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Bitcoin mining rewards cut in half to curb inflation

By Shawn Knight
Jul 11, 2016
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  1. In the early days of Bitcoin, a miner could earn 50 BTC in exchange for processing blocks of the latest transactions. That figure was cut in half to 25 BTC in 2012 as part of a planned halving that would occur every four years in order to control the flow of new Bitcoins into the market and curb inflation.

    Now, four years later, Bitcoin mining rewards have been cut in half once again.

    As of July 9, Bitcoin’s mining reward was slashed to 12.5 BTC. How this will impact the volatile cryptocurrency market remains to be seen.

    Although no longer profitable for individuals, mining Bitcoins is still big business if you’ve got the right hardware. Early on, it was possible for individuals to mine Bitcoins using their desktop and notebook computers. Over time, as more people joined the mining community, the difficulty increased and mining only because feasible using high-end graphics cards.

    GPU mining was short-lived, however, as ASIC miners (application-specific integrated circuit) built specifically for Bitcoin mining went vogue. These days, most Bitcoin production is the result of investors with deep pockets that operate thousands of computers that mine 24/7/365.

    The halving of rewards is sure to take some miners by surprise and if their setups are no longer efficient (it costs more to mine than they make from rewards), they’ll no doubt drop out of the race. This, in turn, will leave efficient miners a bigger market share and help them cope with the profit hit.

    Image courtesy Lightboxx, Shutterstock

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  2. Kibaruk

    Kibaruk TechSpot Paladin Posts: 2,508   +501

    I'm sorry but to date all I read about bitcoins is that it's mined, expensive setups, scams and steals, bankruptcy and so on, but I've never read on where it all came from and how/why it became a currency. I know... a little to late but hey! can assure I'm not the only one.
     
    GreenNova343 and stewi0001 like this.
  3. RustyTech

    RustyTech TS Guru Posts: 865   +434

    Allow me to bring you up to speed...we know nothing... you are now up to speed! :p
     
  4. cliffordcooley

    cliffordcooley TS Guardian Fighter Posts: 8,555   +2,897

    Yeah they do this now that it has a slowed to a crawl with disgraceful stories in the history books. It's too late for PR moves now. They must have decided to cash in, so any changes wouldn't effect them personally.
     
  5. Puiu

    Puiu TS Evangelist Posts: 1,902   +528

    this is not a PR move and any miner with half a brain would know how to deal with the halving. it's all about making a profit and then exiting the mining market.
     
  6. Evernessince

    Evernessince TS Evangelist Posts: 1,179   +578

    I think people are misunderstanding something here, the halving of the coins per block was not a reaction to inflation or anything else. Bitcoin is programmed to automatically half the number of coins per block every couple of years until it eventually reaches 0. At that point the maximum number of bitcoins will have been mined.
     
  7. RustyTech

    RustyTech TS Guru Posts: 865   +434

    I'm no math wizard, but halving will never reach 0 ;)
     
  8. risc32

    risc32 TS Booster Posts: 197   +87

    sweet...
     
  9. R3DP3NGUIN

    R3DP3NGUIN TS Booster Posts: 147   +8

    Bitcoin is the future! pure and simple.
     

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