The Bitcoin halving is a scheduled cut in the number of new bitcoins created with each block. Every 210,000 blocks, which takes roughly four years, the reward paid to miners drops by half. It is the mechanism that limits Bitcoin's supply to just under 21 million coins.
How the Halving Works
Miners collect transactions into blocks and compete to add each block to the chain. The miner who succeeds is allowed to include one special transaction, called the coinbase transaction, that creates new bitcoins and pays them to the miner. This amount is the block subsidy. The miner also collects the fees from the transactions in the block.
The subsidy started at 50 BTC when the network launched in January 2009. The software rules say it must halve every 210,000 blocks. Nobody votes on it and no company triggers it. Every node checks every block, and a block that pays the miner too much is rejected.
Satoshi Nakamoto's Bitcoin whitepaper describes the idea behind this: new coins give miners a reason to secure the network in its early years, and fees are meant to take over once a fixed number of coins is in circulation.
The halving is counted in blocks, not calendar dates. Blocks arrive about every 10 minutes on average, so 210,000 blocks takes close to four years. The exact day is only known shortly before it happens.
Halving History
- First halving: November 28, 2012, at block 210,000. The subsidy fell from 50 to 25 BTC.
- Second halving: July 9, 2016, at block 420,000. The subsidy fell from 25 to 12.5 BTC.
- Third halving: May 11, 2020, at block 630,000. The subsidy fell from 12.5 to 6.25 BTC.
- Fourth halving: April 2024, at block 840,000. The subsidy fell from 6.25 to 3.125 BTC.
At 3.125 BTC per block and about 144 blocks a day, the network now issues roughly 450 new BTC per day. Before the 2024 halving it was about 900.
Why the Supply Stops Near 21 Million
Each halving era produces half as many coins as the one before it. The first era created 10.5 million BTC, the second 5.25 million, the third 2.625 million, and so on. The total of that series approaches 21 million but never passes it.
The subsidy is counted in satoshis, the smallest unit of Bitcoin, and is rounded down at each halving. After 33 halvings the subsidy rounds to zero. That point is expected around the year 2140. From then on, miners will be paid by transaction fees alone. The Bitcoin.org FAQ covers the supply limit and how new coins are created.
What Changes for Miners
A halving cuts the subsidy part of miner income by half in a single block. Electricity and hardware costs stay the same. Miners with old machines or expensive power can become unprofitable and switch off.
When machines leave the network, blocks slow down. Bitcoin corrects this with the difficulty adjustment. Every 2,016 blocks, about two weeks, the network recalculates how hard it is to find a block so that the average returns to 10 minutes. Lower difficulty makes mining cheaper for those who remain. The Bitcoin developer guide on mining explains how miners build blocks and claim the reward.
As the subsidy shrinks, fees matter more. Whether fees alone will pay for enough mining to keep the network secure in the long run is an open question that developers and researchers still debate.
The Halving and Price
In the 12 to 18 months after each of the first three halvings, the price of Bitcoin reached a new all-time high. This is the basis of the popular four-year cycle idea.
The pattern rests on very few data points, and other forces were at work each time, including interest rates, new exchanges and new groups of buyers. The 2024 cycle already broke one part of the pattern: Bitcoin set a new all-time high in March 2024, before the halving, after spot Bitcoin exchange-traded funds began trading in the United States in January 2024.
The supply effect also gets smaller every time. The 2012 halving removed 25 BTC per block from new issuance. The 2024 halving removed 3.125 BTC. Measured against the roughly 19.7 million coins that already existed in April 2024, the change in new supply is small.
What the Halving Does Not Do
- It does not guarantee a price increase. Demand can fall faster than new supply.
- It does not reduce the coins you already hold or change the existing supply.
- It does not affect transaction speed or block size.
- It is not a surprise. The schedule has been public since 2009, so markets can price it in advance.
Common Mistakes
One mistake is treating the halving date as a buy or sell signal. The event is known years ahead, and price moves around it have differed widely each cycle.
Another is assuming the past will repeat on the same timetable. Three or four cycles are not enough to prove a rule.
A third is forgetting the miners. Mining companies are directly exposed to the revenue cut, and their results after a halving can differ a lot from the price of Bitcoin itself.
Nothing in this article is financial advice.
Key Halving Facts
- Interval: every 210,000 blocks, about four years
- Starting subsidy: 50 BTC in 2009
- Subsidy since April 2024: 3.125 BTC
- Next halving: block 1,050,000, expected in 2028, to 1.5625 BTC
- Share of supply mined by the 2028 halving: about 96.9%
- Final subsidy: expected around 2140
- Maximum supply: just under 21 million BTC
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