What is a Bitcoin halving?

What is a Bitcoin halving?

Definition

Every four years, the amount of bitcoin awarded to miners is reduced by half, until all 21 million bitcoin have been virtually mined (probably around the year 2140). The halving mechanism helps make bitcoin a scarce, inflation-resistant resource. 

Even though Bitcoin is digital money, it can’t be created endlessly. Verifiable scarcity is core to its value proposition. Foundational to the Bitcoin protocol are two concepts relating to scarcity. First, there will only ever be 21 million bitcoin. (As of late 2020 there were less than 2.5 million bitcoin remaining to be virtually “mined.”) Second, the amount of new bitcoin added to the network will be reduced by half every four years. This second concept is referred to as the halving. 

At the beginning of 2020, 12.5 new bitcoin were added to the network every 10 minutes via virtual “mining.” In May, that amount was halved, to 6.25. In 2024, it will drop to around 3.125 — and the process will continue until all 21 million coins have been mined  (which estimates say should happen around the year 2140).