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The last Bitcoin halving took place on May 11, 2020, and the next bitcoin halving will likely occur in 2024.

“The halving” sounds like a horror movie about an ax murderer. But it’s actually the nickname for one of the most hotly anticipated events in Bitcoin’s history.

What is Bitcoin halving, how does it affect the price, and what does it mean for miners and the cryptocurrency’s long-term prospects?

Here’s everything you need to know.

What is Bitcoin Halving

New bitcoins enter circulation as block rewards, produced by “miners” who use expensive electronic equipment to earn or “mine” them.

Every 210,000 blocks, or roughly every four years, the total number of bitcoin that miners can potentially win is halved. 

next bitcoin halving
image source coindesk

In 2009, the system started at 50 coins mined every 10 minutes. Two halvings later, 12.5 bitcoins are currently being dispensed every 10 minutes. 

This process will end with a total of 21 million coins, probably in the year 2140. 

What is a block halving?

In the cryptocurrency space, the term halving refers to a process that reduces the issuance rate of new coins. More precisely, halving is the periodical reduction of the block subsidy provided to miners.

The halving ensures that a crypto asset will follow a steady issuance rate until its maximum supply is eventually reached.

A block halving is a process of reducing the rate at which new cryptocurrency units are generated. Specifically, it refers to the periodical halving events that decrease the block rewards provided to miners.

When it comes to Bitcoin, news coins are being generated continuously as part of the block reward (which is made up of the block subsidy plus transaction fees).

So every time a miner successfully “discovers” and validates a new block, they earn newly created coins as compensation for their work. 

So the mining process is what introduces new Bitcoins into the system, and this is done at a predictable and controlled pace. New Bitcoin blocks are mined, on average, every 10 minutes, and the block subsidy follows a controlled decaying rate.

Accordingly, the halving is what ensures that the block subsidy will decrease by 50% every 210,000 blocks (roughly every four years).

Starting at the genesis block, Bitcoin’s block subsidy was initially set as 50 BTC. Then, it was reduced to 25 BTC in 2012, and to 12.5 BTC in 2016. The following halving is expected to happen around May 2020, reducing the block subsidy to 6.25 BTC.

Once 32 halvings have occurred, the process stops, and no more Bitcoins will be created. At this point, the maximum supply of 21 million BTC will be reached.

When is the Next Bitcoin Halving

Next Bitcoin Halving Countdown as from today – 1/23/2021

Days Left1232
Current block height667,310
Block until halving172,690
Bitcoin price31,837.26

How is our timer calculated?

You may notice our countdown has a different estimation than other bitcoin halving countdowns and ask “Why?”

We believe this makes our countdown more accurate because instead of using the commonly quoted average block time (10 minutes), we are using live blockchain statistics and obtaining an estimation of the current average block time, then conducting our calculation based on that. Our timer may fluctuate, however, we believe it is the most accurate block halving clock.

The Bitcoin Halvening countdown is an extract from Binance Academy, and it is calculated using the following formula:

(Halving block – Next block height) * Average time between blocks – estimated time until the next block.

CAmount GetBlockSubsidy(int nHeight, const Consensus::Params& consensusParams)
{
  int halvings = nHeight / consensusParams.nSubsidyHalvingInterval;
  // Force block reward to zero when right shift is undefined.
  if (halvings >= 64)
    return 0;

  CAmount nSubsidy = 50 * COIN;
  // Subsidy is cut in half every 210,000 blocks which will occur approximately every 4 years.
  nSubsidy >>= halvings;
  return nSubsidy;
}

Why are Halvings Significant?

Halvings are at the core of the cryptocurrency economic models because they ensure coins will be issued at a steady pace, following a predictable decaying rate. Such a controlled rate of monetary inflation is one of the main differences between cryptocurrencies and traditional fiat currencies, which essentially have an infinite supply.

How many Bitcoin halvings have there been previously?

As of July 2019, there have only been two previous Bitcoin halving events. These occurred on the 28th of November, 2012 and the 9th of July, 2016. At the time of the first halving event, the price of Bitcoin was $12.31 and at the time of the second halving event, the price of Bitcoin was $650.63.

There will only ever be 32 bitcoin halving events. Once all of these have occurred, there will be no more halvings and there will also be no more Bitcoin created as the maximum supply will have been reached.

HalvingEst. DateBlock HeightBlock Reward (BTC)
0N/A050
111/28/2012210,00025
207/09/2016420,00012.5
32020630,0006.25
42024840,0003.125
520281,050,0001.5625

Detailed datasheet

Total BTC in circulation18,608,169
‘BTC to ever be produced21,000,000
Percentage of BTC mined88.61%
BTC market cap (USD)590,963,991,695
BTC generated each day917
Approximate block time10.26 Minutes

How does the Bitcoin block halving work?

The Bitcoin Halving is an essential function of the Bitcoin protocol. Next bitcoin halving happens around once every four years and is of much interest to cryptocurrency investors due to the profound effect halving has had on the cryptocurrency in previous occurrences.

Halving refers to the number of coins that miners receive for adding new transactions to the blockchain being cut in half.

This will now diminish from 12.5 bitcoin to 6.25 and will halve again every 210,000 blocks until the last bitcoin is mined in 2140.

Previous halvings have been followed by bull runs that saw the meteoric increases in bitcoin’s value, most notably in 2017, following the reward decreasing from 25 coins to 12.5 in 2016.

Final Verdict

The halving is an important part of the Bitcoin protocol and, since the code is open-source, anyone is able to see it. For instance, Bitcoin Core implementation is available on GitHub, and one of the code sections that define the block subsidy looks like this:

CAmount GetBlockSubsidy(int nHeight, const Consensus::Params& consensusParams)
{
int halvings = nHeight / consensusParams.nSubsidyHalvingInterval;
// Force block reward to zero when right shift is undefined.
if (halvings >= 64)
return 0;

CAmount nSubsidy = 50 * COIN;
// Subsidy is cut in half every 210,000 blocks which will occur approximately every 4 years.
nSubsidy >>= halvings;
return nSubsidy;
}

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