{"id":6550,"date":"2019-07-24T09:12:35","date_gmt":"2019-07-24T09:12:35","guid":{"rendered":"https:\/\/qa-front.dev.techhub.cloud\/blog\/?p=815"},"modified":"2025-12-15T15:44:06","modified_gmt":"2025-12-15T15:44:06","slug":"bitcoin-halving","status":"publish","type":"glossary","link":"https:\/\/paybis.com\/blog\/glossary\/bitcoin-halving\/","title":{"rendered":"2024 Bitcoin Halving"},"content":{"rendered":"\n

Bitcoin, the world’s first and most well-known cryptocurrency, underwent the 4th halving event on April 19, 2024. During this halving event, the BTC reward amount was cut by 50%, resulting in 3.125 BTC per mined block. <\/p>\n\n\n\n

The Bitcoin halving is a four-year phenomenon that plays a crucial role in BTC price<\/a> by tipping the scales of supply and demand. If you are new to crypto you might have many questions about this upcoming event.<\/p>\n\n\n\n

Why Was Bitcoin Halving Created?<\/h2>\n\n\n\n

The introduction of Bitcoin halving by Satoshi Nakamoto is a stroke of genius that reflects a deep understanding of economic principles and a visionary approach to creating a sustainable digital currency.<\/p>\n\n\n\n

Traditional fiat currencies can be printed endlessly.<\/strong> As a result their value, i.e., purchasing power, reduces. By doing this, they enter an inflationary economic model where they incentivize spending now rather than later. This system is steered towards high-leverage practices such as debts, loans, and credit.<\/p>\n\n\n\n

The inflationary model is detrimental<\/strong>, especially in the long term. The value of people\u2019s savings reduces over time and, when retirement finally comes, their lifelong savings are worth only a fraction of their original value.<\/p>\n\n\n\n

Let\u2019s take the buying power of $100 USD as an example. Due to inflation, that amount of money in 1970 would have approximately the same purchasing power of $791 in 2024.<\/p>\n\n\n

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You can check this on your own for any dates with an inflation calculator<\/a>.<\/p>\n\n\n\n

That is why Satoshi Nakamoto introduced the Bitcoin halving principle \u2014 similar to the way precious metals like gold are mined. Just as gold becomes scarcer and harder to mine over time, so too does Bitcoin. Satoshi ingeniously implemented this feature to make Bitcoin a deflationary asset.<\/p>\n\n\n\n

As such, he set some ground rules (coded within the Bitcoin blockchain) to render the cryptocurrency resistant to inflation.<\/p>\n\n\n\n

Bitcoin Halving: What Is It and How Does It Work?<\/h2>\n\n\n\n

Satoshi Nakamoto<\/a> introduced the reward halving. This essentially stands for the slashing of miners\u2019 rewards<\/a> in half, approximately once every 4 years<\/strong>. Every time 210,000 blocks are mined, the reward decreases and a new \u201creward era\u201d starts.<\/p>\n\n\n\n

There have been 3 more halvings<\/a> in the past, and we are now in the 4th reward era, where one mined block grants 6.25 BTC.<\/p>\n\n\n

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Bitcoin Fighting Inflation<\/h3>\n\n\n\n

In a deflationary economic model, the issuance of new currency lessens over time, which means that it will be worth more later on. Taking into consideration the scarcity, mining difficulty, and the controlled supply of Bitcoin, what you get is a foolproof model of a commodity that increases in value over time.<\/p>\n\n\n\n

Satoshi Nakamoto explained the idea behind the halving:<\/p>\n\n\n\n

\u201cIf the coinage does not increase as fast as demand, the opposite of inflation will occur, and early holders of the currency will see its value increase. In an economy, money has to be distributed and produced somehow, and a constant rate seems to be the best formula.\u201d<\/em><\/p>\n\n\n\n

There have been criticisms of this model in the past. Wouldn\u2019t this create another problem, namely collecting Bitcoin and never actually spending it? This question often comes up:<\/p>\n\n\n\n

\u201cWhy would anyone want to spend Bitcoin, if they are certain that it will be worth more in the future?\u201d<\/em><\/p>\n\n\n\n

The answer is quite simple, really. Although deflation discourages spending, you can never eliminate the need for it. Basic necessities are not something we can put aside. Commodities and luxuries become a timing preference instead of an artificial need. People get to choose if they want to spend now or later.<\/p>\n\n\n\n

As such, one can use Bitcoin both as a store of value and as a currency. Only, instead of its value decreasing and stagnating over time, as is the case with government-based currencies, Bitcoin increases its worth over time, leading to increased mainstream adoption.<\/p>\n\n\n\n

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Useful links<\/h2>\n\n\n\n