What is the Bitcoin halving: 12 years of evolution in the mining system

Bitcoin, which accounts for the largest market capitalization in the cryptocurrency market, experienced its fourth halving event this April. In cryptocurrencies, a halving refers to an event where the block reward miners receive for generating a new block is cut in half. This crucial mechanism of cryptocurrencies limits the new supply of Bitcoin and maintains the scarcity of the asset.

In the first halving 12 years ago, the block reward decreased from 50BTC to 25BTC. Since then, after three more halving events, it has now fallen to 3.125BTC, dramatically restricting the influx of new mining supply into the market. This halving mechanism is fundamental to the design of the Bitcoin network, enabling a limited supply of 21 million coins.

Cryptocurrency Mining Rewards Plummet: Remaining 1.2 Million BTC and Rising Mining Difficulty

As of January 2026, the circulating supply of Bitcoin has reached approximately 19.98 million BTC, and about 1.2 million BTC still need to be mined to reach the cap of 21 million BTC. While this amount may seem small compared to the total mined Bitcoin, the path to achieving it is not easy.

A significant increase in mining difficulty has made the mining process more complex. According to MinerStat data, Bitcoin mining difficulty has risen sharply and surpassed the 100 trillion mark for the first time last year. The next difficulty adjustment is scheduled every few months, requiring miners to spend more time and energy. Under the dual pressures of decreasing rewards and increasing difficulty, maintaining profitability in mining operations remains a challenge for the entire industry.

Ambitious Mining Companies Post-Halving Event: Strategic Shifts Amid Bitcoin Price Rise

As the overall cryptocurrency market continues its upward trend, Bitcoin miners are strengthening their responses to challenges. Since the halving event on April 20, 2024, Bitcoin’s price has risen by about 45%, currently hovering around $90,000. While the dollar-denominated block rewards benefit from the price increase, the overall industry’s profit margins are under pressure due to declining hash prices.

Major mining companies are accelerating survival strategies. Key players like Marathon Digital and TeraWulf are focusing on cost reduction and the adoption of artificial intelligence (AI). According to a CoinShares report, 2024 has been a tough year for the industry, with both revenue and hash prices declining. Some companies are reevaluating their management strategies due to shrinking profit margins and are investing in AI technology to optimize mining efficiency.

At the same time, some miners are exploring new energy strategies. El Salvador is working on developing alternative Bitcoin mining methods utilizing geothermal volcanic energy, aiming to build a sustainable mining environment.

The halving mechanism in cryptocurrencies is not just a technical adjustment but a fundamental event that transforms the entire industry dynamics. Future mining environments and innovative industry responses will significantly impact the development of the entire cryptocurrency ecosystem.