Bitcoin halving is an event that occurs approximately every four years as part of the Bitcoin protocol. It involves a reduction in the reward that miners receive for validating and adding new blocks to the blockchain.
In the Bitcoin network, new bitcoins are created as a reward for miners who successfully solve complex mathematical problems and add a new block to the blockchain. This process is known as mining. The reward acts as an incentive for miners to contribute their computing power to secure the network.
The Bitcoin protocol is designed to limit the total supply of bitcoins to 21 million. To achieve this, the reward for mining is halved approximately every four years, or after every 210,000 blocks are mined. This reduction in the reward is what's referred to as "halving."
The first Bitcoin halving occurred in 2012, reducing the reward from 50 to 25 bitcoins per block. The second halving occurred in 2016, reducing the reward from 25 to 12.5 bitcoins per block. The third halving occurred in May 2020, bringing the reward down to 6.25 bitcoins per block.
Bitcoin halving events are closely watched by the cryptocurrency community because they can have significant effects on the supply and demand dynamics of Bitcoin. The reduction in the rate at which new bitcoins are created can potentially impact the overall market value of Bitcoin, as it may lead to decreased selling pressure from miners.
