Bitcoin is notoriously volatile, prone to sudden price surges and swift reversals that can wipe out millions of dollars of value in a matter of minutes. Those changes are often mysterious to market observers, given the digital currency’s lack of fundamentals, or ties to the real economy. Bitcoin has another quirk, one that was built into the code that gave it birth: every so often, the formula that governs the rate at which new tokens are created changes. As another such event — called a halving — approaches, Bitcoin supporters and skeptics are debating what kind of impact it may have on the coin’s value.
A halving – sometimes referred to as halvening – is a planned reduction in rewards miners receive (the term is mentioned in Bitcoin’s code). Halvings happen once every four years or so – more precisely, every 210,000 blocks of transactions. As the name suggests, each one cuts the amount of Bitcoin miners receive per block reward in half. At Bitcoin’s launch in 2009, miners received 50 Bitcoin per block, but that reward was reduced to 25 in the first halving, in 2012, to 12.5 in 2016, 6.25 tokens in 2020 and is scheduled to drop to 3.125 coins in 2024.
When it is happening?
The quadrennial event is due next around April 2024. In general, predicting the exact date is hard because the time it takes to generate new blocks can slow down or speed up depending on a number of factors. Going by most estimates, there will be 64 Bitcoin halvings before that 21 million maximum is reached sometime around 2140, at which point halvings will stop. Once that happens, miners will no longer collect rewards and are expected to rely on charging fees for handling transactions, similar to what credit card companies do.
How Many Bitcoins Are Mined Each Day?
As of the first-half 2022, approximately 900 bitcoins were mined each day globally.
Every 10 minutes, miners verify one block of bitcoin transactions. The current reward for verifying one block of bitcoin is 6.25 bitcoins. So, approximately 900 bitcoins are released into the market every day. However, approximately every four years, the reward for mining a block of transactions gets cut in half, in an event called “halving.” The last halving event took place in May 2020, which resulted in the block reward being reduced to 6.25 bitcoins.
It’s because of the halving events that it will take until the year 2140 for all bitcoins to be mined. When bitcoin mining first started, the block reward was 50 BTC per block, but each bitcoin was only worth pennies.
Once all the bitcoins have been mined, miners will still receive mining fees as an incentive to keep their equipment running.
Maximum supply: 21,000,000
Amount in circulation: Approx.19,093,556 (approx. 2000 are lost)
Creation process: Bitcoin (BTC) — defined in 2008 in a whitepaper, and launched in 2009 — is acclaimed as the world’s first cryptocurrency. BTC is a peer-to-peer (P2P) independent network. All participants are considered equals on the Bitcoin network, and all transactions occur directly between them, without the need for an intermediary (like a bank) to permit or facilitate them.
BTC’s mining process is the mechanism that creates new coins. As transactions are relayed across the network, they get picked up by miners and packaged into blocks, which in turn are protected by complex cryptographic calculations.
» Each block takes ten minutes, so there are six blocks per hour, 24 hours per day. The original block reward was 50 BTC. Thus, 7200 BTC per day introduced to the system.
Mining will be calculated In every 10 minutes
» 1440 minutes (24 hours) / 10 minutes = 144 blogs will be done in 1 day
» 144 x last block reward = current BTC mining
» For example, 144 x 50 (block reward) = 7200 blogs created
» 7200 / 2 = 3600 (2012) Each halving year blocks price will cut in half
Now let’s see what happened in all previous halving
Pre-halving period
The First Bitcoin Halving 2012
The halving event occurred in 2012 when 210,000 blocks were solved by the miners who received 25 BTCs as block rewards.
Their mining resulted in mining 75% of all the Bitcoins released. The price of Bitcoin was around $12.35 on the halving day on Nov 28, 2012.
On November 28, 2012, the first Bitcoin halving occurred, reducing the mining reward from 50 BTC to 25 BTC.
The Second Bitcoin Halving 2016
The second halving of Bitcoin dates back to Jul 09, 2016, when 420,000 locks were mined.
The reward included 12.5 BTCs, equalling 87.5% of all Bitcoins.
BTC reached $650.53 on the day of the second halving.
On July 9, 2016, the second Bitcoin halving occurred, reducing the mining reward from 25 BTC to 12.5 BTC.
The Third Bitcoin Halving 2020
May 11, 2020, marked the time of the third Bitcoin halving when 630,000 Bitcoin blocks were mined by the miners who received 6.25 BTCs as rewards.
By the third halving, 93.75% of all Bitcoins were mined. The price of each Bitcoin surmounted to $8,821.42 on this day.
On May 11, 2020, the third Bitcoin halving occurred, reducing the mining reward from 12.5 BTC to 6.25 BTC.
There will be a total of 32 Bitcoin halvings until the year 2140, which is when the last Bitcoin is expected to be mined. Here’s a summary of the upcoming Bitcoin halvings until 2040.
Fourth Bitcoin Halving 2024
The next halving, which is expected to happen on Dec 2023 or Mar 2024, will result in the mining of 840,000 blocks, which equals 96.875% of all the BTCs.
The miners will win 3.125 Bitcoins as a reward for solving the block. Historically, bitcoin halving has had a positive effect on the price of bitcoin.
In the past two halving events, which occurred in 2012 and 2016, the price of bitcoin increased significantly in the months following the event.
However, past performance does not indicate future results, and there is no guarantee that the bitcoin price will increase after the next halving event.
Bitcoin Having 2028
The fifth Bitcoin halving is expected to happen around 2028 when 1,050,000 blocks are mined, i.e., 98.4375% of the whole BTCs.
The miners will receive 1.5625 BTCs for their work.
Bitcoin Halving 2032
Upon the sixth halving, 1,260,000 blocks will be solved by the miners, who will receive 0.78125 BTCs as mining rewards.
By 2032, 99.21875% of Bitcoins will be mined.
Bitcoin Halving 2036
In 2036, we should expect the 7th halving of 1,470,000 Bitcoin blocks, which means 99.609375% of the whole Bitcoin supply will be mined.
The smart miners who could get there will receive 0.390625 BTC, which is priceless as the price of each BTC will have skyrocketed by then.
Bitcoin Halving 2040
The last Bitcoin halving is expected to happen around 2040 when 1,680,000 blocks of Bitcoin are mined, which equals 99.8046875%.
The block reward will amount to 0.1953125 BTCs then.
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Let’s calculate how can BTC price can reach at 100 million (assumption)
Currently 900 BTC mine per day x 27000 (current market price) = 24.30 millions Reward
24.30 millions + 5.7 millions transaction cost = 30 million is actual cost
So in 2023, 30 – 40 million BTC is actual cost, after 10 (2033) year 100 million can touch as per 8-10 % inflation rate.
In 2040-44 price will be double 200 million.
Can Bitcoin Reach 100k?
Crypto experts believe that Bitcoin will finally hit $100,000, and it’s more a matter of when not if. The following table shows the Bitcoin price potential high and low in the coming years.
The Math Behind The Expected $100K ATH In 2024
The Halving Is 82% Less Effective on The Price, Each Cycle
We explain here why Bitcoin will not reach more than $100k (during the next cycle).
2024 will be the year of the halving. Odds suggest that BTC will recover in 2024, and the price will reach a new ATH by the beginning of 2025.
However, each halving does not have the same effect as the previous ones.
The new supply entering is already too low, almost insignificant. So, any further reduction (beyond the fourth halving) will not bring the supply shock we witnessed in previous cycles.
BTC has the potential to achieve $100,000 within 2024 after the 4th halving, as all the forces that sustain it are still active.
The Halving Economics
The halving is an operation hard-coded by Satoshi in Bitcoin.
Every 210,000 blocks miner’s rewards are reduced by 50% with the halving.
So, until 2012, miners received 50 new BTC for every block they mined.
Between 2012 and 2016, the new Bitcoins per block were 25, and until 2020 12,5.
The last Bitcoin (out of the 21 million) will be mined in 2140.
Halvings:
block 210,000: 1st halving: Nov. 28, 2012
block 420,000: 2nd halving: July 9, 2016
block 630,000: 3rd halving: May 11, 2020
block 840,000: 4th halving (est.): April 2024
block 1,050,000: 5th halving (est.): 2028
Mining Rewards:
2008–2012: 50 BTC
2012–2016: 25 BTC
2016–2020: 12.5 BTC
2020–2024: 6.25 BTC
2024–2028: 3.125 BTC
Bitcoin Mined And Total Supply:
2008–2012: 10,500,000 BTC mined (50% of total)
2012–2016: 5,250,000 BTC (15,750,000 / 21,000,000–75% mined)
2016–2020: 2,625,000 BTC (18,375,000 / 21,000,000–87.50% mined)
2020–2024: 1,312,500 BTC (19,687,500 / 21,000,000–93.75% mined)
2024–2028: 656,250 BTC
By April 2024, on block 840.000, 93,75% of the total supply (almost 20 million) of Bitcoins will have been mined already, leaving less than 1.5 million to be mined in the next 120 years.
The halving reduces the selling pressure on the market as the daily supply of new Bitcoins decreases by 50%.
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