Glossary

Halving

Plain-language definition Crypto glossary

Key takeaways

A halving is a scheduled event that cuts a proof-of-work network's block reward in half, reducing the rate at which new coins are created.
After a fixed number of blocks have been mined, the reward paid to miners drops by 50% automatically, and over many halvings the new-supply rate trends toward zero, approaching a fixed maximum supply.
Halvings make a coin's issuance transparent and disinflationary by design, and they gradually shift miners' revenue away from block rewards toward transaction fees.

Definition

A halving is a scheduled event that cuts a proof-of-work network’s block reward in half, reducing the rate at which new coins are created. It is built into the protocol to enforce a predictable, decreasing supply schedule.

How it works

The network counts blocks, and after a fixed number have been mined the reward paid to miners drops by 50%. This happens automatically and cannot be changed without broad agreement to alter the protocol. Over many halvings the new-supply rate trends toward zero, which is how a network with a fixed maximum supply approaches that cap.

Why it matters

Halvings make a coin’s issuance transparent and disinflationary by design, a contrast with currencies whose supply can be expanded at will. They also reduce miners’ block-reward income over time, gradually shifting their revenue toward transaction fees.

Example

Bitcoin halves its block reward roughly every four years, stepping its issuance down on the way to a 21 million coin cap.

FAQ

Frequently asked questions

Why do halvings happen?

Halvings are built into a proof-of-work protocol to enforce a predictable, decreasing supply schedule. By cutting the block reward in half after a set number of blocks, the network steadily reduces how fast new coins are created and approaches its fixed maximum supply.

How does a halving affect miners?

Each halving cuts the block-reward income miners earn for adding new blocks. Over time this gradually shifts miners' revenue away from block rewards and toward the transaction fees users pay.

What does disinflationary mean for a coin with halvings?

Disinflationary means the rate at which new coins are issued slows down over time, even though some new supply is still created. This contrasts with currencies whose supply can be expanded at will, and it is how a capped network approaches its maximum supply.