The Bitcoin Halving: What Happens to Miners Every 4 Years?
Bitcoin has a strict monetary policy written in code. It cannot be changed by politicians or banks. The most famous rule is the Halving.
The Math
Every 210,000 blocks (roughly every 4 years), the block reward paid to miners is cut by 50%.
- 2009: 50 BTC
- 2012: 25 BTC
- 2016: 12.5 BTC
- 2020: 6.25 BTC
- 2024: 3.125 BTC
The Miner's Nightmare (Short Term)
Imagine your boss walks in today and says: "Starting tomorrow, your salary is cut by 50%." That is what the Halving feels like for miners. Suddenly, your electricity bill stays the same, but your income drops by half.
Inefficient miners go bankrupt immediately. This is the "culling" phase.
The Bull Run (Long Term)
However, history shows that the Halving is bullish. Why?
Supply Shock. The amount of new Bitcoin entering the market is cut in half. If demand stays the same, the price must go up.
Historically, the Bitcoin price increases significantly 6-12 months after a Halving, more than compensating for the drop in rewards.
Strategy: The smartest miners prepare for the Halving by upgrading to efficient hardware before it happens, ensuring they survive the initial shock to enjoy the bull run that follows.
