Cryptocurrencies such as Bitcoin (BTC), Litecoin (LTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), and Dash (DASH) implement a mechanism known as “halving” to control the rate at which new coins are introduced into the system.
This event is crucial as it affects the coin’s supply, miner’s profitability and has been influencing crypto price and scarcity.
Table of Contents
1. Bitcoin (BTC)
- Initial Token Supply: Capped at 21 million BTC.
- Initial Block Reward: Started at 50 BTC per block.
- Halving Interval: Occurs every 210,000 blocks, approximately every four years.
- Notable: The first cryptocurrency to implement halving. Since its inception in 2009, Bitcoin has undergone multiple halvings, with the latest one in 2020 reducing the block reward to 6.25 BTC.
2. Litecoin (LTC)
- Initial Token Supply: Capped at 84 million LTC, exactly four times the total supply of Bitcoin.
- Initial Block Reward: Began at 50 LTC per block.
- Halving Interval: Takes place every 840,000 blocks, roughly every four years, similar to Bitcoin’s timeline.
- About: Introduced in 2011 as a “lighter” version of Bitcoin, Litecoin’s halving process mirrors that of Bitcoin, aiming to reduce the block reward by half to control the supply of new coins into the ecosystem.
3. Bitcoin Cash (BCH)
- Initial Token Supply: Capped at 21 million BCH.
- Initial Block Reward: Started at 12.5 BCH per block following its split from Bitcoin in 2017.
- Halving Interval: Occurs every 210,000 blocks, approximately every four years, in line with Bitcoin’s schedule.
- About: Bitcoin Cash was created from a hard fork of Bitcoin in 2017. Its halving events follow the same protocol as Bitcoin, adjusting the block reward to manage inflation.
4. Bitcoin SV (BSV)
- Initial Token Supply: Capped at 21 million BSV.
- Initial Block Reward: Set at 12.5 BSV per block following its fork from Bitcoin Cash in 2018.
- Halving Interval: Matches the Bitcoin model, happening every 210,000 blocks, or roughly four years.
- About: Bitcoin SV, short for “Satoshi Vision,” emerged from a disagreement within the Bitcoin Cash community. It adheres to the same halving schedule as Bitcoin and Bitcoin Cash.
5. Dash (DASH)
- Initial Token Supply: Capped at 18.9 million DASH.
- Initial Block Reward: Varied due to its decreasing rate model.
- Halving Interval: Dash does not follow a strict halving schedule like Bitcoin; instead, it reduces the block reward by 7.14% every 210,240 blocks (approximately every 383 days).
- About: Though not a halving in the traditional sense, Dash’s method of gradually decreasing rewards aims to reduce inflation and increase scarcity over time.
Source: CoinMarketCap
What is Halving?
Bitcoin Halving is the event where the number of block rewards are reduced by half. This is done to decrease the dependency on newly minted coins for paying the transaction validators on Bitcoin (miners).
The event also seeks to reduce the market supply for Bitcoin and therefore helping to increase its value.
The Bitcoin halving event, occurring approximately every four years, significantly impacts the network, miners, and the broader market.
A notable trend observed is that following each halving event, there has been a significant increase in Bitcoin’s price, highlighting the potential long-term value appreciation triggered by these halvings.
