halving
The halving is a scheduled event that cuts the bitcoin reward miners receive per block in half, approximately every four years. It is the mechanism that enforces Bitcoin's fixed supply of 21 million coins.
The halving is one of the most important events in Bitcoin's economic design. Embedded directly in the protocol, it reduces the number of new bitcoin created with each block by 50 percent after every 210,000 blocks, which takes approximately four years at the average rate of one block every ten minutes. Bitcoin launched in 2009 with a block reward of 50 BTC. After the first halving in 2012 it dropped to 25 BTC, then 12.5 BTC in 2016, 6.25 BTC in 2020, and 3.125 BTC after the fourth halving in April 2024. This schedule continues until the subsidy reaches zero, which will happen around the year 2140.
The halving is the mechanism that creates Bitcoin's predictable, diminishing issuance. Unlike central banks, which can expand the money supply at will, Bitcoin's issuance schedule is fixed in code and visible to anyone. No authority can override it. The total supply of bitcoin that will ever exist is capped at approximately 21 million, and the halving is what enforces that cap by gradually reducing the rate at which new coins enter circulation until it reaches zero.
For miners, each halving cuts their block subsidy income in half overnight. If the bitcoin price does not rise enough to compensate, some miners may shut down unprofitable operations, temporarily reducing the network's hash rate. The protocol adjusts the mining difficulty approximately every two weeks to compensate for changes in hash rate, maintaining the target of one block every ten minutes. Historically, halvings have preceded periods of significant price appreciation, though past patterns are not a reliable guide to future outcomes.