Interestingly, Satoshi never stated a reason for implementing halving in Bitcoin's protocol.
We can make assumptions on what the reasons were.
Satoshi wanted the supply to be finite, but didn't want to release them all at once, so opted to introduce new ones in blocks. Here now posed the problem that I would assume led to halving;
• If mining reward was left at 50
BTC per block, we would have had the entire apply mined within 8 years, after 420,000 blocks. Way too soon.
• This would have caused an issues cause miners will be left to rely on fees was too early and can lead to loss of majority of miners.
• Including halving into the protocol was genius. It eases miners into life without mining (coinbase) reward and also factored in how price changes. Early on when the price was low, 50 units should be enough incentive, but as the price increases, as low as 1 unit or less will be valuable enough to motivate miners.
He should have made it 1 block every 20 minutes not 1 block every 10.
We are now feeling the first effects of what I call the "real flippening".
Here is what the real flippening is.
Rewards ------------ fees
50.0000 under 0.2 btc 2009-2012
25.0000 under 0.4 btc 2012-2016
12.5000 under 1.0 btc 2016-2020
6.2500 under 2.0 btc 2020-2024
3.1250 under 3.0 btc 2024-2028 first taste of flippening
1.5625 under 3.0 btc 2028-2032 the flippeningSo 2024 to 2032 will be new and flipped.
miners are prepping by figuring ways to push the fees to new highs.
Should be interesting.