The blockchain, the system that underpins Bitcoin, is sustained by rewarding so-called “miners” – whose job it’s to validate transactions – by paying them with the cryptocurrency.
Nonetheless, in contrast to another digital currencies, there’s not an infinite provide of bitcoins. The quantity that may be mined is capped at 21 million, and most are already in circulation.
So roughly each 4 years – or when the Bitcoin blockchain reaches a sure measurement – the variety of bitcoins rewarded to those that efficiently validate transactions is minimize in half. The newest Bitcoin “halving” (or “halvening”) occasion came about on 20 April 2024, decreasing the reward for miners from 6.25 bitcoins to three.125.
This ensures Bitcoin’s provide is drawn out for longer whereas demand, in idea, goes up over time. However with fewer rewards for miners, it will possibly additionally lead some to contemplate whether or not it’s financially worthwhile for them to proceed the expensive operation of working their highly effective computer systems.