Fundamentals of the crypto industry: What is Halving? How does it affect cryptocurrency prices?
The halving event, which occurs periodically in some cryptocurrency networks, especially Bitcoin, is one of the most important events in the functioning of the Blockchain network. This event, which directly affects people and institutions carrying out IT activities, called cryptocurrency miners, is also closely followed by crypto investors.
Halving means the halving of the mining reward in Blockchain networks operating on the proof-of-work consensus mechanism. This event, which roughly reduces the supply of crypto money, increases the upward trend of the price due to the increase in demand.
Bitcoin is the first Blockchain network to implement halving as the first cryptocurrency. When Bitcoin was released in 2009 by its still-mysterious developer, Satoshi Nakamoto, the mining reward was 50 BTC. With the reward halving, which takes place every 4 years, the block reward was reduced to 25 BTC in 2012, 12.5 BTC in 2016, and 6.25 BTC in 2020. While miners currently earn 6.25 BTC for each block they mine, this amount will decrease to 3,125 BTC with the 4th reward halving that will take place on the Bitcoin network in 2024.
