BITCOIN HALVING

After every 210,000 blocks, Bitcoin goes through a process called “halving.” This mechanism was integrated into the protocol by Satoshi Nakamoto himself. After a protocol goes through “halving,” it cuts the supply of new Bitcoins in half, halving the miner’s block production rewards, as well.

What is the Bitcoin Halving?
Specifically, the Bitcoin protocol cuts the bitcoin block reward in half. Every time a Bitcoin halving occurs, miners begin receiving 50% fewer BTC for verifying transactions.

Bitcoin – The 21 million upper cap
As you already know, Bitcoin has a 21 million upper cap. In other words, there will only be 21 million Bitcoins that will ever exist. So, why does Bitcoin have an upper cap in the first place? Ripple CTO David Schwartz says that there are three reasons:

Fiat currency is extremely inflationary in nature. The Federal Reserve controls the US Dollar. Any time they want to regulate the supply, they can simply inject more cash into the system. Many people see this as a highly unethical practice. This is why Nakamoto hard-coded an upper cap to make sure that nobody can randomly inflate Bitcoin’s supply as they see fit.
When Bitcoin was first designed, it wasn’t clear whether it would be adopted in the first place or not. By fixing the supply, prospective investors were incentivized to acquire Bitcoins before it runs out.
Finally, some way was needed to distribute the currency. Miners will initially use their computational power to distribute Bitcoin. After all the coins have been mined, transaction fees could take over to secure Bitcoin’s tokenomics.
Bitcoin – Understanding mining and deflation
Having a 21 million cap ensures that Bitcoin is a deflationary asset, as opposed to an inflationary one. At the very core of Bitcoin lies the concept of mining. We are pretty sure that you must have heard the term and may even be familiar with what it means in the context of Bitcoin.

For those who don’t know, mining is a process with which certain nodes, called “miners,” use specialized mining equipment to solve cryptographically hard puzzles.