The bitcoin halving: what changes and what does not
In short
- At a halving the reward for new blocks is cut in half.
- It happens after every 210,000 blocks, roughly every four years.
- So new bitcoin arrives more slowly. It certainly says nothing about the price.
Bitcoin is made by computers that bundle transactions into blocks. Whoever adds a block receives a reward in new bitcoin. That reward is cut in half after every 210,000 blocks. That is the halving. Because a block is added roughly every ten minutes, this comes to about every four years.
The numbers
In April 2024 the reward went from 6.25 to 3.125 bitcoin per block. The next halving is due roughly in 2028. This is written into bitcoin's code and does not change on a whim.
Why does it exist?
Bitcoin has a cap of 21 million coins. By halving the reward again and again, new bitcoin arrives ever more slowly until the cap is reached around the year 2140. It is a fixed rule, not a decision by a company or a person.
What it does and does not mean
- Does: the issuance of new bitcoin goes down. For the companies that make blocks, the reward per block falls, and so does their income per block.
- Does not: a halving is no guarantee that the price rises. In the past too, many people expected a halving, and that expectation was already in the price. What happened afterwards is not proof for the future.
- The halving is also no secret. Anyone can follow the date.
This is an explanation of how bitcoin works. It is not a price forecast and not advice to buy or sell.
