Before Bitcoin: The Origins of Halving in Code and Science

Before Bitcoin, the idea of halving wasn’t used in money, but it appeared in many areas of computing and technology. Satoshi Nakamoto’s decision to halve Bitcoin’s block rewards every 210,000 blocks created a fixed supply and digital scarcity. While this was new in monetary design, the concept of reducing something by half over time was already well-known in code and science.

One early example is in internet protocols. In the 1980s, TCP/IP used a method to control traffic flow called congestion control. When the network detected packet loss, it cut the rate of data transfer in half. This helped avoid overload and kept the system stable. The same principle applies to Bitcoin’s halving, which slows the issuance of new coins.

In Bitcoin’s code, Satoshi used a simple bit shift to perform the halving. Instead of dividing with standard arithmetic, the code shifts bits to the right, which divides by powers of two. This was a common technique in older programming languages like C, where performance mattered and bit operations were faster than division.

Another place where similar math appeared was in networking retry systems. When a connection failed, the system wouldn’t retry immediately. Instead, it waited, doubling the delay each time. This is known as exponential backoff. The wait time increased as a power of two, using the same mathematical structure as Bitcoin’s halving, just applied in the opposite way.

Hardware also used halving. Early CPUs, when faced with overheating, often cut their clock speeds in half to cool down while staying operational. The logic was straightforward: reduce the workload to manage resources better.

In video games, especially role-playing games, rewards often decreased over time. As players leveled up, the experience points gained from tasks shrank, often using a halving formula. This created a sense of progression while managing the pace of the game.

Hashcash, a pre-Bitcoin proof-of-work system used to fight spam, also followed similar ideas. It didn’t halve rewards but increased the effort required to send repeated messages. The more someone used the system, the harder it became, using powers of two to scale difficulty.

Satoshi didn’t invent halving, but he applied it in a new way. By using code to reduce supply predictably, he introduced a form of scarcity that didn’t rely on trust or central control. The halving mechanism came from familiar places in technology, reimagined for a monetary system.

Bitcoin’s total supply adds up to 21 million coins because of a mathematical series where each reward is half the previous one. This sum converges to a finite number, creating certainty in supply through a simple rule.

Halving, as a concept, had a long history before Bitcoin. Satoshi took a pattern that worked in many systems and gave it new meaning through money.