How much does it cost to secure bitcoin and who should pay for it? Because that’s what this week’s much-discussed ‘halving’ event this week for the biggest cryptocurrency is really about.
For those fortunate enough to be unaware, at some point probably on Friday, the total of bitcoins that miners receive for securing the network and validating new transactions will be halved, from a share of 900 a day to just 450. This happens every four years and it’s an important foundational principle for bitcoin.
Its pseudonymous creator Satoshi Nakamoto envisaged bitcoin in part as a hedge against inflation and decreed there would be just 21mn coins in existence. To ensure its scarcity, Nakamoto also decided that the amount of coins distributed by the bitcoin protocol would halve every four years. Why 21mn and why every four years is a mystery. No matter — the fourth halving is upon us.