INTRODUCTION

WHAT IS BITCOIN HALVING

ADVANTAGES ON THE BITCOIN ECOSYSTEM

TLDR

INTRODUCTION

Bitcoin halving is a really important and significant event in the cryptocurrency world.

A Bitcoin Halving happens approximately every four years. It's a built-in mechanism designed to control the supply of new bitcoins entering circulation.

Bitcoin was the first digital cryptocurrency created in the world, with a decentralized system and a limited token issuance to 21 million Bitcoins.

WHAT IS BITCOIN HALVING?

Bitcoin is generated by miners, they use their high end computers to perform or solve mathematical puzzles, perform complex calculations to validate transactions on what is known as the blockchain, which is a public digital ledger.

In other words, various miners need to validate transactions for them to be completed, ensuring the system's decentralization. They are compensated in Bitcoin.

Halving is simply the planned process of reduction by half of this compensation.

Halvings occur after mining 210,000 blocks of transactions, which is about four years on average.

For the year 2024, a new halving is scheduled, which will reduce mining rewards from 6.25 BTC to 3.125.

THE HISTORICAL HALVING REWARDS BREAKDOWN

In 2009, when Bitcoin was created, miners received 50 BTC per block mined.

In 2012, with the first halving, it was reduced by half to 25 BTC per block mined.

In 2016, it was halved again to 12.5 BTC per block.

In 2020, it was 6.25.

And this year, it will be halved to 3.125 per block mined.

ADVANTAGES ON THE BITCOIN ECOSYSTEM

-The Circulating supply of bitcoin is reduced. Fewer bitcoins are mined, thereby creating scarcity.

-Demand Increases: As the supply of bitcoin being mined reduces, the demand tends to increase, i.e.,. Less supply, more demand!

-Prices Increase: As more supply is limited it drives the price of Bitcoin higher.

And as it was in the news recently, Bitcoin was endorsed by the SEC with the approval of ETFs last week. Now, it's possible to get exposure to Bitcoin on the American stock exchange, the largest in the world.

Which is overall bullishness, and the halving might kickstart the bull season following the past cycles.

TLDR

BItcoin Halving is a periodic event, occurring approximately every four years, where the reward for Bitcoin miners is halved.

This process helps control the coin's supply, gradually reducing new issuance until a maximum limit is reached, promoting scarcity and hereby leads to high demand as the value rises over time.