Here's a very simple, layman explanation of what Bitcoin Halving is all about
Imagine Bitcoin as a giant treasure chest filled with 21 million gold coins (the total supply). Bitcoin miners are like treasure hunters who compete to solve puzzles and unlock new blocks of coins. Initially, they receive a reward of 50 gold coins per block.
A halving event is like a pre-programmed rule that cuts the miners' reward in half, every four years or so. So, after the first halving, they'd only get 25 coins per block, and the reward keeps getting smaller with each halving.
This halving is essential for two reasons:
* Controls Supply: It prevents the treasure chest from overflowing with new coins, mimicking real-world limited resources like gold.
* Incentivizes Miners: Even with a reduced reward, miners are still motivated to keep the Bitcoin network secure because they also earn transaction fees.
The impact of halving on Bitcoin's price is debatable, but some believe it can drive prices up due to the decreasing supply of new coins.
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