts the supply in a rather radical way. Many speculate that it will trigger another bull run event. However, supply alone will not impact the price and demand will need to remain strong for prices to increase. In reality the halving could already be priced into bitcoin as it is a known event.

What happens when all Bitcoins are mined?

There are only 21 million Bitcoins available for mining. That’s it. Once all of those bitcoins have been mined, no more will be created. It’s estimated around 2140 for when the last bitcoin to be mined when the mining rewards would drop below 1 satoshi (the smallest denomination).

This doesn’t mean the end of Bitcoin. Future generations can continue to stack, HODL and spend sats. Besides block awards,  the Bitcoin protocol also provides transaction fees. As bitcoin rewards go down, the fees will likely increase to incentive the miners. 

If you want to exchange your fiat money for fixed supply Bitcoin then visit one of our Bitcoin ATMS in Ireland.

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Bryan

Bryan

Based in Ireland, Bryan is the founder and CEO of Boinnex. He has worked for almost a decade as an IT Project Manager contracting across finance, banking, insurance, tech, and healthcare industries. He found his way into the crypto space in 2017 when he started a contract role with IOHK — the dev company behind the Cardano blockchain. Since then, he has continued to be actively involved in different projects in the crypto and blockchain space. He enjoys learning, writing, and sharing knowledge about all things crypto.

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