A brief explanation of the Bitcoin halving, and its effects on the bitcoin supply
What is a Bitcoin halving?
The Bitcoin halving refers to an automated event that occurs when Bitcoin’s total mined blocks have reached a certain threshold. That threshold is 210,000 mined blocks.
When this threshold is met, the Block Reward that is received by miners on the network is cut in half, hence the name “Bitcoin Halving.”
A block reward is what’s received by the first miner that successfully completes the computational problem required to validate a single block of transactions on Bitcoin’s network.
Bitcoin’s halving event is also how the blockchain-based cryptocurrency controls its overall supply. The total amount of bitcoins in circulation right now sits at around the 18.6 million mark. Bitcoin’s current protocols have set out a finite supply of 21 million bitcoins.
Currently it takes about 10 minutes for a miner to validate a 1MB block of transactions on the Bitcoin network. As such, new bitcoins are released roughly every 10 minutes. That means Bitcoin miners solve and commit a new block of transactions to the Bitcoin network approximately 144 times per day.
New bitcoins are only minted via the mining process. The block reward is what incentivizes miners on the network to serve in this role as transactions validators.
Bitcoin’s halving events occur roughly every four years.
Bitcoin halving dates
As mentioned, Bitcoin’s blockchain triggers a halving event once a threshold of blocks have been mined and added to the network. The current protocol is set at 210,000 blocks. Once that milestone is hit, the block reward decreases by 50%.
When Bitcoin first launched in 2009, the block reward was 50 BTC. At the time a single bitcoin was worth practically nothing. Bitcoin halving events have occurred three times since Bitcoin’s launch.
Currently 6.25 BTC is issued to a miner for every successful block completed. The most recent halving event occurred on May 11, 2020. This event pushed the reward down from 12.5 BTC to its current level.
The price of BTC on that day was US $8,821.42 per BTC.
The 2012 halving event was the first “halvening” to occur following the launch of the decentralized currency. The halving block was mined by SlushPool by someone using a Radeon HD 5800 miner. The price of Bitcoin at the time was $12.35 per BTC which pushed to $127 just 150 days later.
The 2016 halving occurred on July 9, 2016 when the 420,000th block was mined. On that day, BTC’s price was $650.63 per BTC.
News sources reported a 5% decrease in Bitcoin’s price on the lead-up to the July date. What followed, however, was a significant price rally in the months ahead.
According to Decrypt, the “price recovery went on to become one of the most significant rallies in Bitcoin history, as it gradually climbed to over $1,000 by January 2017, to $2,000 by May, $4,000 by August, and $8,000 by November the same year.”
Track Bitcoin halving events
Almost every halving event bears speculation that it may ruin Bitcoin’s standing or performance by driving miners from the network in search of better profitability.
However, after three Bitcoin halving events, the network has yet to falter and continues to grow in market value.
Savvy traders should look to follow the event closely as the historic market trends in and around this date offer windows for significant value gain or asset management depending on your position in the market. Bitcoin halving charts will offer strong evidence and insight into how to predict the next halving event which will see the block reward drop to 3.125 BTC.
You can check in on OKCoin’s Halving Countdown Clock at any time. The information available is robust, providing the network’s current block height, an expected halving date, history around the previously unprecedented events, and more.