[News Terms] Bitcoin Surpassing 100 Million Becomes Scarcer, 'Halving'

The term 'half-life' refers to the time it takes for the quantity of a substance to reduce to half of its initial value. The person who first used the term half-life was the British physicist Ernest Rutherford. While studying the process in which uranium or thorium transforms into other intermediate elements through radioactive decay, he discovered that the amount of radioactive elements decreases exponentially over a certain period of time, and defined the half-life as 'the time it takes for half of a given amount to decay.'

Since Rutherford, the half-life has been frequently used in scientific fields such as nuclear physics and is now applied in various social domains. Recently, the most notable area is the virtual asset industry. This is because the half-life of Bitcoin, the leading cryptocurrency, is scheduled for next month.

[Image source=Yonhap News]

Bitcoin, developed by a programmer under the pseudonym Satoshi Nakamoto, is designed so that the reward obtained from mining halves once a certain amount is circulated. This phenomenon of mining rewards being halved repeats approximately every four years and is called the 'Bitcoin half-life.'

Since Bitcoin was created in 2009, there have been three half-lives so far. When Bitcoin first appeared, 50 coins were given per block, but in 2012 this was reduced to 25, in 2016 to 12.5, and in 2020 to 6.25. The exact timing of this upcoming half-life is unknown, but the most widely reported date is April 22.

The halving of mining rewards during the Bitcoin half-life means a decrease in supply. This supply reduction can increase Bitcoin's value and act as a factor driving price increases. For example, during the 2016 half-life, the price of Bitcoin, which was around 800,000 won, surged more than 30 times to reach the peak of about 28 million won in 2017. This year, when the fourth half-life event is scheduled, expectations for the listing of Bitcoin spot exchange-traded funds (ETFs) on the U.S. stock market are also overlapping, causing prices to fluctuate already. On the 13th, the price of 1 Bitcoin was trading in the range of 101 million won on Upbit, a domestic virtual asset exchange.