Halving

A halving is a scheduled event that cuts a proof-of-work network’s block reward in half, reducing the rate at which new coins are created. It is built into the protocol to enforce a predictable, decreasing supply schedule.

How it works

The network counts blocks, and after a fixed number have been mined the reward paid to miners drops by 50%. This happens automatically and cannot be changed without broad agreement to alter the protocol. Over many halvings the new-supply rate trends toward zero, which is how a network with a fixed maximum supply approaches that cap.

Why it matters

Halvings make a coin’s issuance transparent and disinflationary by design, a contrast with currencies whose supply can be expanded at will. They also reduce miners’ block-reward income over time, gradually shifting their revenue toward transaction fees.

Example

Bitcoin halves its block reward roughly every four years, stepping its issuance down on the way to a 21 million coin cap.