Halving is a mechanism that decreases the reward given to miners or validators in a crypto network by 50% after a set number of blocks are processed. This feature is essential for several cryptos, including Bitcoin (BTC).
For Bitcoin, new coins are generated as part of the block reward, which consists of the block subsidy and transaction fees. When miners successfully ” find ” and validate a new block, they receive newly minted coins. With Bitcoin, blocks are mined approximately every 10 minutes, and the block subsidy decreases at a specific rate. Consequently, halving occurs every 210,000 blocks, or roughly every 4 years, reducing the reward rate by 50%.
This reduction decreases the number of Bitcoins in circulation, which can lead to higher demand and potential price inflation in the crypto market.
