How Bitcoin Halving Shapes the Future of Finance?

Adekunle Joshua

Bitcoin Halving is an event that happens approximately every 4 years, reducing the rate at which new Bitcoins are created. It's encoded in the Bitcoin protocol to control its supply

The idea is to mimic precious metals like gold. By reducing the reward for mining over time, Bitcoin becomes scarcer, potentially increasing its value, just like how gold becomes more precious as it's harder to mine

Every 210,000 blocks mined (roughly 4 years), the reward miners receive for adding a new block to the blockchain is cut in half. It started at 50 BTC, then 25 BTC, 12.5 BTC, and so on

This reduction in mining rewards means that the rate at which new Bitcoins are introduced to the network slows down. It's a mechanism to control inflation and maintain scarcity

Historically, Bitcoin halving events have been associated with price increases. The idea is that if the supply slows, but demand remains or increases, prices could rise due to scarcity

Bitcoin has experienced three halvings so far (in 2012, 2016, and 2020). The next one is expected around 2024. This cycle will continue until the total supply of 21 million Bitcoins is reached.