The halving of popular cryptocurrency Bitcoin is widely expected in April and the quadrennial event has lifted the crypto market in recent weeks.
The halving, which slows the rate of new bitcoins issued into the network, is a highly anticipated event in the digital asset space, particularly as Bitcoin is the most dominant cryptocurrency by market capitalisation.
Crypto exchange Coinbase says the halving is expected between April 16 and April 20.
The Straits Times looks at what halving is and its potential impact.
Q What is Bitcoin halving?
A Based on blockchain technology, Bitcoin has a protocol, or a set of digital rules, that is governed by different stakeholders, including developers, users and miners.
Miners solve complicated maths problems to verify transactions in the blockchain and this process adds new blocks to the Bitcoin network. The protocol dictates that each new block in the blockchain that is mined will introduce fresh bitcoins into circulation.
After the network mines 210,000 blocks, which takes about four years, the bitcoin reward given to miners for processing transactions is cut in half.
This is the halving mechanism that is written into the blockchain's protocol.
The halving will continue every four years until about 2140, when the maximum supply of 21 million bitcoins is reached.
This story is from the April 11, 2024 edition of The Straits Times.
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This story is from the April 11, 2024 edition of The Straits Times.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
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