For the Bitcoin (BTC -0.67%) novice, the beatdown that has been 2022 serves as a humbling reminder that the digital coin’s price can fall just as fast as it rose.
But what if I told you Bitcoin is doing exactly what it has done in the past? Essentially, we are right on schedule. Even better, what if I told you that the next few months might be one of the best times to buy Bitcoin? To give you a better understanding of why I believe this, we need to examine one of Bitcoin’s unique characteristics that sets it apart from most other cryptocurrencies.
Roughly every four years, or after 210,000 blocks have been mined, the Bitcoin block reward is cut in half in an event known as halving. When Bitcoin miners successfully mine a block, they are rewarded with a specified amount of Bitcoin. This is the primary mechanism for new bitcoins to be created but the process also slows the growth in supply of new coins.
Bitcoin miners now are rewarded with 6.125 bitcoins for creating a new block. Before the last halving in May 2020, the reward was 12.5 bitcoins. And 210,000 blocks before that, it was 25; and another 210,000 blocks before that, the reward was a whopping 50 bitcoins.
Aside from other characteristics like its elite level of security and decentralization, halvings are one of the most essential traits of Bitcoin.