Bitcoin completes its second halving as the block reward drops to 12.5 coins

Bitcoin's second halving took place on Saturday, reducing the reward for mining a new block from 25 to 12.5 bitcoin. The change is written into the protocol and happens roughly every four years, or every 210,000 blocks.

The event matters mainly for miners. Their revenue per block has been cut in half overnight, and operations with high electricity costs or older hardware may find it harder to stay profitable unless the price rises or transaction fees grow.

Price action around the event was muted. Bitcoin had rallied in the weeks before the halving, and some of that move faded afterwards, which several traders described as a case of the event being well known in advance.

Supporters of the network point to the halving as an example of predictable monetary policy, in contrast with central banks that have recently expanded their balance sheets and pushed rates below zero. Critics argue the fixed supply schedule makes bitcoin poorly suited for everyday use as a currency.

The next halving is expected around 2020. Until then, the new supply entering the market each day is lower, and the debate over what that means for price will continue.