The Bitcoin network completes the fourth-ever ‘halving’ of rewards to miners (2024)

FAQs

The Bitcoin network completes the fourth-ever ‘halving’ of rewards to miners? ›

The Bitcoin network on Friday evening completed its fourth "halving," reducing the rewards earned by miners to 3.125 bitcoins from 6.25. The price of bitcoin has been volatile ahead of the event, and fell about 4% this week to trade around $64,100, according to Coin Metrics.

This reward is reduced by half every four years, hence the term halving. It's akin to a predictable, scheduled pay cut for these miners. Halving not only adjusts miners' rewards. It also reduces the rate at which new coins are created, decreasing the new supply and influencing the market value.

The reward for mining is 3.125 bitcoins. It takes the network about 10 minutes to mine one block, so it takes about 10 minutes to mine 3.125 bitcoins.

Bitcoin "halving," a preprogrammed event that occurs roughly every four years, impacts the production of bitcoin. Miners use farms of noisy, specialized computers to solve convoluted math puzzles; and when they complete one, they get a fixed number of bitcoins as a reward.

As you can see Bitcoin halves roughly every four years and the most recent Bitcoin halving (the fourth halving) took place on April 19, 2024, where the rewards halved from 6.25 BTC to 3.125 BTC.

Contrary to popular belief, this halving will likely not cause a major decrease in the network's hashrate. After Bitcoin's first three halvings, the hashrate plummeted by 25%, 11%, and 25%, and it appears many analysts and miners are expecting (or hoping for?) a similar hashrate reduction this time.

The much-anticipated bitcoin halving event has come and gone, quietly marking a historic moment in the world of digital assets. On April 19, 2024, the block reward for bitcoin miners was reduced by half, from 6.25 BTC per mined block to 3.125 BTC per mined block.

As of March 2023, the top 1% of Bitcoin addresses hold over 90% of the total Bitcoin supply, according to Bitinfocharts.

Does Bitcoin Mining Actually Pay? Bitcoin mining can be profitable if you contribute enough hashing power to a mining pool to receive larger rewards. If you're solo mining at home on your computer, you may never receive rewards.

After all 21 million bitcoin are mined, which is estimated to occur around the year 2140, the network will no longer produce new bitcoin. The block subsidy will go to zero but miners will continue to receive transaction fees, which will make up an ever greater portion of the block reward.

Does bitcoin always go up after halving? ›

The historical correlation between halving events and the bitcoin price exists, with the price of bitcoin substantially increasing approximately six months after the halving days from 2012, 2017, and 2020.

"While many participants are focused on the historical impact that halvings have had on the BTC price, few are talking about how long this typically takes to come to fruition. Each halving has resulted in peak prices (prior to a big correction) between 10 and 16 months from the actual event.

The bitcoin (BTC) price is likely to weaken after the reward halving, a quadrennial event that slows the rate of growth in bitcoin supply and looks set to occur around April 19-20, Wall Street giant JPMorgan (JPM) said in a research report on Wednesday.

The once-every-four-years event cut in half the so-called mining reward, which is the amount of Bitcoin released from the network to compensate companies known as miners for validating transactions.

The Bitcoin Halving explained

Every four years, on the halving day, the amount of new Bitcoins created gets cut in half. This means that when Bitcoin halves, the reward given to the contributors securing the network is reduced by 50%, directly impacting the rate at which new Bitcoins are introduced into circulation.

Nansen research analyst Aurélie Barthere agreed that bitcoin's post-halving price returns were generally superior — five to six times greater in the 250 days following halvings compared to other years.

Bitcoin halving means miners receive 50% fewer bitcoins per completed block, making Bitcoin mining less lucrative. But halvenings historically lead to Bitcoin price increases, incentivising miners to keep mining despite the lower reward.