What are Bitcoin halvings and why are they important?

Bitcoin halvings occur approximately every four years, reducing the reward miners receive for adding new blocks to the blockchain by half. This mechanism controls the supply of new Bitcoin, making it increasingly scarce over time.

Halvings are important because they reduce the rate of new Bitcoin entering circulation, often leading to increased demand and price appreciation. This deflationary aspect is designed to ensure Bitcoin’s scarcity, mimicking precious metals like gold, and plays a critical role in its long-term value proposition.