The halving is a pivotal moment in Bitcoin's monetary policy every four years, having massive implications on the economic viability of individual mining operations, the overall market dynamics of the asset and, in general, the alcohol content of the block present in the blood of Bitcoiners.
Everyone celebrates the halving of each cycle as a moment when Bitcoin becomes a scarcer asset, an event where historically the price has skyrocketed in reaction to the change in the issuance schedule and everyone looks forward to it. History repeats itself.
I'm sure everyone is all too familiar with these dynamics, so today, as we all wait for block 840,000 to hit, let's look at some lesser known facts about supply timing and halvings of Bitcoin:
- The total supply of Bitcoin is not actually present anywhere in the codebase. The code simply specifies a starting reward of 50 BTC per block and modifies this value by reducing it by half.
- The total supply of Bitcoin is actually not 21 million coins. Due to how Bitcoin's code actually works, which is to simply cut the supply in half each time, there will only be 20999999.97690 BTC in circulation by the time the Coinbase subsidy drops to 0 satoshis.
- The supply, due to a quirk in the way the programming language (C++) that Bitcoin is written in, was not originally capped at all. In 2214, the entire supply would have started issuing again, resetting the block reward to 50 BTC per block and proceeding to issue an additional 21 million coins again. The BIP is written in a pleasant manner, but this has been corrected by PIF 42 in 2014.
- The halving supply curve in combination with total supply presents an interesting property. During the first 50 BTC Coinbase rewards subsidy period, 50% of the supply entered circulation. During the next 25 BTC reward halving period, 25% of the supply entered circulation. Each halving of the Coinbase reward value corresponds to the percentage of the total supply that enters circulation.
- During the first half, when the block reward dropped from 50 BTC per block to 25 BTC, a group of miners changed their Bitcoin clients and attempted to continue mining on a chain where the block subsidy remained at 50 BTC after the halving.
A lot of less technical people, or newer people, in this space probably weren't aware of most of these little facts. Interesting little tidbits about things tend to fade into historical memory and disappear. If we end up seeing a reorganization of this half from the Epic located in block 840,000, perhaps in 15-20 years most Bitcoin users won't remember or know either that such an event occurred in 2024.
If you are lucky enough to be here now to see these little moments in history, cherish the experience. These are unique things that you can come back to and probably use to annoy the people around you despite their lack of attention.
Happy halving everyone.