Bitcoin, the world’s first decentralized cryptocurrency, operates on a deflationary model dictated by a process called ‘halving’. The halving occurs approximately every four years, reducing the reward miners receive for validating transactions and adding new blocks to the blockchain. Currently, there are 19,573,975 Bitcoins in existence. The total amount of Bitcoin that can be awarded is 1,426,025 out of a maximum of 21 million. The Bitcoin halving is a significant event as it influences the whole crypto space. The altcoin prices also surge with Bitcoin. But what happens after the 32nd halving, when the last Bitcoin is mined and the block rewards disappear? Let’s look into that.
What is Bitcoin Halving?
Bitcoin’s protocol includes a unique feature called ‘halving,’ in which the reward for mining Bitcoin decreases by half every four years to limit the increase in its circulation. The Bitcoin halving event decreases the amount of new Bitcoin introduced through the Bitcoin minders validating the network.
In the Bitcoin network, miners validate the transaction details by utilizing a proof-of-work (PoW). Miners will compete with each other to solve a block’s cryptographic puzzle, by utilizing a significant amount of computational power. Once a miner successfully solves a puzzle, they will add a new block of transactions to the blockchain. As a part of their effort to validate transactions, they will be rewarded with a certain amount of coins.
Miners received 50 BTC for each block they mined when Bitcoin was initially introduced in 2009. Every time the network mines 210,000 blocks, which takes roughly four years, the block reward is halved by 50%. The halving guarantees the regulated distribution of new Bitcoins until all are in circulation because the system is geared to have a limited amount of 21 million BTC.
How Many Bitcoin Halvings Are Left?
The last halving, which is expected to occur around 2140, is the 32nd in total. In 2012. When Bitcoin was first halved, the block reward dropped from fifty to twenty-five bitcoins. This was followed by lowering the reward to 12.5 and then 6.25 BTC in 2016 and 2020, respectively. There are still 29 halvings to go, and the next one is anticipated to occur over the next several days.
Since the timing of the upcoming halving depends on those 210,000 blocks being mined, it is difficult to predict with accuracy. However, the reward will drop to 3.125 BTC per block when it happens, which is anticipated to happen in mid-April. In 2023, 2032, and so on, until the last Bitcoin is mined, this will be followed by another halving after the four-year interval. By then, the only money miners will receive is from the fees network users pay to validate transactions. These rewards are going to encourage miners to keep up the network.
Does the Bitcoin Halving Increase Price?
Bitcoin halving plays an important role in controlling its supply and inflation rate. The inflation rate slows down after each Bitcoin halving as the supply increases.
Bitcoin halving history
| New BTC per block before halving | New BTC per block after halving | Price on Halving Day | Price 150 days later | |
| 2012 Halving | 50 BTC | 25 BTC | $12.35 | $127.00 |
| 2016 Halving | 25 BTC | 12.5 BTC | $650.53 | $758.81 |
| 2020 Halving | 12.5 BTC | 6.25 BTC | $8821.42 | $10,943.00 |
How will the Halving Impact Bitcoin Miners?
Miners may become less profitable when block rewards decline, particularly those with less effective energy expenses. The network hash rate may momentarily drop as a result of some being compelled to stop activities. However, the Bitcoin network is also built to thwart these possible outcomes. To maintain a steady block production rate of about 10 minutes per block, the mining difficulty changes every 2016 block or roughly every two weeks. This technique guarantees that blocks are regularly mined, preserving network stability and the sustainability of the Bitcoin ecosystem even in the face of fluctuating miner involvement.
While the historical data shows a connection between halvings and Bitcoin’s price, there is no guarantee that the prediction of the outcomes of future halving will be accurate. It is crucial to conduct thorough research and approach halving events more cautiously.
What Happens to Bitcoin After All 32 Halvings Are Complete?
No more Bitcoins will be issued after all 32 halvings are complete, even if it turns out to be just under 21 million. Miners will probably be impacted when Bitcoin reaches its upper supply limit, but how they are impacted will depend in part on how Bitcoin develops as a cryptocurrency. Bitcoin miners will still receive compensation, most likely in the form of transaction processing fees, and transactions will still be pooled into blocks and processed.
Also Read: Polkadot Price Forecast 2024-2040: A Guide
Conclusion
As we approach the completion of all 32 Bitcoin halvings, expected around 2140, the cryptocurrency will enter a new phase defined by scarcity and reliance on transaction fees for miner compensation. This transition will fundamentally reshape the Bitcoin ecosystem, influencing market dynamics, miner behavior, and the overall sustainability of the network. Bitcoin post-halving us uncertain but filled with potential as it continues to challenge traditional financial systems and redefine concepts of value in the digital age.