As ominous as the event may sound, the Bitcoin halving is actually just the name for a history-making event for the bitcoin (BTC) cryptocurrency.
This month signified the third Bitcoin halving ever! Meaning that the number of bitcoins entering circulation every 10 minutes dropped from 12.5 to 6.25, making it a major milestone.
What’s the theory behind the Bitcoin halving?
The idea is basically that reducing the number of BTC in circulation will ultimately increase its overall demand.
New bitcoins are introduced as rewards for miners, who earn them by successfully closing new blocks on the blockchain. So, each time 210,000 blocks are mined (which is approximately every four years) the number of bitcoins miners are rewarded with is halved.
Bitcoin started in 2009, with 50 coins mined every 10 minutes…
- 1st halving – Nov 2012 – 25 coins mined
- 2nd halving – Jul 2016 – 12.5 coins mined
- 3rd halving – May 2020 – 6.25 coins mined
…and so on. This process is due to continue until the year 2140, to a total of 21 million bitcoins in circulation.
But why every 4 years?
You may be better asking bitcoin’s creator Satoshi Nakamoto (if you can find he/she/them!). The identity of bitcoin’s developer is still unknown to this day and unfortunately so is the explanation behind this schedule.
However, it’s proposed that the timely release of bitcoins was designed to increase its demand, and ultimately value, over time. This differs from fiat currencies, where money can be printed at the discretion of the government or central bank, which could lead to inflation. It’s bitcoin’s scarcity that has made it more sort after over the years, making the halving event one of excitement for the crypto community.
Remember, you can store your bitcoins securely in the PumaPay Mobile Wallet app along with many of your favorite coins and tokens!