What is cryptocurrency halving?

Halving: definition

Halving is an automatic mechanism introduced into the Bitcoin (BTC) code by its inventor Satoshi Nakamoto: this implies that at regular intervals, the emission of bitcoins per block created by miners is halved.

Miner reward halved for every 210,000 blocks created

Thus, since the creation of bitcoin in 2008, the reward granted by miners for their activity has been halved for every 210,000 blocks created: during the first halving, in 2012, the reward for miners went from 50 to 25 bitcoins.

In 2016, the block issuance was only 12.5 bitcoins and since 2020, this reward is 6.25 bitcoins. It takes on average four years for a halving to occur, which is the current time interval to produce 210,000 blocks.

Which cryptos have a halving?


Halving is a mechanism found today on certain cryptocurrencies whose consensus lies in proof of work, i.e. those produced using mining.

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For example, Litecoin – often compared to the Bitcoin test network (BTC) or even to the silver metal among cryptos (like Bitcoin is with gold) – also has its halving.

It occurs every 840,000 blocks, also an interval of every four years (Litecoin blocks being faster to create). The last halving of Litecoin dates back to August 2023 and the next one will therefore take place during the summer of 2027.


On the other hand, Dogecoin – the most famous memecoin – ceased to have a halving in 2015: its community deciding that this mechanism was not necessary.


As for Monero, a cryptocurrency allowing anonymity, it also does not plan a halving but a gradual reduction in its issuance.

What about Ethereum?

Even when the Ethereum blockchain consensus was proof of work (until 2021), its code did not provide for halving. And there obviously still isn't one now that its consensus works on the proof-of-stake method.

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Why is the number of bitcoins in circulation limited?

A limitation of 21 million units

This limitation of the number of bitcoins to 21 million units was always planned by Satoshi Nakamoto, in his white paper as in the code of his invention.

In the cryptographers' mailing list, in which he introduced the concept of Bitcoin (BTC), he already wrote: “The total circulation will be 21,000,000 coins. It will be distributed by network nodes when they produce blocks, with the amount halved approximately every 4 years; 10.5 million pieces will be created in the first 4 years; 5.25 million for the next 4; 2.625 million for the next 4, 1.3125 million, etc….”

Minimize inflation linked to the production of new bitcoins

In his vision, this automatic reduction mechanism made it possible on the one hand to minimize inflation linked to the introduction of new bitcoins, while responding to new demand. A balancing act, which he commented on as follows:

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“The fact that new coins (bitcoins) are produced means that the quantity increases in a planned manner, but this does not necessarily result in inflation: if the quantity increases at the same rate as its number of users, its value will be stable. And if this quantity does not increase as quickly as demand, there will be deflation and its first owners will see its value increase.

The creation of Bitcoin (BTC) was justified by Satoshi Nakamoto by its desire to respond to the increase in the money supply, particularly notable during the subprime crisis of 2007/08.

Represent a store of value in the same way as gold

According to the computer scientist, it was responsible for inflation, guilty of the destruction of the assets of citizens. The planned limitation of the number of bitcoins is a mechanism allowing it to represent, in the eyes of its supporters, a store of value in the same way as gold.

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Why is halving important for minors?

It cuts their block reward in half

Halving is important for miners, because it directly affects their income: their reward per block will be reduced by half, and this market is very competitive.

To participate in the network, miners invest in expensive equipment (between a few hundred euros for the oldest machines and several thousand for the most competitive), spend on electricity to make it work and must also pay participation fees in pools (grouping of miners) which allow them to increase their chances of rewards.

On average, and according to the various information collected by Capital, the cost price of a bitcoin is estimated between 8,000 and 16,000 euros, depending on the location (and therefore the cost of electricity).

The reduction in emissions can produce a scarcity effect

As this halving implies for miners a halving of their rewards, this could lead to an equivalent drop in revenue, if the price of bitcoin does not rise. At the same time, these mining players hope that this reduction in the issuance of bitcoins will produce a scarcity effect.

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When is the next halving?

The next halving should occur on April 19, 2024. The next one will normally take place in 2028.

What to expect from the 2024 btc halving?

Bitcoin production cut in half

This 2024 halving will result in less issuance of bitcoins: while miners currently produce 900 per day on average, this production will be reduced by half, or around 450.

Interestingly, since their rollout in the United States in January 2024, spot Bitcoin ETFs have been responsible for purchasing 6,000 to 9,000 bitcoins per day on average.

The proliferation of this type of financial product around the world (Hong Kong has confirmed the authorization of products of the same type) could continue to produce demand well in excess of the supply produced post-halving.

The activation of a new protocol specific to bitcoin

Among the little-known consequences of this halving, it is also important to highlight the activation of a new protocol specific to bitcoin: this protocol was invented by the inventor of Ordinals (type of NFT issued on Bitcoin), Casey Rodarmor, and will allow the creation of fungible tokens on the Bitcoin blockchain.

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But unlike BRC-20, another fungible token protocol responsible for blockchain congestion, the Runes protocol has been optimized so that it less affects the fluidity of the chain.

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What were the impacts of previous halvings?

Previous halvings have always been followed by a decisive effect on the value of Bitcoin, each time causing it to exceed its previous record. However, these reactions were rarely immediate.

Halving of 2012

After a halving in 2012 (during which a bitcoin traded at around $12), Bitcoin reached a peak the following year, touching $1,150, before collapsing until 2015 to return to $200.

Halving of 2016

In July 2016, the value of a bitcoin was around 600 dollars at the time of the halving and we had to wait until February 2017 for it to return to its previous record (1150 dollars), which it would shatter over the following months in reaching $20,000 in December of the same year.

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Halving of 2020

In May 2020, while Bitcoin fell back to around $9,000 for its third halving, it exceeded its previous record in December of the same year and continued its rise until April 2021 to reach more than $63,000.

This year 2024 is the first in which Bitcoin reaches a new record (more than 70,000 dollars) even before the activation of the halving: the cryptocurrency is therefore entering unknown territory.

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