Bitcoin Mining Block Reward (Halving)

Bitcoin Mining Block Reward (Halving)

Bitcoin has a unique mining block reward strategy. Each time a miner successfully solves Bitcoin’s proof of work algorithm, he is rewarded a set amount of bitcoins agreed upon by the network. The bitcoins included in the block reward are all new bitcoins. This is the only way that new bitcoins are created. At present Bitcoin reward is 12.5 BTC per block.

When Bitcoin was created, Satoshi Nakamoto (creator of Bitcoin) set some rules that can't be changed without unanimous agreement throughout the bitcoin network.

“Total circulation will be 21,000,000 coins. It'll be distributed to network nodes when they make blocks, with the amount cut in half every 4 years.

first 4 years: 10,500,000 coins
next 4 years: 5,250,000 coins
next 4 years: 2,625,000 coins
next 4 years: 1,312,500 coins
etc... “ - Satoshi Nakamoto


Fig: Graph Bitcoin, Year, blocks,

The block reward started with 50 BTC in block #1 (Block – Genesis) and remained till (10,50,000 / 50 ) 210,000th block. It means who so ever mined Bitcoin till 210,000th block, each got the reward of 50 BTC every time. From block # 210,001 the reward reduced to 25 BTC every time a block is created.
Avg. Block time in Bitcoin = 10min
So, total blocks created in a day = (24*60) / 10 blocks = 144 blocks


Based on the above calculation, next time halving of the Bitcoin reward will happen in 2020. This process of making the block reward half about every four years is also known as 'Bitcoin Reward Halving'.

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blockchain #halving #bitcoin #etherworld #mining #blockreward

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