What is cut in half in a Bitcoin halving?
Correct answer
Answer D: The permitted amount of new bitcoin per block.
Quick explanation
A halving reduces the issuance of new bitcoin, also called the block subsidy. It does not halve existing balances or transaction fees.
Detailed explanation
Bitcoin Core sets a halving interval of 210,000 blocks for the main network. After each interval, the permitted block subsidy halves. It began at 50 BTC per block, then fell in steps to 25, 12.5, 6.25 and smaller amounts.
The halving follows block height, not a fixed calendar date. Because Bitcoin targets an average of roughly one block every ten minutes, halvings are approximately four years apart. Actual dates can be earlier or later because blocks are not found at exact ten-minute intervals.
Existing bitcoin are not halved. Transaction fees do not follow an automatic halving schedule either. They arise from demand for block space and users' fee decisions. Total miner revenue can therefore fall by more or less than half after a halving, depending on fees during the period.
Key takeaway
The halving halves the block subsidy, not holdings or fees.
Common misconception
The common phrase the miner reward halves can wrongly suggest that fees also halve exactly.
Sources used
Bitcoin Core - GetBlockSubsidy
This source is mainly intended for developers. The relevant information may therefore be harder to find.
Check original sourceBitcoin Developer Guide - Block Chain
This source is mainly intended for developers. The relevant information may therefore be harder to find.
Check original source