Before diving into the topic of Bitcoin Halving, it is crucial to learn about some of Bitcoin’s fundamental qualities that makes this cryptocurrency such a unique asset. For better understanding, Bitcoin has a supply cap of 21 million BTC and cannot be replicated, produced or ‘printed’ like fiat currency. The process of obtaining Bitcoin is both time and energy-consuming as individuals or potential miners engage in the Proof-of-Work (PoW) verification system known as “mining”.
For a miner to earn Bitcoin, they will have to fulfil two conditions: Firstly, miners have to find and verify a block of transactions and secondly, they have to be the first miner to provide a correct answer to a given numeric problem. Once both conditions are fulfilled, new bitcoins are minted and given to the miner as compensation. This is better known as “block rewards”.
In the halving process, it is a common misconception that all existing Bitcoins are reduced by half. The halving event only applies to the amount of BTC generated from each block reward.
With a total Bitcoin supply limit set at 21 million, Bitcoin’s code mandates that block rewards will be halved with every 210,000 blocks produced. Usually, miners find a new block and add it to the Bitcoin’s blockchain network in intervals of ten minutes. By estimation, a BTC halving event is set to happen once every 2.1 million minutes or approximately every four years.
This topic was modified 11 months, 2 weeks ago by askscn.