- Halving Reduces Rewards: Bitcoin’s block reward halved from 6.25 BTC to 3.125 BTC on April 19, 2024.
- Scarcity Drives Price: The reduced Bitcoin issuance may lead to increased prices due to its newfound scarcity.
- Miners Need Efficiency: Miners must upgrade technology to stay profitable with the new, lower rewards.
On the evening of April 19, 2024, Bitcoin underwent a transformative change with the activation of its fourth halving at block 840,000. The latest halving has reduced the block reward from 6.25 BTC to a mere 3.125 BTC, effectively slashing the rate at which new bitcoins are introduced into the market.
The halving event was successfully mined by the ViaBTC pool, a first for the company, which now joins the ranks of previous participants like Slush Pool, F2Pool, and Antpool, each of whom had the honour in past halving events. This achievement allows ViaBTC Pool to claim an “epic sat,” part of a rare collection named under the Theory of Ordinals that recognizes the scarcity of such sats — there will only ever be 32, correlating with the number of halvings in the cryptocurrency’s lifecycle.
The reduction in Bitcoin issuance heralds the beginning of a new phase of digital scarcity. Over the next four years, or 210,000 blocks, the total number of bitcoins issued as miner subsidies will be just 656,250 BTC. This represents a significant decrease that will bring the total issuance by 2028 to 96% of the maximum 21 million BTC planned.
The halving is generally seen in a positive light within the cryptocurrency community, as it traditionally leads to a supply shock. Historically, these events have triggered a fear of missing out among investors, resulting in an influx of capital to the market and an increase in Bitcoin prices due to the reduced availability.
However, the influence of halvings may be diminishing as the total supply of Bitcoin nears its cap, and fewer bitcoins are left to enter circulation. At the time of this article, Bitcoin’s price stands at $63,867, showing stability despite the reduced inflow of new coins.
The halving also impacts miners by reducing the reward for mining new blocks. Although the network’s hashrate — a measure of the computational power per second used when mining — continues to climb, reaching new highs, the reward halving necessitates adjustments within the mining community. This includes the development and deployment of more efficient mining equipment to maintain profitability.
It is crucial to note that Bitcoin’s halving is an automated feature coded into its blockchain protocol, designed to execute without direct human intervention. This ensures a predictable, transparent reduction in supply, aligning with Satoshi Nakamoto’s vision of a deflationary currency.
