A Look Back at Bitcoin Halving

5 min readApr 24, 2024

In April 2024, the block reward was reduced from 6.25 Bitcoin per block to 3.125 Bitcoin per block.

Look Back at Bitcoin Halving

What is Bitcoin halving?

Bitcoin halving is a programmed event that occurs approximately every four years, reducing the reward given to cryptocurrency miners by half. The purpose of halving is to maintain the supply of Bitcoin and prevent inflation. By decreasing mining rewards, halving is expected to stimulate an increase in Bitcoin demand, leading to a surge in its value. This event takes place every 210,000 blocks or roughly every four years. The most recent halving took place in May 2020, reducing the reward from 12.5 to 6.25 BTC per block. Bitcoin halving significantly contributes to the long-term sustainability and scarcity of Bitcoin. The halving event occurs regularly, reducing Bitcoin’s inflation rate and maintaining its economic framework.

Historical Overview

The First Slice: Nov 28th, 2012. BTC Price: $12.20

During the first halving event, the mining reward for Bitcoin was reduced by 50%, going from 50 to 25 Bitcoins per block. At that time, the market had not fully accounted for the consequences of the halving. The community closely observed the situation, with the closing price on the halving day recorded at $12.20. In the months following the 2012 halving, the network experienced a decline in hash rate and difficulty as less profitable miners opted to shut down their machines in order to minimize expenses.However, in early 2013, Bitcoin initiated its first significant bull run, witnessing a remarkable surge from $13 to over $1,000 by the end of the year. The concerns regarding miners capitulating turned out to be largely unfounded. The network continued to operate smoothly, and the Bitcoin community learned an important lesson: Halvings have a positive impact on the Bitcoin network and the price of Bitcoin, contributing to its bullish nature.

Bracing for a Boom: July 9th, 2016. BTC Price: $640.56

The second halving event resulted in a further 50% reduction of the block reward, decreasing it from 25 to 12.5 BTC. The community, with the memory of the 2012 halving still fresh, anticipated another period of significant price growth. Many predicted a surge in prices, leading to a potential price boom. However, there were also concerns raised about the impact of a smaller mining reward on mining profits and the overall health of the network. What followed next is well-known…

In 2017, Bitcoin experienced an extraordinary bull run, capturing global attention as its price soared to nearly $20,000 by the end of the year. This marked the first time that cryptocurrencies were in the global spotlight, attracting widespread interest. This event set the stage for an even more substantial bull run that would occur four years later.

One Million More: May 11th, 2020. BTC Price: $8,605

The third halving event unfolded as expected, once again cutting the mining reward in half. With the reward reduced to 6.25 BTC per block, Bitcoin prepared itself for another significant surge. Speculation ran rampant, focusing on the increasing institutional adoption of Bitcoin and its potential as a hedge against inflation.

Following the halving, the price of Bitcoin experienced another remarkable rally. This time, the community was prepared, having learned from previous halvings. Halving day was eagerly awaited, but the true celebrations commenced during the incredible bull run witnessed in 2021.

2024 Halving

2024 Halving reduced the mining reward again to 3.125 BTC per block.

Why Halving?

Bitcoin’s built-in halvings distinguish it as a distinctive feature that provides predictable control over the issuance of its supply. While other cryptocurrencies have attempted to replicate this model, no other blockchain has achieved the same level of success with halvings and inflation reductions as Bitcoin. The halving mechanism has proven to be a unique and effective method for managing the supply and maintaining the scarcity of Bitcoin, contributing to its enduring popularity and value.

Indeed, there have been critics who have questioned the necessity of halvings, suggesting that Bitcoin’s supply could have been capped at 21 million with all units released immediately. However, Satoshi Nakamoto, the creator of Bitcoin, demonstrated wisdom in recognizing the significance of gradual, rule-based issuance and its impact on fostering adoption and fairness within the ecosystem. Halvings have played a crucial role in Bitcoin’s journey and current status. Bitcoin would not be where it is today without halvings.

Halvings serve as a unifying force, connecting different generations of Bitcoin users. Those who were part of the first halving in 2012 have witnessed the remarkable growth of the community and the achievement of significant milestones along the way. On the other hand, those who joined the Bitcoin ecosystem after the 2020 halving look to earlier halvings to gain a deeper understanding of Bitcoin’s origins and historical context. Halvings act as a reminder for the entire community, highlighting the progress made and the journey that still lies ahead.

Effects on the Dynamics of Supply and Demand

Bitcoin halving events result in a reduction of the production rate, effectively decreasing the available supply of Bitcoin. This limited supply, alongside a growing demand, often results in an upward price movement for Bitcoin. With its intentional cap of 21 million coins, Bitcoin’s value is determined by the interplay of supply and demand. Consequently, the halving process plays a crucial role in shaping Bitcoin’s economic structure and its perception in the broader market.

Sustainability of Mining

• Energy consumption concerns: Bitcoin mining has been criticized for its high energy usage, but the industry is becoming increasingly conscious of this issue. Efforts are being made to explore and implement more energy-efficient practices.

• Eco-friendly solutions: Innovations such as flare gas mining, which utilizes waste gas from oil extraction, and the potential use of nuclear energy offer environmentally-friendly alternatives to power mining operations. These solutions aim to minimize the carbon footprint associated with Bitcoin mining.

• Renewable energy adoption: The adoption of renewable energy sources like solar, wind, and hydropower is gaining traction in the Bitcoin mining industry. By harnessing clean energy, miners aim to reduce reliance on fossil fuels and promote sustainability.

• Future projections: The development of energy-efficient mining hardware and the continued advancement of eco-friendly mining solutions are expected to progress in line with global sustainability goals. The industry is likely to evolve to address energy concerns and align with environmental objectives.

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