Hassan Maishera
TL;DR
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The fourth Bitcoin halving was completed on Friday, with the block reward slashed by 50%.
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Miners are now rewarded 3.125 BTC per each block they mine.
Halving Results in Block Reward Reduction
The Bitcoin blockchain successfully completed its fourth Bitcoin halving on Friday. This latest halving has seen miners’ block subsidy rewards drop from 6.25 BTC to 3.125 BTC.
The halving occurred at block height 840,000, ushering in a new epoch for the network. The events are programmed to occur automatically every 210,000 blocks, which takes roughly four years to attain.
Upon the completion of each halving, miners receive 50% few BTCs as a reward for every block of transactions they mine and add to the blockchain. While the block rewards are reduced, miners continue to earn additional transaction fee rewards for each block mined as normal.
Since the Bitcoin network went live in 2009, there have now been four halvings. The previous three halvings saw the reduction of block rewards from 50 BTC to 25 BTC in 2012, then to 12.5 BTC in 2016 and 6.25 BTC at the last halving on May 11, 2020.
With Friday’s halving, miners now receive around 450 BTC in total per day compared to 900 BTC previously. The programming also indicates that the halving events will continue until the last bitcoin is expected to be mined around the year 2140. Once the last BTC is mined, miners will only earn from transaction fees.
While speaking to The Block, Binance CEO Richard Teng pointed out that the decrease in block rewards could see some miners exit the market. This could temporarily impact the Bitcoin network’s processing abilities before the next difficulty adjustment. He added that,
“The Bitcoin network has shown resilience in the face of such challenges in the past. Advancements in mining technology and strategies, as well as potential adjustments in mining difficulty, could mitigate the impact of reduced miner participation. Additionally, some miners may opt to switch to mining altcoins or explore alternative revenue streams within the crypto space, which could help maintain a balance in the overall mining ecosystem.”
Many expect Bitcoin’s price to rally higher following the Bitcoin halving. At press time, BTC is trading at $65,914, up by 1% in the last 24 hours.
