## Supply Reduction Mechanism: How BTC Halving Works

Bitcoin halving is a protocol-scheduled mechanism that occurs every 210,000 blocks ( approximately every four years ) and halves the reward for confirming transactions on the network. This process is a key component of the macroeconomic model of Bitcoin, ensuring a controlled introduction of new coins into the market.

## History and Chronology of Reward Reduction

Since the launch of the Bitcoin network, there have already been three rounds of this event:

- **2012 year** — the first reduction of rewards, the reward size decreased from 50 BTC to 25 BTC per block
- **2016 year** — the second cycle led to a reduction to 12.5 BTC
- **2020 year** — the third round set the current level at 6.25 BTC

Each such cycle gradually brings the network closer to the maximum supply of 21 million BTC.

## What to Expect in April 2024

The next halving will occur at block height 840,000, which is expected to happen in April 2024. After this point, the block reward will drop to 3.125 BTC. According to current estimates, by that time over 90% of all bitcoins that will ever be created will have already been mined.

## Long-term perspective: the end of BTC inflation

The 32nd halving will be the final event in the history of Bitcoin. After it occurs, no new Bitcoins will be generated at all. According to estimates, the full limit of 21 million units will be reached around the year 2140. Thus, the halving serves as a tool for controlling inflation and guarantees the absolute scarcity of the digital asset.

## Impact on Your Portfolio

The halving will not change the number of bitcoins you own — your balance will remain unchanged. However, this event may indirectly influence the market price of BTC, as the decrease in the supply of new coins is traditionally seen by the market as a factor that could potentially support price potential. This is why miners, traders, and investors pay special attention to each such moment and closely monitor the countdown to the event.

## Why Halving Matters

This mechanism is a fundamental part of the tokenomics of Bitcoin. It provides a predictable issuance schedule and ensures that the supply of Bitcoin will never exceed the established limit. This design contrasts with traditional currencies, which can be printed in unlimited quantities, and is one of the reasons why cryptocurrency advocates perceive BTC as a hedge against inflation.