What You Need To Know About Bitcoin Halving in 2024

Functioning as a currency and store of value, Bitcoin operates on blockchain technology, and will ever only have a finite supply of 21 Million coins. The underlying foundation driven by that technology it runs on is called a Blockchain — a decentralized digital ledger on which all transactions occuring on the network are recorded in a chain of blocks and maintained in an immutable form. To ensure accuracy of all transactions recorded, Miners play a role of validating transactions and adding them into a newly mined block. They do this by solving highly complex mathematical puzzles, and in return are rewarded with new coins in the network. The number of new coins issued per block as the chain increases in blocks over time, is where Bitcoin Halving comes in.

Bitcoin Halving is an occurrence that was programmed into Bitcoin's protocol since it's inception in 2009 and is still in full operation till date. During this event, the rewards (called Block Reward) that a miner can earn for mining and finding a valid block to be added to the blockchain, is reduced by half and remains so until the next Halving event where that would be reduced by half again (and so forth!); essentially reducing the rate of which new Bitcoins are created by 50% at each halving. The event takes places at every 210,000 mined blocks (or approximately every 4 years). It is a historical and majestic event in the Bitcoin ecosystem, which by design, has a primary objective of regulating the supply of Bitcoin and promote scarcity of the asset, which can potentially lead to bitcoin's market price appreciating over time (assuming it's demand remains constant or increases).

Historical Dates of past Bitcoin Halvings

So far, there have been three (3) halving events after Bitcoin's inception in 2009 when the initial block reward was 50 BTC!

• The 1st halving event occurred on the 28th November, 2012 (UTC) at Block 210,000. The block reward was reduced by half from 50 BTC to 25 BTC.
• The 2nd halving event occurred on the 9th July, 2016 (UTC) at Block 420,000. The block reward was again reduced by half from 25 BTC to 12.5 BTC.
• The 3rd halving event occurred on the 11th May, 2020 (UTC) at Block 630,000. The block reward was reduced by half from 12.5 BTC to 6.25 BTC.

It is estimated that all 21 Million of bitcoin's supply will have been mined by the year 2140! Can you guess the block number at which that final halving will occur in 2140? _{Let's not stress you. The answer is Block Number 6,930,000; and the Block Reward will be 0.00000000 Satoshi! (interestingly, marking a point where block rewards are now zero)}

When is the next Bitcoin Halving?

The upcoming Bitcoin halving is going to be the 4th halving event and is predicted to take place on 20th April, 2024 at block 840,000 (literally less than 24 hours away as at the time of publishing this article). The block reward for mining and finding a valid block on the bitcoin network will decrease to 3.125 BTC post-halving.

You can follow a Live countdown to the Halving on this website.

Bitcoin Halving Rewards per Block. 2009 - 2024

The Significance of Halving in the Bitcoin Ecosystem

Being such a historical event in the Bitcoin ecosystem, it holds strong significance within the enthusiastic crypto community for various reasons.

To begin, Bitcoin is a deflationary asset. The premise is that, as the number of bitcoins being produced reduces, they will become more scarce. If bitcoins become rarer and the demand for them rises (stemming from it's reputation as a store of value), it can serve as a protection against inflation since it's price is likely to increase due to market forces. Unlike fiat currencies that can be endlessly printed, Bitcoin has a supply of 21 million coins. The halving upholds Bitcoin's scarcity and value by regulating its supply. It ensures that new Bitcoins enter the market gradually, preventing inflation.

Bitcoin Halving events create a lot of buzz and excitement in the crypto community for both loyal bitcoiners and other interested participants. The expectation of supply drop and possible price surges draws in investors & crypto enthusiasts alike, ultimately boosting overall market activity.

How does Bitcoin Halving impact miners?

Bitcoin halving closely affects miners and their profitability as the amount of coins a miner can receive for successfully mining a valid block is now reduced by half for the same level (or more) work done of previous. Factoring in the cost of maintaining a mining equipment/rig, and the cost of electricity, this necessitates miners to find better ways to mine bitcoin in order to sustain profitability. Some miners may opt for hardware upgrades to enhance efficiency, while others might explore alternative electricity sources or join mining pools for higher chances of earning block rewards; and undoubtedly still, a handful of miners might cease operations if the costs overshadows profits (especially as the market price of bitcoin is volatile).

The decrease in the block reward also intensifies competition among miners. Thus, with fewer bitcoins issued per block mined, miners must put in more effort, solve more intricate mathematical puzzles in other to earn the block reward.

How does Bitcoin Halving impact you (a simple user)? What should you do?

Long story short, as a simple user (ie. you're not a miner) transacting on the Bitcoin network, nothing needs to be done by you. Your bitcoin in your wallet will not be halved, neither will you need to make any changes to your wallet. The halving event will approach and pass, and it'll be as if nothing has changed for you — which is correct! You can keep on sending and receiving bitcoin to your wallet without fear of loss.

Nevertheless, because of the hype and euphoria centered around this majestic milestone in the Bitcoin network, there are some things you — even as a simple user — should keep in mind: conduct your personal research and be alert against scams looking to trick you; keep price expectations realistic even though past halving events have been linked to price spikes.

Key Takeaways

• Miners earn a amount of new coins for mining a valid block & confirming transactions on the Bitcoin network. Bitcoin Halving is an occurrence programmed into the Bitcoin protocol since inception, that causes the reward (block reward) for mining a valid block to be halved!
• There have been 3 past halving events, and they occur at every 210,000 mined blocks (or approximately every 4 years). The latest/current one is estimated to occur on 20th April, 2024 at Block 840,000. At that point, the block reward will be halved/reduced to 3.125 BTC
• The final/last halving event will occur in the year 2140!
• As a regular/basic user, nothing needs to be done by you. Your coins in your wallet will not be halved, neither will sending or receiving transactions be impacted.

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_{Disclaimer: All opinions, news, research, analyses or other information contained in this article are provided strictly for informational purposes only, and does not constitute investment advice. Cryptocurrency products are currently unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. Faucet Crypto (“the website”), including its staff, is not affiliated with and does not endorse nor sponsor any of the mentioned services within this article. Conduct your own thorough research by contacting financial experts before making any investment decisions.}