📌 What is Halving?
Halving is a periodic event in cryptocurrencies like Bitcoin, where the mining reward is cut in half.
It aims to control the rate of new coin issuance, making the currency scarcer and limiting inflation.
🛠️ How does it work?
In Bitcoin, halving occurs every 210,000 blocks (approximately every 4 years), according to the design of Satoshi Nakamoto's protocol.
For example, in May 2020, the reward decreased from 12.5 to 6.25 Bitcoin per block, and in 2024 it decreased to 3.125 Bitcoin.
🧷 Why is it important?
1️⃣ Decreasing supply:
As the issuance of new coins decreases, demand increases relatively, which may raise the price.
2️⃣ Impact on miners:
The reduction in reward decreases miners' profits, which may drive some to stop, but this often enhances the network's efficiency.
3️⃣ Digital scarcity:
Since the maximum supply of Bitcoin is 21 million coins, halving extends the time required for mining and makes it scarcer.
4️⃣ Market effects:
Historically, Bitcoin prices have seen significant increases months after halving events (like in 2012, 2016, 2020), but this is not guaranteed due to other market factors.
