The Halvings and the Miners' Bills
Every four years the reward for winning a block is cut in half. So far the miners have adjusted every time; the edge lies in the future.
The third basin is miners who can pay their bills: when mining stops paying, the least efficient miners switch off, the difficulty falls, and the rest become profitable again. Its edge is the reward itself, which the rules cut in half every 210,000 blocks, about every four years.
Four Halvings
The new bitcoin paid for each block fell from 50 to 25 on 28 November 2012, to 12.5 on 9 July 2016, to 6.25 on 11 May 2020, and to 3.125 on 20 April 2024. Each halving cut the miners' main income in half overnight. Each time the same thing followed: the least efficient machines switched off, the difficulty adjusted, and the rest carried on. In each case a rising price over the following months made up much of the loss.
The 2024 halving showed the other source of income. The very block that cut the reward, block 840,000, carried a record of about $2.4 million in fees, because people were rushing to use a new way of recording tokens on the Bitcoin ledger that launched that same day. The rush did not last, but it showed what a fee-paid future might look like on a busy day.
2022: When the Price Fell Instead
In 2022 the price of bitcoin fell by about three quarters from its peak while electricity prices rose. Mining stopped paying for many operators, and some of the largest public mining companies were pushed into bankruptcy; Core Scientific, one of the biggest in the United States, filed for Chapter 11 in December 2022. Their machines were sold or switched off, the difficulty adjusted, and the blocks kept coming every ten minutes. The basin held; some of the businesses inside it did not.
What It Shows
So far the price, and occasionally fees, have risen enough to cover each halving. But the halvings never stop until the new coins run out, around 2140, and long before then the reward will be small. At that point miners will have to be paid almost entirely by the fees people attach to payments. Nobody knows whether those fees will pay for enough machines to keep the ledger expensive to attack. This edge has not been reached; it is approaching on a known schedule.
Sources
Halving dates and rewards: the Bitcoin protocol schedule (every 210,000 blocks).
CoinDesk (20 April 2024). The Bitcoin halving is here, and with it a giant surge in transaction fees.
Cointelegraph (April 2024). Bitcoin users spend record $2.4M in fees on halving block.
Core Scientific, Chapter 11 filing, U.S. Bankruptcy Court for the Southern District of Texas (December 2022).