Halving
An event every 210,000 blocks (~4 years) that cuts the Bitcoin block subsidy in half, reducing the rate of new BTC creation.
What is the Halving?
The Bitcoin halving (sometimes called "halvening") is a programmed event that reduces the block subsidy by 50% every 210,000 blocks, approximately every four years. This mechanism controls Bitcoin's monetary supply, ensuring that the total supply asymptotically approaches 21 million BTC.
Halving History
| Halving | Date | Block Height | Subsidy Before | Subsidy After |
|---|---|---|---|---|
| 1st | November 2012 | 210,000 | 50 BTC | 25 BTC |
| 2nd | July 2016 | 420,000 | 25 BTC | 12.5 BTC |
| 3rd | May 2020 | 630,000 | 12.5 BTC | 6.25 BTC |
| 4th | April 2024 | 840,000 | 6.25 BTC | 3.125 BTC |
| 5th | ~2028 | 1,050,000 | 3.125 BTC | 1.5625 BTC |
How the Halving Affects Miners
The halving has an immediate and significant impact on mining economics:
- Revenue drops by ~50%: The block subsidy (the largest component of most block rewards) is cut in half overnight
- Less efficient miners exit: Those with higher electricity costs or older hardware become unprofitable
- Difficulty adjusts downward: As miners leave, difficulty drops, making remaining miners more profitable
- A new equilibrium forms: Over weeks to months, the mining ecosystem stabilizes at a new profitability level
Historically, Bitcoin's price has risen significantly in the months following each halving, which has offset or exceeded the subsidy reduction. However, past performance does not guarantee future results, and miners should plan for the possibility that price does not compensate for reduced block subsidies.
Why the Halving Exists
The halving is central to Bitcoin's design as a deflationary monetary system. By reducing the rate of new BTC creation on a fixed schedule, Bitcoin mimics the scarcity of precious metals. The predictable supply schedule allows miners and investors to plan ahead, unlike fiat currencies where supply decisions are made by central banks.
Planning for the Next Halving
Smart miners prepare for halvings by:
- Upgrading to more efficient hardware before the halving
- Securing lower electricity rates
- Building cash reserves to survive potential unprofitable periods
- Diversifying revenue with transaction fees and merged mining
The next halving is expected around 2028 at block 1,050,000, reducing the subsidy from 3.125 BTC to 1.5625 BTC per block.