What is Bitcoin halving?
Halving (halving, halving) is the moment when the reward to miners in the Bitcoin network is halved. This happens every 210,000 blocks and is a key feature of BTC as part of ensuring the necessary shortage of coins, provided that the maximum emission of 21 million BTC is included in the protocol.
To date, more than 18 million coins have been mined in 11 years of cryptocurrency existence, and it would seem that those small balances of 3 million BTC are about to exhaust themselves. However, it is halving that it will provide miners with work for another 120 years.
How will this happen?
A total of 64 halving is planned, two are already behind (in November 2012 - then the reward decreased from 50 BTC to 25 BTC, and in June 2016 - a decrease from 25 BTC to the current 12.5 BTC), one is about to take place in May of this years and reduce the reward to miners from 12.5 to 6.25 BTC.
And each time the number of coins mined for a certain time period will decrease. Those. if at the current remuneration of 12.5 BTC over the past 4 years (210,000 blocks) 2,625 million BTC was mined, then after the upcoming halving over the next four years with a reward of 6.25 million BTC for each block, a total of 1 will be mined, 3,125 million coins.
Those. after each of the upcoming 62 halvings, the number of bitcoins generated over a 4-year period is decreasing, and the production time of the planned maximum is increasing. That is why until today, so much has been mined in a decade, and in the future, so little will be mined in a century.
Halving will continue every 210,000 blocks until the reward reaches 1 Satoshi, the smallest unit of measure equal to 0.00000001 BTC. After that, miners will only earn on transaction fees.
Why is halving important?
It creates a predictable deficit!
One of the key features of Bitcoin is that it is strictly limited by the maximum emission of 21 million coins (more precisely, 20,999,999.9796 BTC). There will never be 21,000,000,000,000,000 BTC without a consensus change to the protocol. The mechanism by which such conditions are ensured is halving, which is crucial for the predictable shortage and prosperity of cryptocurrency.