- April 24, 2020
- Posted by: James Hall
- Category: Posts
For the third time in its history, the bitcoin blockchain will experience a “halvening” which is expected to occur sometime in May 2020.
The bitcoin blockchain is encoded to cut the “block reward” for miners in half after every 210,000 blocks. Considering blocks take on average 10 minutes to process 1 block of transactions, on average a halvening occurs every 4 years. In effect, this also cuts in half the amount of new bitcoin put into circulation. These rewards are paid to miners in exchange for offering computing power in order to solve complex mathematical problems which are in place to make the bitcoin blockchain network trustworthy and secure.
Originally, the block rewards were 50 BTC per block. The first havening occurred November 28th, 2012, meaning that the reward became 25 BTC per block. The second havening came in July 09th, 2016, with block rewards set at 12.5 BTC. Now, the third halvening expected to happen next month will mean the new block reward is 6.25 BTC.
It is estimated that by 2140 the maximum number of bitcoin allowed by code to be in circulation, which is 21 million, will be met. At that point, miners will not receive new bitcoin but rather will be rewarded by an expected increase in transaction fees.
At the time of writing, the eta for the third halvening is May 12, 2020 at 08:37:13 UTC.