Block Reward Halving: A Guide
Recently, in the media surrounding Bitcoin, you may have heard about an event called the “block reward halving” that will soon be taking place in the Bitcoin network. Projected to take place on Wednesday at around 18:00 UTC, for the first time ever in Bitcoin history, the rate at which new bitcoins are generated will permanently be cut by a factor of two, and people all over the Bitcoin community are debating what the economic consequences are going to be. Opinions range from those who believe that Bitcoin will enter a period of extreme financial instability as it is caught off guard by the sudden shock in supply to those who believe that the markets will simply hum along as if nothing had happened at all. What this article will do is explain exactly what the block reward halving is, the economic issue that is at the core of the debate, and some of the more subtle effects that could arise from this in the medium to long term.