Halving

The halving is an event written into Bitcoin's code since its creation. Every 210,000 blocks, the subsidy paid to the miner who finds a block is cut in half. With one block roughly every 10 minutes, that works out to about one halving every four years. The reward has thus gone from 50 BTC at the start to 25, then 12.5, then 6.25, and finally 3.125 BTC since April 2024.

This mechanism slows down the creation of bitcoins and guarantees that their total number will never exceed 21 million. For miners, the effect is immediate: overnight, the same machine produces half as many newly created bitcoins for the same power consumption. Only transaction fees are unaffected. Other coins, such as Litecoin, also have their own halving schedule.

A halving weeds out the machine fleet. The least efficient models, whose electricity cost exceeds what they bring in, are often switched off, which can bring the difficulty down for a while. If you are buying a machine, look at its efficiency in J/TH and ask yourself how worthwhile it will be after the next halving, expected around 2028, and not just today.

In our Bitcoin collection, compare the efficiency of the machines to plan ahead for these milestones.