How does the Bitcoin halving work?
When Bitcoin launched, miners would be awarded 50 BTC for each valid block they found.
The first halving took place on November 28th, 2012. At that point, the protocol reduced the block subsidy from 50 BTC to 25 BTC. The second halving occurred on July 9th, 2016 (25 BTC to 12.5 BTC). The last one took take place on May 11th, 2020, bringing the block subsidy down to 6.25 BTC. In the 2024 halving, the reward will drop from 6.25 BTC per block to 3.125 BTC.
When Will All 21 Million Bitcoins be Mined?
All 21 million bitcoins (BTC) will be mined by 2140. But more than 98% will be mined by 2030.
What impact does the Bitcoin halving have?
Those that are most impacted by halvings are miners. It makes sense, as the block subsidy makes up a significant part of their revenue. When it is halved, they only receive half of what they once did. The reward also consists of transaction fees, but to date, these have only made up a fraction of the block reward.
Halvings could, therefore, make it unprofitable for some participants to continue mining. What this means for the wider industry is unknown. A reduction in block rewards might lead to further centralization in mining pools, or it could simply promote more efficient mining practices.
If Bitcoin continues to rely on a Proof of Work algorithm, fees would need to rise to keep mining profitable. This scenario is entirely possible, as blocks can only hold so many transactions. If there are a lot of pending transactions, those with higher fees will be included first.
Historically, a sharp rise in Bitcoin price has followed a halving. Of course, there isn’t much data available as we’ve only seen two so far.
When is the next Bitcoin halving?
The next halving is expected to take place in 2024, when the reward will drop to 3.125 BTC.
Is Bitcoin Anonymous?
Not really. Bitcoin might seem anonymous initially, but this isn’t correct. The Bitcoin blockchain is public and anyone can see the transactions. Your identity isn’t tied to your wallet addresses on the blockchain, but an observer with the right resources could potentially link the two together.
