The importance of Bitcoin's fourth halving

1. The importance of "halving"

Each halving event is a critical moment in Bitcoin's life cycle because it directly affects Bitcoin's issuance and inflation rate, reduces block rewards (newly issued Bitcoins that incentivize miners to produce blocks and maintain network security), and may have an impact on BTC's market value due to greater scarcity.

As its name implies, "halving" refers to the reduction of Bitcoin issuance by half, effectively halving Bitcoin's inflation rate (the rate at which new Bitcoins enter the market). With this halving, Bitcoin issuance will drop from 900 Bitcoins per day (1.8% issuance rate) to 450 Bitcoins per day (0.9% issuance rate). Therefore, the rewards miners receive for validating new blocks and protecting network security (excluding fees) will also be reduced by half, which will affect their incentive level and profitability. Halving is set to occur every 210,000 blocks, or about every 4 years, and is immutable - the rules governing this process are written into the underlying code of the Bitcoin network.

Since its creation in 2009, the network has undergone three halving events, each of which cut miners’ block rewards in half. The first halving in November 2012 reduced the reward from 50 BTC to 25 BTC, followed by the second halving in July 2016, which reduced the reward from 25 BTC to 12.5 BTC, and the most recent halving event occurred in May 2020, which reduced the reward from 12.5 BTC to 6.25 BTC. The upcoming halving is expected to take place on April 20 (block height 840,000) and will further cut the block reward to 3.125 BTC.

However, Bitcoin continues to develop on this schedule, and as the issuance rate decreases and 19.7 million of the 21 million supply cap has been mined, each new halving will have a smaller and smaller impact on the overall supply. Therefore, as Bitcoin approaches the upper limit of its limited supply, the importance of future halvings will gradually decrease. $BTC #比特币减半 #大盘走势 $ETH