Less is more as the old saying goes. And this old saying can be applied to Bitcoin and its supply. 

The Bitcoin Halving marks a special day on the blockchain timeline. It happens every few years and see’s the reward rate decreased after 210,000 blocks are mined on the Bitcoin network.

Let’s look deeper into it and what it means as we approach this monumental occasion. 

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What is the Bitcoin Halving? 

Bitcoin’s halving occurs every four years and leaves investors on the edge of their seats as they patiently await the big day.

Once the block production reaches 210,000 reward rates for Bitcoin are halved. This has been a thing since the inception of Bitcoin in 2008 meaning there has been 3 halvings up until this point.

Having the halving process in place allows the price of Bitcoin to increase generally over time. Satoshi Nakamoto, the creator of Bitcoin, carefully implemented this mechanic into the makeup of Bitcoin to allow this.

The overall supply of Bitcoin is 21 million in total and with the current circulating supply sits at around 19 million at the time of writing. There is 93% of the maximum supply available and the supply cannot increase after all tokens have been mined.

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Looking At Previous Halvings

As we mentioned above, Bitcoin has had 3 previous halving events.

While they generally fall every 4 years, the time can actually take less than that depending on the speed of blocks being produced. 

Here are the previous halving stats:

• November 28th, 2012 = 25 Bitcoins 
• July 9th, 2016 = 12.5 Bitcoins
• May 11th, 2020 = 6.25 Bitcoins

What Does It Mean For Bitcoin?

You’re probably now thinking, what does this mean for Bitcoin? 

Well like any important event that historically happens there is going to be some significant changes, along with speculation. Speculation can be drawn on the value of Bitcoin. While no one can predict the price, it can be seen that full years after the last halvings we have seen price increases.

The first halving in 2012 saw Bitcoin's price go over $200 from around $12 within a year. 2016 had a similar scenario where the price went from $650 to $19,700 within a year's time. 

Retail investors like you and I will also be faced with a lot of media coverage from online publications. This can increase incentive and push buying power. 

Match this with the increased popularity of Bitcoin ETFs from the likes of BlackRock and Fidelity, users may carry on flocking to Bitcoin thanks to the accessibility now granted through these funds. 

Of course the mining rate of rewards decreases which in turn causes miners to rethink strategies associated with mining, and of course the energy consumption. Bitcoin mining in general has become a lot harder since the early days due to these halvings and with block reward rates decreasing to 3.12 we may see a scarcity of it on the blockchain. 

But who knows, the coming weeks will be important for all as we witness the fourth Bitcoin Halving. 

Get strapped in and ready for the ride by following us on socials and checking out the Cryptology Academy today for all your crypto and blockchain needs!

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