The #Bitcoin Halving cycle is a mechanism which cuts the block reward for mining in half every 210,000 blocks (~every four years).
Put simply, Bitcoin’s monetary inflation rate exponentially decreases every 4 years until all 21 million bitcoins have been mined, around 2140.
How do we know the #Bitcoin Halving will occur every four years?
Because of the Difficulty Adjustment, which happens every 2016 blocks (~2 weeks) & ensures the time taken to mine a block remains ~10 minutes, regardless of the total computational power (hashrate) of the network.
Every 2016 blocks (2 weeks) the #Bitcoin protocol performs a check to determine the Difficulty Adjustment:
If blocks were mined faster than every 10 minutes on average during this period, the difficulty increases.
If blocks were mined slower, the difficulty decreases.
#BITCOIN MATH FUN FACT:
At the end of each halving cycle, the percentage of total Bitcoin left to be mined corresponds to the block reward from the previous cycle, expressed as a % of the total supply of 21 million bitcoin.
After each #Bitcoin halving cycle, approximately 50% of the remaining Bitcoin to ever be mined is issued in that cycle.
In the current cycle, the block reward is 6.25 bitcoin. At the beginning of this cycle, there were about 18.375 million bitcoin in existence (87.5% of the total supply), leaving 12.5% (or 2.625 million bitcoin) yet to be mined.
At the end of this cycle, which is less than 25,000 blocks away, the block reward will halve to 3.125 bitcoin. By this time, we'll have about 19.6875 million bitcoin in existence (93.75% of the total supply), leaving 6.25% (or 1.3125 million bitcoin) yet to be mined, which matches the block reward from this cycle.
#Bitcoin101
#AnotherFuckingBitcoinPodcast
H/t to nostr:npub14uhkst639zvc2trx2nlsvk4yqkjp690zk89keytnzgmq2az0qmnq58ez89 for the visuals I used in this episode:
