Halving is a pre-scheduled event in a blockchain where the reward for mining new blocks is halved. This effectively decreases the rate at which new tokens are generated, introducing a deflationary mechanism into the system.
"Bitcoin undergoes a halving event approximately every four years, reducing the block reward and slowing the rate of new Bitcoin creation."
Halving events are significant in the cryptocurrency market as they reduce the supply of new coins, which can lead to increased scarcity and potentially higher prices if demand remains strong. They also serve as a measure to ensure the longevity of the cryptocurrency by controlling inflation.
"Historically, Bitcoin's price has seen significant increases in the months following a halving event."
The timing of a halving event is determined by block height, not by a standard calendar date. For example, Bitcoin's halving occurs every 210,000 blocks, which is approximately every four years.
"The last Bitcoin halving occurred at block 630,000 in May 2020, reducing the block reward from 12.5 to 6.25 Bitcoins."
* All terms and definitions may update as the Cryptionary improves.