What is “halving”? Why is it necessary? 2024 bitcoin halving

Today is a unique day, just today the Bitcoin halving occurs, one of the most important moments in the cryptocurrency space that happens every four years.

And this Bitcoin halving is unlike any in history because starting today, Bitcoin’s annual inflation rate is officially more scarce than gold. Bitcoin halving refers to the halving of the supply, that is, the new increment of Bitcoin is reduced by half. But this does not mean that the total number of Bitcoins will be halved. The total number of Bitcoins will always be only 21 million, which is one of its basic selling points.

Bitcoin’s scarcity is similar to gold, although we don’t know exactly how much gold is in the ground, gold is scarce, which is one of the reasons it’s valuable. Bitcoin is mathematically scarce, it is made of code, it is open and transparent, and anyone can view it. Bitcoin halving means the supply is cut in half. The current annual inflation rate of Bitcoin is about 1.7%, and the inflation rate of gold is usually between 1% and 2%. It can be said that Bitcoin’s annual inflation rate over the past four years has been comparable to gold.

But starting today, everything will change, and Bitcoin’s inflation rate will drop from 1.7% to less than 1%, 85% to be precise. We've never seen any asset more scarce than gold, and that's definitely something you and I can tell our grandchildren about.

For those who hold Bitcoin, this will impact you in the short term, as the reason people care about the halving is the basic economics law of supply and demand. If the demand for any asset remains the same, or even does not increase, and the supply is cut in half, the price will rise.