Whether you are interested in cryptocurrency mining or blockchain technology, or even if you participate in the crypto world solely as an investor, Bitcoin halving is a valuable concept to understand. What exactly is being divided in half? When does the Bitcoin halving process occur, and why? Contrary to what the term may suggest, halving does not involve dividing anyone’s share of Bitcoin in half, nor does it mean a direct alteration of the price of BTC. Instead, halving is a concept that relates to the speed at which new Bitcoins are mined or introduced into circulation, which has the potential to impact virtually all other aspects of the world’s leading cryptocurrency. Read on for a broad introduction to the concept of Bitcoin halving.
Overview for Fast Readers
- New Bitcoins are added to global circulation as rewards for Bitcoin miners who verify transactions and add blocks to the Bitcoin blockchain.
- “Halving” refers to the periodic halving of the BTC reward paid out to miners.
- Halvings take place roughly every 4 years, or every 210,000 blocks added to the blockchain.
- At launch, the block reward was set at 50 BTC; there have since been three halvings, so the current reward is 6.25 BTC.
- Halvings will continue to happen about every 4 years until the last Bitcoins are mined in roughly the year 2140.
- The impact of halvings on the price of Bitcoin is unclear: while the price of BTC has dropped in the time surrounding halvings in the past, they appear to have not inhibited price growth over time.
Bitcoin Halving: When, Why, and What Effect Does It Have?
In order to understand Bitcoin halving, it’s crucial to know a bit about how the Bitcoin network functions. The Bitcoin ecosystem is built on blockchain technology. Thebitcamp provides an in-depth explanation of blockchain and how it relates to cryptocurrencies elsewhere, but for the purposes of understanding halving it is essential to keep in mind these things:
- Blockchain technology (and the Bitcoin network) rely on a massive collection of individual computers (nodes) which independently store Bitcoin’s transaction history.
- New transactions are verified and added to the blockchain ledger in groups called blocks.
- This verification is done by computers in the Bitcoin network in a process known as mining.
- Bitcoin miners dedicate computing power and energy to the verification process in order to support the overall Bitcoin ecosystem; they have the chance to be rewarded for their efforts with newly “minted” BTC.
The rate at which blocks are added to the Bitcoin blockchain is typically around every 10 minutes, although this depends on an adjustable mining difficulty level. This means that about every 10 minutes, miners are rewarded for their efforts and some new quantity of BTC is introduced into circulation. After 210,000 blocks have been added to the blockchain—or about every 4 years on average—the BTC reward (which is also the quantity of BTC introduced into circulation) is halved. This means that miners are suddenly eligible to receive only half of the reward that was previously available, and the rate at which Bitcoin is introduced into the global supply slows.

What Does Bitcoin Halving Mean?
As described above, Bitcoin halving has to do with the reward paid out to miners, which also represents the new BTC issued into circulation. But what is the reasoning behind the periodic decreasing of this reward?
Why Do Halvings Happen?
Bitcoin halvings can be traced back to Satoshi Nakamoto, the mysterious, pseudonymous creator of Bitcoin. Nakamoto theorized in writings around the time of the launch of Bitcoin in 2009 that the monetary policy governing Bitcoin—the process by which the supply of BTC in circulation would be controlled—could have a significant impact on considerations like inflation, deflation, and distribution. Send too many or too few Bitcoins into circulation and the balance would be skewed.
In the case of fiat currencies, an authority like a central bank has several tools to control the supply of currency in circulation. As a decentralized, anonymous network which is governed by fixed protocols, Bitcoin’s policy is necessarily more rigid. Thus, Bitcoin was designed to have a maximum supply of 21 million tokens. Beyond that, Nakamoto determined that new BTC would be issued at a constant rate for every 4-year period, and that this rate would decrease via halvings over time in order to control for issues of inflation and other concerns. The initial reward was 50 BTC, and that will be reduced every 4 years until the final Bitcoins are mined in approximately the year 2140.
What is the Impact of a Halving on Investors?
Since Bitcoin launched in 2009, there have only been three halvings. As such, there is a small sample of instances of halving to use as evidence of the phenomenon’s impact on investors. Generally, though, investor fears about the impact of a halving on the price of Bitcoin have been greater than the impact itself. The price of Bitcoin has occasionally dipped in the time immediately surrounding the halving, perhaps because of investor concern about miner interest dropping as the rewards are diminished. However, the price of Bitcoin appears to tend to rise after halvings, suggesting that the long-term impact of these events is minimal. Over time, however, as the supply of available Bitcoins decreases, consistent demand may actually lead to halvings pushing the price of the crypto higher.
Bitcoin Halvings of the Past
There have been three prior Bitcoin halvings as of this writing:
- First halving: November 28, 2012 (from a block reward of 50 BTC to 25 BTC)
- Second halving: July 9, 2016 (from a block reward of 25 BTC to 12.5 BTC)
- Third halving: May 11, 2020 (from a block reward of 12.5 BTC to 6.25 BTC)
When is the Next Bitcoin Halving?
Although it is not possible to predict exactly when the next Bitcoin halving will take place, it is likely to happen in the year 2024. It will occur at a block height of 840,000, or when the 840,000th block is added to the blockchain. At that time, the block reward will decrease from 6.25 BTC to 3.125 BTC.
What to Expect
By 2024, Bitcoin will have been in existence for about 15 years. However, there will only have been three prior halvings. For that reason, it’s still difficult to predict exactly what will happen at the time of the halving. It is possible that as halvings become more predicted by the crypto community, their impact will diminish. If Bitcoin’s price continues to surge in the time leading up to the halving, however, the stakes may be higher and the impact greater.
Summary
Bitcoin halving refers to the periodic decrease in the BTC reward paid out to Bitcoin miners for verifying blocks of transactions. At the time the Bitcoin network was launched, the reward was set at 50 BTC paid at roughly every 10 minutes. Halvings occur every four years: there have been three halvings up to this point, meaning the current block reward is 6.25 BTC. The next halving is expected to take place in 2024.
Bitcoin halvings are written into the Bitcoin protocol as a means of controlling the supply of BTC in circulation. Only 21 million Bitcoins in total will ever be generated. Halving creates scarcity in the influx of new Bitcoin into the system as a means of potentially hedging against inflation. Though investors have been cautious surrounding halvings in the past, they appear to have not inhibited Bitcoin’s overall price increase since the network was launched.