Summary
TLDR: The next Bitcoin halving event will reduce miner rewards, impacting profitability. The event occurs every 4 years and is expected in April 2024. Some believe it may decrease mining incentives, but others see potential for new revenue streams and increased Bitcoin value post-halving.
Key Points
1. The bitcoin network operates on a decentralized ledger known as a blockchain, which is run by a network of computer nodes. These nodes are designed in a way that records and verifies the validity of each transaction on the network.
2. There have been three previous halving events. The first occurred on Nov. 28, 2012, when bitcoin rewards went from 50 bitcoins to 25 bitcoins. The second happened in July 2016, when rewards went from 25 bitcoins to 12.5 bitcoins. The most recent bitcoin halving event occurred in May 2020, when 12.5 bitcoin rewards were reduced to 6.25.
3. Some argue that the fewer the rewards, the fewer incentives there may be for bitcoin miners to continue their operations. However, DeFi solutions on bitcoin’s layer-2 networks and the potential for an increase in bitcoin’s value post-halving could offset these reduced rewards, maintaining mining’s appeal despite the challenges.