Halving Definition in Crypto

Halving is a built-in event on some blockchains where the reward for adding a new block is cut in half. It slows the creation of new coins and helps keep the supply predictable over time.

Core idea

A halving reduces the block reward by 50 percent at preset intervals. In Bitcoin, this mechanism spaces out issuance so the total supply approaches a fixed cap over many years instead of all at once.

Why halvings exist

Halvings manage issuance and create scarcity. By steadily reducing new supply, Bitcoin’s design aims to make issuance more predictable than fiat money, which can expand at a central bank’s discretion. The supply curve approaches a hard limit, after which no new coins are created.

How it works in Bitcoin

Bitcoin pays miners a reward when they successfully add a block. Roughly every 210,000 blocks, the protocol halves the reward, which slows how quickly new bitcoin enters circulation. The cadence is about every four years because Bitcoin targets a new block about every ten minutes.

Schedule and past events

Bitcoin has already experienced three halvings, with rewards stepping down from 50 BTC to 25 BTC on November 28, 2012, then to 12.5 BTC on July 9, 2016, and to 6.25 BTC on May 11, 2020. The next cut brought the reward to 3.125 BTC at block height 840,000 in April 2024.

Impact on miners

When a halving arrives, miners earn fewer coins for the same work. That can squeeze profit margins unless price, efficiency, or fees make up the difference. Over the long run, as block rewards shrink, transaction fees are expected to carry a larger share of miner revenue.

Effects on markets

Halving often becomes a headline event that brings new attention to Bitcoin. Some investors frame it as a potential driver of price if demand stays the same or rises while new supply falls. Others note that outcomes vary, so price moves are not guaranteed.

Common misconceptions

• “Halving makes coins scarce overnight.” Supply growth slows at each event, but the total supply continues to rise on a predictable path. 
• “Miners will stop after halving.” Some miners do exit when rewards drop, but others upgrade hardware, seek lower energy costs, or rely more on fees.