Halving is a programmed event built into the protocol of certain cryptocurrencies, notably Bitcoin, where the reward given to miners for validating transactions and securing the network is reduced by half. This event occurs at regular intervals, typically every four years, and is designed to limit the rate at which new coins are created, thereby controlling inflation and ultimately capping the total supply of the cryptocurrency. In the case of Bitcoin, for example, the block reward started at 50 BTC per block when the network launched in 2009. After the first halving in 2012, the reward was reduced to 25 BTC per block, then halved again to 12.5 BTC per block in 2016. The most recent halving occurred in May 2020, reducing the reward to 6.25 BTC per block. Halving events are significant because they have implications for the cryptocurrency's supply dynamics and often affect its price. The reduction in the rate of new coin issuance can lead to increased scarcity and potentially drive up demand, which may contribute to price appreciation over time. Halving events are closely monitored by the cryptocurrency community and are often associated with periods of increased market volatility and speculation.
