Feb 15th 2023

A lot is being speculated about the price and market consequences of the imminent Bitcoin Halving. Would it affect mining efficiency, network fundamentals, activity and models too?

It’s like an eclipse. It occurs every few years and shakes up the way things align. Shadows are cast, lifted and even though everyone is back to their orbits, as usual, something of that usualness tumbles about in the next world-order.

And it’s not a new phenomenon. The way Satoshi designed it, ensures that a Bitcoin miner’s reward is halved every 210,000 blocks. It has happened in 2012 and 2016. This ‘halving’ is expected again in May 2020 – this time, presumably, from 12.5 to 6.25 Bitcoins (BTC) for every block added to the blockchain.


It has been noted that miner revenue gets a big setback with every halving (as much as 50 per cent as reckoned in some estimates). This matters a lot when block rewards can constitute above 90 per cent of mining revenues.


Miners, after all, are the ones who compete to create a cryptographic signature which proves the validity of the transaction and they are the ones who commit it to history on the blockchain. Being rewarded for the work of creating the signature gives them a fixed quantity of Bitcoin. It is this amount that halves approximately every four years.