Halving is the reduction of the reward earned by miners by half. Halving aims to maintain the scarcity of crypto assets such as bitcoin. With halving, the number of new bitcoins entering circulation remains limited, so their value will continue to rise.
Bitcoin is only released to the market when miners successfully validate bitcoin transactions. When someone makes a bitcoin transaction, the transaction is grouped into a block containing a collection of transactions. Miners will then validate that set of transactions through proof-of-work, by solving complex mathematical puzzles using computational power.
After the miner successfully performs the proof-of-work, a new block containing the transaction pool will be added to the Bitcoin blockchain. Miners will get a reward in the form of transaction fees, and new bitcoins for each block added. This process is the only way to release new bitcoins into circulation.
Halving is done every 210,000 blocks that are mined or roughly the same as every 4 years. Bitcoin has undergone three halving cycles since its inception in 2009.
The reward miners earned for each block when Bitcoin was launched in 2009 was 50 BTC. The reward was then cut to 12.5 BTC at the second halving in 2016, and to 6.25 BTC at the third halving in 2020.