Unlike dollars or euros, Bitcoin doesn’t come from a central bank. It is built on a code that enforces one central principle: scarcity. The maximum supply of Bitcoin is 21 million, which gives it its “digital gold” status. And this isn’t all. Bitcoin becomes harder to earn over time.
Bitcoin halving directly slows down how fast new Bitcoins enter circulation. Let’s take a closer look at Bitcoin halving, what it is, how it works, and why it is important for the cryptocurrency world.
What is Bitcoin Halving?
Before we dive into what Bitcoin halving is, let’s revise what is Bitcoin. It is the world’s first cryptocurrency, developed by Satoshi Nakamoto in mid-2008 and early 2009. Unlike fiat currencies, which can be printed at the discretion of the government or central bank, Bitcoin operates on a decentralised blockchain network.
When miners add a new block of transactions to the blockchain, they’re rewarded with a Bitcoin block. The aim is to incentivize miners so they can keep maintaining the network’s security. Bitcoin halving is a pre-programmed event built into the Bitcoin protocol that reduces the block reward by half. It occurs roughly every four years or every 210,000 blocks.
Since the maximum supply of Bitcoin is 20 million, the process of halving is expected to continue until 2140.
Why is Bitcoin Halving Important?
Bitcoin halving is one of the main drivers behind Bitcoin’s ecosystem and market value. Let’s take a closer look at why Bitcoin halving is important:
Controls Inflation
As mentioned earlier, fiat currencies can be printed in unlimited quantities at the discretion of the government or central banks. This leads to inflation and large-scale market changes. This is not the case with Bitcoin. Halvings ensure there is a finite and dwindling supply of Bitcoins. This gives Bitcoin a potential hedge against inflation, which is not possible when you’re trading using fiat currencies.
Price Appreciation
Since Bitcoin is scarce, its demand is gradually increasing. This is especially prominent after a halving event. While past performance does not guarantee future results, halvings tend to generate optimism among investors.
Advanced Mining Operations
Halvings directly impact miners’ profitability. The block reward might be decreasing in value, but it encourages innovation and efficiency in the mining operations. This is essential for long-term security of the Bitcoin ecosystem.
Bitcoin Halving Events
As of 2025, there have been four Bitcoin halving events. The first halving event took place on November 28, 2012, and the block reward went from 50 BTC to 25 BTC. Fast forward to the next halving event on July 9, 2016, with the block reward going down to 12.5 BTC.
On May 11, 2020, the third halving event took place, once again making waves in the cryptocurrency world. On April 19, 2024, the fourth and latest halving event took place. The current mining reward has now come down to 3.125 BTC.
Each halving marks a milestone. It reinforces Bitcoin’s scarcity and reminds the world that this digital currency operates on a fixed, transparent monetary schedule.
