This is called a “halving” because it’s like cutting a cake in half… but with math and computers instead of knives and flour.

Now, why do we need to halve the rewards for miners? Well, imagine if everyone started mining bitcoins at once (which would be pretty cool, actually). The more people mine, the harder it becomes to find new blocks because there are so many other people trying to solve the same puzzle. This is called “difficulty adjustment” and it’s like a built-in system that keeps the network running smoothly by making sure each block takes about 10 minutes to be added (on average).

So, when more miners join the network, the difficulty goes up to compensate for their increased computing power. And when fewer miners are around, the difficulty goes down so that it’s easier to find new blocks and keep the system running smoothly. This is all done automatically by a fancy algorithm called “the hashcash proof-of-work” (which sounds like something out of a sci-fi movie).

But here’s where things get interesting: when there are fewer miners around, it becomes easier to find new blocks and add them to the network. This is because the difficulty adjustment algorithm takes into account not just how many people are mining right now, but also how many people were mining in the past (which helps prevent sudden spikes or drops in difficulty).

So, when a halving happens, it means that there will be fewer new bitcoins created over time. This is good for two reasons: firstly, it makes each individual bitcoin more valuable because there are less of them around; and secondly, it helps prevent inflation by limiting the total number of coins that can ever exist (which is currently set at 21 million).

But what about difficulty adjustments? Well, when a halving happens, the network automatically adjusts the difficulty to compensate for the reduced rewards. This means that each block will still take around 10 minutes to be added on average, even though there are fewer new bitcoins being created. And this is important because it helps prevent “mining centralization” (which would happen if a single miner or group of miners were able to control the majority of the network’s computing power).

So, in summary: halvings and difficulty adjustments work together to keep the Bitcoin network running smoothly by limiting the total number of coins that can ever exist, preventing inflation, and ensuring that each block takes around 10 minutes to be added on average. And while it might sound complicated at first, once you understand how everything works together, it’s actually pretty simple (at least in theory).