Bitcoin Halving

📝 Definition:

Bitcoin halving is an event where the reward for mining new Bitcoin blocks is cut in half.

This happens approximately every 4 years and reduces the rate at which new Bitcoins are created.

🔑 Key Features:

1. Scheduled Event: Happens roughly every 4 years or after every 210,000 blocks are mined.
2. Mining Reward Reduction: Cuts the mining reward in half, reducing the number of new Bitcoins created with each block.
3. Inflation Control: Helps control how many Bitcoin’s exist and inflation rate.
4. Impact on Miners: Affects how much money you can make from Bitcoin mining.

⚙️ How It Works:

1. Block Countdown: The Bitcoin network keeps track of the number of blocks mined.
2. Halving Event: Once 210,000 blocks are mined, the halving event occurs, cutting the mining reward in half.
3. Reward Adjustment: Miners start receiving half the previous reward for each new block mined.
4. Repeat Process: This process repeats approximately every 4 years.

💡 Applications:

1. Supply Control: Helps manage Bitcoin’s supply by reducing the rate at which new Bitcoins are created.
2. Market Impact: Can influence Bitcoin’s price and demand.
3. Miner Motivation: Affects miner behavior and the overall mining community.

🔍 Example:

Imagine you run a lemonade stand where you get 10 lemons for every hour you work.

If a halving happen every hour, you will get half the number of lemons after every hour pass.

After the first halving event, you would only get 5 lemons for the same hour of work.

Then 2.5 after the next halving, etc...

In the Bitcoin world, miners receive fewer Bitcoins as a reward after each halving, making it harder to get new coins.