A Halving halves the amount of new bitcoin that can be created in one block. On Bitcoin’s main network it occurs every 210,000 blocks, roughly once every four years. Bitcoins that already exist are not halved.
If you hold 1 BTC before a halving, you still hold 1 BTC afterward. What changes is the supply of new coins. A miner who finds a valid block of transactions can receive newly created bitcoin, called the Block Subsidy, along with the fees from the transactions included. A halving cuts only this new issuance. Users pay fees out of existing bitcoin, so this rule does not halve them. Nor does it split the unit: one BTC still contains 100,000,000 satoshis. [1]
Bitcoin started with 50 new BTC per block. Later periods allowed 25, 12.5, 6.25 and 3.125 BTC. Equal stretches of the chain therefore add roughly half as many coins as the preceding stretch. Under the current rules, this brings total issuance toward the limit of 21 million BTC. The supply schedule does not depend on a bank’s decision or on whether the price is rising. Anyone can check in advance how much new bitcoin the rules permit. [1] [2]
A block’s position in the chain is called its height. From height 630,000 through 839,999, the subsidy was 6.25 BTC. Block 840,000 could create no more than 3.125 BTC, and that amount applies through height 1,049,999. From block 1,050,000 it falls to 1.5625 BTC. The time when a block is prepared or submitted does not decide this. A Full Node, a computer that independently checks Bitcoin’s rules, calculates the allowed amount from the height and rejects a block claiming more than the subsidy plus its fees. [1]
At an average of ten minutes per block, 210,000 blocks take roughly four years. Individual blocks arrive irregularly, however, and miners’ computing power changes. A calculator can therefore show how many blocks remain, but can only estimate the future date. Each new block may shift that estimate. A halving is triggered by reaching the relevant height, not by midnight on an announced day. [2]
Miners still pay for electricity and equipment operation even as new issuance per block falls. Their results also depend on the BTC price, fees and their share of the network’s total computing power. Some operations may become unprofitable; others have sufficiently low costs. If some computing power leaves, mining difficulty may fall later. That change, Difficulty Adjustment, follows its own rule and aims to maintain the approximate pace of blocks; it does not promise to restore miners’ previous profits. [3]
A halving changes the supply of newly created coins, but the market also trades bitcoin that already exists. Price reflects people’s willingness to buy and sell and their expectations. Because halvings are known in advance, people may react before the block itself. Past price cycles cannot reliably promise another price rise. The issuance rule is known; future demand and price do not follow from it. [1]
The subsidy eras
The newly created part of the reward started at 50 BTC per block. At each 210,000-block boundary it fell to 25, 12.5, 6.25 and 3.125 BTC. The next boundary is block 1,050,000; its future date is only an estimate.
For the clearest picture, read this entry together with Block Subsidy, 21 Million, Mining, Difficulty Adjustment. The reverse links also lead from Block Subsidy, 21 Million, Satoshi, b-money.
01Who triggers a Bitcoin halving?+
No person or company needs to press a button. Computers checking Bitcoin’s rules calculate the permitted new issuance from the block number. They reject a block that awards itself more than this amount plus the applicable transaction fees.
02Does a halving guarantee the price will rise?+
No. Fewer new coins are only part of the story. Price also depends on how many people want to buy or sell and what they expect from the future.