Bitcoin Halving, Explained Like You Are Hungry
Every four years or so, a pizza shop bakes half as many pizzas as before, on a schedule nobody can change. After a while there are very few new pizzas, and the whole town argues about what that does to the price. That is the Bitcoin halving.
The 10-second version
- Every 210,000 blocks, the prize for adding a new page to Bitcoin's shared record book is cut in half. (Each page is called a block.) That works out to about four years.
- There will never be quite 21 million bitcoin. New coins slow down, then stop.
- The next halving is not tomorrow. The last one was April 20, 2024.
The four halvings so far
| Halving | Block | Date | Reward afterward |
|---|---|---|---|
| 1st | 210,000 | November 28, 2012 | 25 BTC |
| 2nd | 420,000 | July 9, 2016 | 12.5 BTC |
| 3rd | 630,000 | May 11, 2020 | 6.25 BTC |
| 4th | 840,000 | April 20, 2024 | 3.125 BTC |
BTC is the short name for bitcoin. Source: Bitcoin Wiki, Controlled supply. The start was 50 BTC per block in 2009.
Why 21 million?
Because adding up 50 + 25 + 12.5 + ... gets closer and closer to a limit without passing it. The Bitcoin Wiki puts the real total at about 20,999,999.9769 BTC, slightly under 21 million, because of how amounts are stored. It also says the creator never clearly explained why that number was chosen, and the popular explanations are guesses.
When does the last coin arrive?
The Bitcoin Wiki gives May 7, 2140 as an estimate if the computers that keep Bitcoin running stayed about as busy as they are now. It also warns that an exact date is hard to predict. So: "around 2140" is the honest answer. Nobody reading this will be there, and yet it is already written into the code.
What we do not know
Everyone loves to draw a chart of "the price after each halving". We are not going to tell you what happens after the next one. Four data points is a small sample, and a lot of other things (interest rates, new funds you can buy in a normal brokerage account, news) changed each time. If someone sounds certain, ask for their homework.