This technical event, written into bitcoin’s code, happens every four years. Simply put, it’s when the rewards for those who “mine” bitcoin are halved. This slows the pace at which new bitcoins enter the market.
Since there will only ever be 21 million bitcoins, the halving serves to create more scarcity. About 90 percent, or 19 million, of all bitcoins that are “produced” have now been created and are on the market.
This time, the number of new bitcoins goes from about 6.5 to 3.25 bitcoins every ten minutes, or from 900 to 450 every day.
In the past, halvings have been followed by massive increases in bitcoin prices to new records. But this time things are different, writes CNBC.
Bitcoin has already reached a new record high, before the halving has taken place. That’s because the approval of bitcoin exchange-traded funds has excited the market and led to a lot of demand for the cryptocurrency.
– Everyone hopes that bitcoin will increase in value and that it will compensate for the reward for the miners being halved, says chairman Matthew Schultz at the CleanSpark Financial Times.
In 2140, the last bitcoin according to the protocol will have been mined.