What Is Bitcoin Halving and When Will It Happen Again?

Bitcoin Halving refers to a pivotal event in Bitcoin’s blockchain when the reward for mining is reduced in half. The event occurs every four years, with the aim of reducing the total supply of BTC. Bitcoin is up almost 80% since the beginning of the year and is expected to perform well prior to the halving event. 

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How Does the Bitcoin Network Work?

Before we begin explaining what Bitcoin halving is, we should first look over the basics of the Bitcoin blockchain. The blockchain consists of a network of individual computer systems called nodes. These nodes are collectively responsible for running Bitcoin’s software. They also possess a partial or complete history of BTC transactions on the network. 

Each of these nodes can either accept or reject a transaction on the network. They first conduct a series of checks to ensure the transaction’s validity. This includes making sure that the transaction has the correct validation parameters that do not exceed the required length. 

The network approves each transaction individually after all the transactions in a block have been approved. After this, the transaction is included in the existing blockchain before being broadcast to other nodes. 

The stability and security of the blockchain increase as more computers or nodes are added. As of April 1st, 2023, 17309 nodes were running the BTC code. While it’s true that anyone can participate in the network as long as they have the required storage to download the entire history of transactions, not all of them are miners. 

Bitcoin Halving Explained

Bitcoin halving takes place every 4 years. Alternatively, it occurs every time another batch of 210,000 blocks is added to the blockchain. Bitcoin halving decreases the miner’s rewards by 50% with the aim of reducing the number of new BTC units being released into the market.

At the time of writing, BTC miners receive 6.25 BTC for mining a block. This means that these miners have the right amount of computing power required to solve the cryptographic puzzles needed to secure the network. However, once the next Bitcoin halving event occurs, the reward will be reduced from 6.25 BTC to 3.125 BTC. 

Experts claim that halving helps push the price of BTC up by enhancing its scarcity. The maximum number of BTC to be produced is limited to 21 million. With the halving mechanism, Bitcoin mining rewards will eventually be decreased to $0. 

The next Bitcoin halving event is scheduled to occur in April 2024, which will see the block reward decrease to 3.125 BTC. This will also reduce BTC’s annual inflation to 0.8% from 0.7%. The final halving event will occur in 2140 with the mining of the last fraction of BTC with all 21 million BTC being mined. 

Bitcoin Halving and BTC Price Performance

The last halving, which occurred on May 11^th, 2020, saw BTC’s price surge by 19% to reach $8,568.88 from $7,191.36 in the preceding 12 months. Before this, the halving occurred on July 9th, 2016, which saw BTC rally 142% compared with the prior 11 months, reaching $651.83 from $269.14. 

The first Bitcoin halving occurred on November 28^th, 2012, when Bitcoin increased to $12.35 from $2.55. According to senior CryptoCompare analyst Jamie Sly, investors tend to start accumulating Bitcoin in the run-up to the halving event. The time between the accumulation periods and the halving date generally spans at least 500 days. 

BTC’s price tends to spike even higher in the post-halving months. For instance, it rallied 688.31% after 546 days since the halving of May 11^th, 2020. It then reached a high of $67,549 on November 8, 2021. It also rallied 2,824% to reach an all-time high of $19,065.71 after the halving of 2016. 

BTC suffered a tumultuous 2022, which also saw the collapse of major companies and projects. Interest rates in the United States and other countries increased due to rising inflation, which in turn saw investors drop Bitcoin. While it has recently reached $30,000, BTC is still down by more than half from the highs of November 2021. 

Conclusion

As mentioned before, miners will receive just 3.125 BTC for mining a block after the halving. While it’s impossible to predict with certainty a specific date for the next halving event, experts believe it will take place in April 2024. Even if other factors don’t send BTC surging upwards, the halving is surely expected to make BTC’s fortunes better. 

Frequently Asked Questions

What Will Happen After Bitcoin Halves in 2024?

After the next Bitcoin halving, which will take place around April 18^th, 2024, 840,000 blocks will have been mined. Miners will then receive just 3.125 BTC for mining each block. According to experts, 450 coins will be produced each day provided the daily average number of blocks mined stays the same. 

How Many Bitcoin Halvings Are Left? 

Bitcoin halving is an important part of maintaining the scarcity of BTC tokens. There are 29 Bitcoin halvings left. There are a total of 32 halvings in the lifespan of Bitcoin. Only three halvings have occurred so far – 2012, 2016, and 2020. 

Does Halving Occur in Other Cryptocurrencies?

The halving event occurs in cryptocurrencies that use the proof-of-work system. This includes Verge, Litecoin, Bitcoin SV, Bitcoin Cash, Zcash and Raven Coin. Each of these cryptos has its own halving schedule and block reward amount.