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The Bitcoin Halving is one of the most important features of the Bitcoin protocol. Approximately every four years (210,000 blocks), the amount of BTC that is rewarded for successfully mining a block is cut in half (not including transaction fees). The Bitcoin Halving cycle is a predictable, immutable method of fairly distributing new coins through a proof-of-work process.
Each Bitcoin Halving reduces by 50% the supply of new BTC coming into circulation. This supply-control mechanism, modeled in part on precious metals mining, makes Bitcoin increasingly scarce over time. Bitcoin’s rate of inflation will continue to decrease until it is 0% when all 21,000,000 BTC have been mined, which is projected to occur in the year 2140.
As a result of the basic principles of supply and demand, Bitcoin has historically experienced dramatic price volatility leading up to and following each previous Halving. The Halving is widely considered to be one of the most important factors affecting the price of Bitcoin, as illustrated by the chart below, and few believe that the 2024 Halving will be different.
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