Halving Event

A halving event refers to the process where the reward for mining new blocks on a blockchain is reduced by half. This event typically occurs at regular intervals, such as every four years for Bitcoin, and it plays a key role in controlling the supply of new coins and curbing inflation.

How Halving Works

In cryptocurrencies like Bitcoin, miners are rewarded with newly minted coins for validating transactions. During a halving event, the number of coins rewarded to miners per block is halved. This reduces the rate at which new coins are introduced to the market, which can influence the asset’s price over time.

Importance of Halving

Halving events are important because they reduce the overall supply of a cryptocurrency, which may lead to price increases if demand remains steady or increases. The reduced rewards also make mining more competitive, often resulting in a more secure network.