Since its launch in 2009, Bitcoin has attracted the interest of investors, tech enthusiasts, and financial experts worldwide. Bitcoin is a form of digital currency that many see as a revolution in the finance sector as it doesn’t rely on any central authority, such as a government or central bank.
Since then, one of the key events in Bitcoin's ecosystem–the Bitcoin halving–has continued to fascinate enthusiasts and played a crucial role in the cryptocurrency industry. In this article, we will look into the concept of Bitcoin halving, explaining what it is, why it matters, and its impact on the Bitcoin network.
What is Bitcoin, and how does it work?
Before diving into the concept of Bitcoin halving, let’s start with the basics and learn what Bitcoin is and how it works.
Bitcoin is a decentralised digital currency operating on the blockchain, a peer-to-peer online network. It differs from traditional fiat currencies, like US dollars or Euros, as it is not dependent on any third parties or central authority, like a government or central bank. Another key difference is that Bitcoin supply is limited to 21 million Bitcoin, whereas fiat currencies have an unlimited supply.
As mentioned just above, Bitcoin relies on blockchain technology to exist. A blockchain is a decentralised open ledger on which transactions are securely recorded and cannot be altered. To ensure the security and integrity of the Bitcoin blockchain, several miners validate and add transactions to the blockchain. To do so, they use computing power to resolve complex mathematical functions and receive a reward for each transaction successfully verified or mined.
Bitcoin vs fiat: what are the differences?
What is Bitcoin having?
The Bitcoin halving, or “the halving," is a recurring event that takes place after every 210,000 blocks mined on the Bitcoin blockchain–or approximately every four years. The Bitcoin halving event is a fundamental aspect of Bitcoin's monetary policy and has a significant impact on the supply of new Bitcoins entering circulation.
In simple terms, during the halving, the reward that miners receive for validating and adding new transactions to the blockchain is reduced by half. When Bitcoin was first launched in 2009, miners were rewarded with 50 Bitcoins for each block they successfully mined.
The first Bitcoin halving occurred in November 2012, reducing the reward to 25 Bitcoins per block, followed by the second in July 2016 (reducing the reward to 12.5 Bitcoins). Then, the third and last Bitcoin halving took place in May 2020 (reducing the reward to 6.25 Bitcoins).
Bitcoin halving dates
- 1st Bitcoin halving date: November 28, 2012
- 2nd Bitcoin halving date: July 9, 2016
- 3rd Bitcoin halving date: May 11, 2020
- 4th Bitcoin halving date: Expected in April 2024
When is the next Bitcoin halving?
It is expected to happen in April 2024.
As the Bitcoin halving occurs every four years or so, the next halving is expected around April 2024. After the Bitcoin halving in 2024, the mining reward to validate Bitcoin transactions will be cut in half, going from 6.25 BTC to 3.125 BTC per block. This means that after the Bitcoin halving in 2024, miners will be rewarded 3.125 Bitcoins for each verified transaction block.
When will be the final Bitcoin halving?
The final Bitcoin halving will take place in 2140. After the final Bitcoin halving, the total amount of Bitcoin, set at 21 million, will be in circulation. In other words, no more Bitcoin will be created, or mined, after that.
After the final Bitcoin halving, miners will receive fees as a reward for validating transactions on the Bitcoin blockchain.
Will Bitcoin (BTC) go up after halving?
Historically, the Bitcoin price tends to go up after a halving event. Looking at the table below, we can see that the price of BTC was up one year after each halving event. The supply reduction associated with Bitcoin halvings often creates supply-demand imbalances, potentially contributing to those price increases.
It is expected that the same phenomenon could happen for Bitcoin halving in 2024, even though there’s absolutely no certainty in this. Bitcoin price can also be heavily influenced by other external factors. However, there’s a strong sentiment in the crypto community that a crypto bull run–amplified by the halving– might start in 2024. A NASDAQ article predicts that the price of Bitcoin could go up $250,000 post-halving, while the Coincodex algorithm estimates that it could increase to over $88,000 three months after the halving.
The price of Bitcoin has, in fact, already been increasing since the end of 2023, perhaps impacted by the upcoming halving. As Bitcoin continues to captivate the world, one thing remains clear—its allure and potential for both investors and the broader financial landscape.
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* The Annual Interest Rate offered on both USD and Bitcoin deposits is variable and may change at any time. Please see our Interest FAQs for more information. Interest on Bitcoin deposits will only be paid on balances of 5 BTC or less. For more information, visit our Help Centre. Interest on both USD and BTC is currently paid in Satoshis. We may instead choose to pay it in any other supported currency or currencies (fiat and/or crypto) from time to time.
** Capital at risk. This information is not investment advice. Security values can go up as well as down. Past performance is not indicative of future results. Crypto assets are high risk and can lose all their value. To check if U.S. Stocks is available in your country, please visit our Help Centre.
** Capital at risk. This information is not investment advice. Crypto asset values can go up as well as down and you could lose all the money you invest. This is a high‑risk investment and you are not protected if it loses all or some of its value. Past performance is not indicative of future results.
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