What is the halving event?
One of the features built into the Bitcoin protocol helps manage a more orderly supply of the cryptocurrency and, in so doing, provide some protection to its value over time. Being an open blockchain, transactions are added to the chain in blocks through a process known as mining. Miners are incentivised to solve complex mathematical problems with the successful miner earning coins for their work. The “reward rate” is systematically halved after every 210,000 blocks have been mined.
The current rate is 6.25 Bitcoin rewarded per block, which will soon be cut in half to 3.125 Bitcoin. Such halving events occur roughly every four years and will continue until probably 2040, when the entire 21 million Bitcoin has been issued. With this month’s being the fourth such event, can anything be learned from the three previous events to help today’s Bitcoin investors?