Bitcoin halving marks 12th anniversary: ​​how has the mining system changed?

Author: Helen Partz, CoinTelegraph; Compiler: Wuzhu, Golden Finance

Bitcoin, the largest cryptocurrency by market capitalization, experienced its first halving event 12 years ago, reducing the block reward from 50 BTC to 25 BTC.

Since then, the Bitcoin block reward - the incentive for crypto miners to verify Bitcoin transactions and protect the network - has shrunk to 3.125 BTC after three halvings, greatly limiting the supply of newly mined BTC entering the market.

The 12th anniversary of Bitcoin's halving comes as Bitcoin is trading near its all-time high of around $99,600 set on November 22, partly due to Bitcoin's fourth halving event in April.

Bitcoin halving date and block rewards. Source: BitDegree

As the community celebrates the anniversary of the first Bitcoin halving, this article revisits some of BTC’s key historical milestones and changes in the mining ecosystem.

1.2 million bitcoins left to be mined

As of November 27, there are 19.8 million BTC in circulation, with 1.2 million remaining to be mined until the limited supply of 21 million is reached.

Bitcoin's supply is capped at 21 million, which is one of the basic principles of the Bitcoin network, designed to provide asset scarcity.

Total amount of Bitcoin in circulation. Source: Blockchain.com

Although the amount of 1.2 million BTC is small relative to the amount of Bitcoin that has been mined, the mining process of the remaining BTC will require miners to spend more time and energy due to the reduction in rewards and the increase in mining difficulty.

According to MinerStat, the Bitcoin mining difficulty rate is currently at 102.3 trillion, having crossed the 100 trillion mark for the first time on November 5. The next Bitcoin difficulty adjustment is expected to take place on December 2.

Bitcoin Miners Are Far From Surrendering, Bitcoin Sets New Price Records

Despite the challenges presented by the higher Bitcoin mining difficulty and lower block rewards, Bitcoin miners are far from surrendering, thanks to the continued rise in the cryptocurrency market.

According to CoinGecko, as of this writing, Bitcoin is trading at $95,364, up 154% over the past year. The cryptocurrency has also seen a significant increase in price since Bitcoin’s most recent halving event on April 20, 2024, increasing its value by approximately 45%.

According to a report from European cryptocurrency investment firm CoinShares,Despite the rising dollar-denominated block rewards that Bitcoin is expected to see in 2024, Bitcoin miners have been taking steps to reduce costs and adopt artificial intelligence.

“The Bitcoin mining industry has faced significant challenges this year, with both revenue and hash prices falling,” CoinShares said in an October mining report.

In July, when BTC was trading at around $56,500, Bitcoin mining company TeraWulf considered consolidation due to low profit margins.

Some major cryptocurrency mining companies such as Marathon Digital sold a large amount of mined BTC after the fourth halving this year, citing the need to improve efficiency and remain competitive.

Marathon has also turned to actively buying Bitcoin, announcing a $250 million convertible senior notes offering in August.

El Salvador, on the other hand, has stepped up efforts to find alternative Bitcoin mining methods that harness geothermal volcanic energy.