Block 840,000: Bitcoin Halving Day
While the mighty dollar can be printed whenever the US needs more money — Bitcoin is finite. Overall, Satoshi Nakamoto created Bitcoin so that there is only 21 million bitcoins (BTC), and all of these will minted by 2140. This is achieved by providing a supply of Bitcoin into the market but holding some back. The new coins are then minted as a reward to miners, and thus we increase the number of bitcoins in the market for the creation of a new block. This happens around every 10 minutes. Thus if a bitcoin is worth 6.25 BTC, then there would be around 900 new bitcoins produced per day.
For mining, the process is competitive, and where there is a strong incentive for miners to build a block. This is done by setting them a puzzle to find a nonce value for the current block, which creates an overall hash value with a number of preceding zero values. For Block 839,999 [here], we get a hash of:
0000000000000000000172014ba58d66455762add0512355ad651207918494ab
The nonce value used to create this is 3,205,594,798, and was found by SBI Crypto.
Halving Day
And, so it happened. On 20 April 2024 at 1:09, Bitcoin block 840,000 was created, and which halved the reward given to miners:
This reduced the reward given to miners for finding the nonce value for a block from 6.25 to 3.125.
Satoshi decided that the supply of Bitcoins was finite, and when they were all produced, there would be no more created. This type of approach goes against the fiat currency approach of continually printing new money, and is the way that central banks control their economy. When they release more money into the market it typically increases spending, grows the economy and inflates prices. When money is taken out of the economy, it typically has the opposite effect.
Overall we create a new block for Bitcoin every 10 minutes, and new Bitcoins are added into the market through a reward for mining a block of transactions. Initially this was 50 Bitcoins, but every four years this reward is halved. So in 2012, the reward dropped to 25 bitcoins, and then in 2016, it halved to 12.5. In 2020, it then dropped to 6.25 bitcoins, and today it dropped to 3.125 bitcoins.
The actual date and time of the halving relates to the block number, and where it occurs ever 210,000 blocks. Overall, the next halving will occur in 2028 for block number 840,000
As supply and demand often shows, when the supply of something becomes more restricted, the demand and price can often go higher. This is certainly the case at the current time, and where Bitcoin has seen rapid growth over the past year or so. As we see from this chart, the value of Bitcoin often increases after a halving event:
To show the halving, here is block number 739,999:
Conclusions
I have no cryptocurrency, and I am only interested in the cryptography used with blockchain.
We all need storages of wealth and place our hard-earned money in places that do not depreciate. While fiat currency can be tampered with by central banks, the control of cryptocurrency is purely controlled by global demand, and no country in the world can influence its price.
