What is the Monero "Halving"? Explaining the Monero Mining Rewards Schedule

Monero, the most popular privacy coin on the market used to have a mechanism for decreasing the issuance of new XMR over time, but that process was uniquely different from cryptocurrencies like Bitcoin. Currently, Monero is in the "tail emission" phase, meaning that the block rewards are fixed at 0.6 XMR, and will remain so indefinitely.

What is Monero?

Monero is a privacy-focused cryptocurrency that made its debut on the market in 2014. Its consensus mechanism is conceptually similar to that of Bitcoin, as Monero also uses Proof-of-Work to achieve consensus. However, Monero implements measures to prevent mining with specialized ASIC chips.

Unlike Bitcoin, Monero can be mined profitably with consumer-grade computer hardware. Ethereum's RandomX PoW algorithm is designed to be especially efficient when mined with CPUs (central processing units), which means that anyone with a reasonably powerful computer can mine Monero.

While those with access to more powerful CPUs still have an advantage, mining Monero is still much more accessible than mining cryptocurrencies that aren't ASIC-resistant. ASIC mining rigs cost several thousand dollars each and can perform no useful work other than mining crypto.

The Monero project is highly dedicated to privacy, and all transactions made with XMR are fully private. Outside observers can't see the addresses or amounts involved in any Monero transaction. The Monero cryptocurrency achieves this high degree of privacy through a range of technologies, including Stealth Addresses, Ring Signatures, and RingCT. An added benefit of Monero being private is that XMR coins are completely fungible.

Monero "halving" explained

Like Bitcoin, Monero is a proof-of-work cryptocurrency, which means that Monero miners need to deploy their computer hardware to solve resource-intensive mathematical problems in order to have a chance of adding the next block to the Monero blockchain and reaping the associated block reward. Monero is designed so that a new block is added to the Monero blockchain approximately every two minutes.

Monero mining

While Monero is a proof-of-work coin, it has plenty of unique aspects. To start off with, Monero is a bit different from most other Proof-of-Work coins since it has no cap on its maximum supply. While Monero’s maximum supply is technically infinite, this doesn’t have much of an impact from a practical standpoint—we'll explain why this is the case soon.

Also, Monero’s RandomX proof-of-work algorithm is specifically designed to deter ASIC miners, which means that Monero can be mined effectively with consumer-grade computer hardware. This algorithm was designed to be particularly efficient for users who are mining with their computer’s CPU (central processing unit).

So, is there such a thing as the Monero halving?

In short, no. But as we mentioned previously, Monero did have a mechanism to gradually slow down the rate at which XMR coins are being created. As of May 2022, Monero has entered a state of "tail emission", which means that the block reward is fixed at 0.6 XMR in perpetuity. Assuming a block time of 2 minutes, this means that about 432 XMR are being created on a daily basis from that point forward, and this will stay the case unless the Monero protocol is modified. At the time of writing, the number of XMR coins in circulation is 18.45 million. 

Monero will always have some inflation (although the inflation rate will decrease over time), but it will help keep the Monero network more secure by continuing to provide an incentive for miners beyond just transaction fees. Cryptocurrencies with a capped supply, such as Bitcoin, might encounter problems in the future when miners will have to primarily rely on transaction fees to finance their operations. However, that is still in the far future, as it will take a very long before the last Bitcoin is mined.

Monero tail emission vs Bitcoin halving

Unlike Monero, some cryptocurrencies such as Bitcoin will eventually become deflationary, with no new coins being created and the effective supply shrinking over time due to users losing access to their coins.

This scenario might be attractive for price speculators at first glance, but there is a risk that transaction fees alone will simply not be enough to incentivize miners to provide an adequate amount of hashrate. Such a scenario would hurt the security of the Bitcoin network, which could also translate into a drop in the value of BTC.

With each Bitcoin halving, miners have to rely on an increase either in the price of Bitcoin or the demand for transacting on the Bitcoin network in order for mining to remain profitable. Otherwise, some miners are forced to stop mining, which results in a lower overall hashrate and consequently weaker security of the Bitcoin network.

You can visualize Monero’s time emission better with this helpful chart comparing the supply dynamics of Monero and Bitcoin provided by Reddit user u/Amichateur:

The bottom line

While Monero doesn't have a traditional halving cycle, the mining rewards gradually decreased until May 2022, when they were fixed at 0.6 XMR per block, where they will remain indefinitely. This ensures that miners will continuously secure the network, which is beneficial for Monero in the long term. 

Tail emission ensures miners remain incentivized to secure the network while keeping Monero accessible through CPU mining. By avoiding a capped supply, Monero reduces reliance on transaction fees, supporting long-term network sustainability and decentralization.

If you're looking to store your XMR, it's probably best to keep it in a dedicated crypto wallet. Check out our list of the best Monero wallets to find the one that's best for you.