Next Bitcoin Halving
Every four years or after mining of every 210,000 blocks, the Bitcoin network has a feature known as the “HALVING.”
Bitcoin halving is already pre-programmed in the bitcoin software. During a halving, the reward for mining a new block of Bitcoin is cut in half i.e., for example if the existing reward is 6.25, after halving, the reward will be halved to 3.125.
As of 2023, Bitcoin miners/participants who successfully validate the transactions are rewarded 6.25 BTC for each mined block.
The next halving is estimated to take place on 23rd April, 2024 13:24:26 Bhutan Standard Time and the block reward will be reduced to 3.125 BTC. However, the date is based on the current estimates.
The significance of the Bitcoin Halving?
The halving is a key feature of Bitcoin policy, implemented to control the inflation rate, ensuring the scarcity of the cryptocurrency, and increasing its value over the time. This is similar to gold which is deflationary in nature. With the halving event, the number of new Bitcoins produced per block is reduced to half, resulting in a lower supply. Economics say that with the scarcity of the product, the demand increases leading to the increase of supply – similarly, with the reduction in supply, the price of the BTC is likely to increase over time.
Bitcoin halving will ultimately cap the total supply of Bitcoin at 21 million coins. Each Bitcoin has 100,000,000 satoshis in it. This fixed supply of BTC is one of the fundamental characteristics differentiating bitcoin from traditional fiat currencies, which face inflationary pressures due to central bank policies. Thus, given the scarcity-driven nature of the Bitcoin supply (due to the halving events), the impact of the bitcoin price will be interesting to be noted in the future.
Bitcoin Halving Dates History
· 1st Halving – November 28, 2012 – 50 BTC to 25 BTC
o Block Number – 210,000
o Block Reward – 25 BTC
o BTC per day – 3600 BTC
o BTC price before the halving - $12.35
o Bitcoin price 1 year later - $964
· 2nd Halving – July 9, 2016 – 25 BTC t0 12.5 BTC
o Block Number – 420,000
o Block Reward – 12.5 BTC
o BTC per day – 1800 BTC
o BTC price before the halving - $663
o BTC price a year later - $2500
· 3rd Halving – May 11, 2020 – 12.5 BTC to 6.25 BTC
o Block Number – 630,000
o Block Reward – 6.25 BTC
o BTC per day – 900 BTC
o BTC price before the halving - $8,500
o BTC price after – peaked to $67,000
· 4th Halving – April 22, 2024 (UTC) – 6.25 BTC t0 3.125 BTC
o Expected Date – 23rd April, 2024 13:24:36 BST
o Block Reward – 3.125 BTC
o BTC per day – 450 BTC
o New Total Supply of BTC – 656,250
You will observe that during each halving, the miners receive 50% less BTC.
Now when will 21 million BTC be mined?
Given the past trend, Bitcoin halving will happen again in 2028, 2032, and so on. And by 2140, 100% of the BTC is supposed to be completely mined. However, going through my analysis https://immtalimm.blogspot.com/2023/07/what-happens-when-all-21-million-btc-is.html, all 21,000 million cannot be theoretically mined. Even by 2140, we are still left with 0.00000000582076609134674 BTC in the network.
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