TLDR: Bitcoin Halving reduces miner rewards every 4 years, impacting Bitcoin’s supply and prices; future sustainability hinges on transaction fees post final halving in 2140.
This article is a summary of a You Tube video “What is Bitcoin Halving? Explained by CoinGecko” by CoinGecko
Key Takeaways:
- Bitcoin Halving Process: Occurs every four years, reducing the block reward for miners by half.
- 21 Million Cap: Total supply of Bitcoin is capped at 21 million coins, after which no more will be created.
- Miner Incentive: Miners are rewarded with Bitcoin for validating transactions and securing the network.
- Initial Reward: At Bitcoin’s launch, the reward per block was 50 BTC.
- Halving Schedule: The reward halves every 210,000 blocks, roughly every four years, with halvings in 2012, 2016, and 2020.
- Impact on Bitcoin Prices: Halving tends to increase Bitcoin prices if demand remains constant or increases, due to reduced new supply.
- Last Halving in 2140: Predictions suggest the last Bitcoin halving will occur in 2140, ending block rewards.
- Future Miner Revenue: Post-2140, miners will rely on transaction fees for revenue instead of block rewards.
- Network Security: Ongoing miner participation is crucial for validating transactions and maintaining Bitcoin’s security.
- Sustainability Question: There is speculation on whether the reduction in block rewards and reliance on transaction fees will sustain Bitcoin in the long term.
