Bitcoin halving – when, where, why and how?

Although the scheduled event is still about 8 months away, the cryptocurrency community is already preparing for a halving of the value of bitcoins in 2024. It takes place every four years and is receiving a lot of attention, not only from cryptocurrency exchanges but also from companies and start-ups in the cryptocurrency sector.

“At Bintense, we want our customers to be well informed about what is happening in the industry, especially when it comes to a major event like the halving of bitcoins. That’s why we want to go deeper into the process so that you can understand what it means for you.

What does halving Bitcoin mean?

The halving of the value of bitcoins is an extraordinary event, as it happens about every four years. Imagine you have a bar of chocolate and every day you can only break it into smaller pieces to give to people.

But there is a trick: every four years, the number of parts you can divide it into halves. So if you started with 8 parts, after halving it, you will only be able to divide it into 4 parts, then 2 parts and so on.

This is similar to how Bitcoin works. It’s like a digital currency, and halving it makes it harder to create new bitcoins. This disadvantage is what makes Bitcoin special, because its supply is limited, just like gold. People get very excited about halving the quantity because it can affect the way people use it, especially when demand increases at a time when supply is decreasing.

Bitcoin halves by 2024

As for the specifics of the 2024 bitcoin halving, you should know that it will take place on 15 April. On that day, the reward per block will be halved from 6.25 to 3.125.

This is the 4th bitcoin halved since the creation of the blockchain. Although the exact time of day cannot be predicted (due to possible delays), the halving will occur on block 740 000.

We would also like to mention that semi-divisions occur every 210,000 blocks until a maximum supply of 21 million bitcoins is created in the network. This dynamic causes Bitcoin to deflate. Similarly to gold, it will be increasingly difficult for consumers wishing to purchase Bitcoin to find an adequate supply as the rewards are lower.

Benefits of halving

Splitting bitcoins in half brings several significant advantages to the cryptocurrency ecosystem. Firstly, it acts as an integrated mechanism to control the rate of issuance of new bitcoins, ensuring a controlled and predictable increase in supply. This controlled supply is crucial in creating a sense of rarity, similar to that of precious metals such as gold, which can foster users’ perception of value and trust.

Second, halving the size of events is a form of scheduled economic stimulation. We at Bintense believe that a reduction in the creation of new bitcoins may encourage users to keep their existing bitcoins. This in turn may contribute to the stability and resilience of the Bitcoin network by encouraging user participation and contribution to the decentralised ecosystem.