BTC halving

BTC halving refers to the halving of the reward that miners receive for confirming transactions on the Bitcoin network. In the Bitcoin protocol, the total supply of bitcoins is capped at 21 million. Approximately every four years, or after every 210,000 blocks mined, the reward that miners receive for validating transactions is reduced by half. This event is known as the “halving” or “halvening.”

Originally, when Bitcoin was created in 2009, miners received a reward of 50 bitcoins for each block they mined. In 2012, the first halving occurred, reducing the reward to 25 bitcoins per block. In 2016, it halved again to 12.5 bitcoins per block. And then in May 2020, the most recent halving took place, reducing the reward to 6.25 bitcoins per block.

The purpose of halving is two-fold: to control the inflation rate of Bitcoin by slowing down the rate at which new bitcoins are created and to ensure that the total supply of bitcoins will eventually reach 21 million, making Bitcoin a deflationary asset over time. This mechanism is a fundamental part of Bitcoin’s monetary policy and plays a significant role in its economic model.

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