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Bitcoin The Almighty Buck

The Countdown To Bitcoin Halving 2020 Begins (insidebitcoins.com) 82

Posted by BeauHD from the what-to-expect dept.
Ali Raza from InsideBitcoins discusses the expected Bitcoin Halving in May 2020, and the impact it will have on the market valuation. From the report: The next Bitcoin Halving will take place on May 20th 2020. It will be the third time, that the block reward of the most known blockchain will be halved. As a consequence, miners will earn 50 percent less BTC for every generated block. Experts are expecting, that this development could change the value of bitcoin. In the past, each of these events boosted the bitcoins market valuation by more than a thousand percent. Because of this development, the awareness of cryptocurrencies has grown. Still, not a lot of people are talking about BTC and the upcoming halving.

The last halving took place in July 2016, where BTC was worth USD 600. Looking back, we can say that this last halving was the start of the great bull run of 2017. In that bull run BTCs price exploded and marked a new all-time high at USD 19,783,06. So, should investors buy bitcoin in 2020? According to us, the most interesting development regarding the upcoming halving will be the development of the bitcoin price. If the halving will have the same impact as in the past, we may see a new all-time high in 2021. It's even possible that bitcoin could hit a new all-time high at 10 times its current valuation.
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The Countdown To Bitcoin Halving 2020 Begins More

The Countdown To Bitcoin Halving 2020 Begins

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  • Headline is wrong (Score:5, Informative)

    by phantomfive ( 622387 ) on Monday February 17, 2020 @08:16PM (#59737994) Journal
    The headline makes it sound like bitcoin value will be halved, but it's not. It's merely the reward for calculating the next block in the block chain.

    In bitcoin, the node that calculates the next block first gets rewarded with some coins that are created from thin air. Euphemistically we call that mining.

    Every few years the reward gets cut in half, until eventually it is zero. When the transaction fee is zero, the only motivation to calculate the next block will be for the transaction fees.

    So what this means is that there will be pressure for bitcoin transaction fees to go up. It also means there will be a smaller increase in the total money supply.

    So if bitcoin is going up anyway, then the price might go up farther than it otherwise would.

    • Re: (Score:1, Troll)

      by nonBORG ( 5254161 )
      Because Bitcoin is increasing it's supply it is inflationary (should bring the price down, all other things being equal) If bitcoin had any Utility that was outside of ransomware then there would be something to base it's value on. It seems like the final collapse of bitcoin is coming it is just a matter of when, don't be holding the bag when it hits. Of course there is money to be made on buying and selling in the mean time probably best through a CFD on bitcoin since you can then avoid the transaction cos

      • Because Bitcoin is increasing it's supply it is inflationary (should bring the price down, all other things being equal)

        Yeah but all things aren't equal, and there are other factors that affect the price of bitcoin much much more.

      • Because Bitcoin is increasing it's supply it is inflationary

        You do realize the "supply" of bitcoin is increasing very slowly now, and getting slower, right???

    • When the transaction fee is zero, the only motivation to calculate the next block will be for the transaction fees.

      I think you mean "when the mining reward is zero..."

    • So youâ(TM)re really saying that blockchain is the digital equivalent of the gold standard? Once you borrow your gold reserves, thatâ(TM)s it youâ(TM)ve hit a ceiling on what you can spend

    • This won't cause pressure on the transaction cost. The transaction cost is market-driven. If there are more transactions waiting that the block throughput allows, then the transaction costs rises because you bid how much you're willing to pay to be first in line. If you're offering just 1 cent on the transaction fee and there are no other transaction in line offering more, then they'll still include your 1 cent transaction in the next block.

      This is pretty much guaranteed to happen, because block generation

    • Prime numbers also are calculated out of thin air, calculations that also spend energy. but we get those primers... probably to factor some sha1 or trying for sha256 Weather models also must take some energy to calculate... even so, the weather man is allowed to be mistaken for the next day (or so)! My next google search (ephemeral) and to mostly no point in doing it, will make some servers search that info for me, that also takes some energy! Thinking too much... im spending energy so goto eat food now :)
      • Calculating the block takes a lot of energy, but giving the reward (or the new "mined" coin) takes zero additional energy until it is spent. So it's OK to say "out of thin air" in this case.

  • at some point the cost of mineing will get to high (Score:3)

    by Joe_Dragon ( 2206452 ) on Monday February 17, 2020 @08:22PM (#59738008)

    at some point the cost of mining will get to high to profit unless you don't pay for the hardware or power.

    • The price of mining will never get too high. The price of mining is based on the current bitcoin price and the number of miners. If the bitcoin price starts to drop then it becomes unprofitable for some miners who exit the market. As miners exit the market then the profit increases for the remaining miners until it reaches equilibrium again.

      • Additionally to this, if the price drops then old hardware stops becoming net-positive so existing miners retire the most inefficient rigs first, even if they don't leave the market. Any serious player left would have both new and old hardware. So a price drop always eliminates the least efficient *hardware* not necessarily mining operations, and it slows the uptake of new hardware.

    • Re:at some point the cost of mineing will get to h (Score:5, Insightful)

      by phantomfive ( 622387 ) on Monday February 17, 2020 @09:04PM (#59738096) Journal
      Believe it or not, Satoshi Nakamoto thought of that.

      The intent is that eventually no new coins will be given out (or 'mined'). At that point, bitcoin blockchain calculation will be entirely funded by transaction fees. Arguably the only reason mining existed was because money had to be distributed somehow.

      When a user wants to spend bitcoin, the user has the option to set the transaction fee. The user can choose any amount, including zero. The transaction fee eventually goes to the node calculating the next block in the blockchain (a 'block' is just a list of transactions).

      When a user submits a transaction for processing, it gets put into a 'pool' of potential transactions. The nodes can choose any set of transactions they want to put in the next block, but it makes sense to choose the ones with the highest transaction fees.

      tl;dr transaction fees will replace 'mining'
      • You still need miners to write the blocks to the blockchain. Without miners the security of the blockchain diminishes and a 50% attack becomes trivial. The end of blcok rewards is not the end of mining, you need to be mining to get transaction fees.
        • It doesn't make sense to me to call them 'miners' at that point, since they are not 'finding' or creating new bitcoin.

          At that point, they are merely transaction processors. And if the transaction fees aren't high enough, they will stop mining and the transactions won't get processed (until enough transaction processors drop out, or until the fees go up).

          • Re: (Score:2)

            by mestar ( 121800 )

            At which point you can stop your mining until fees in total add up to your cost. And if everybody is doing that, no transactions go trough until there is enough fees in a block.

          • If the transaction fees drop then the block difficulty also drops, so the total amount of operations needed to process the blocks drop to near-zero. When this started you could process a Bitcoin block in a couple of minutes on your home CPU using very inefficient software. The base-level cost of the transaction processing is near-zero, there will never not be miners as long as there's at least one person willing to spend a cent or so on a transaction.

      • Mining's main purpose isn't to 'distribute' the original coins, that's a secondary thing. Mining generates transaction blocks. Without mining, there are no transactions. That's its primary purpose and distributing coins is an incentive to make that work.

  • Too bad (Score:5, Funny)

    by fahrbot-bot ( 874524 ) on Monday February 17, 2020 @08:40PM (#59738048)

    Bitcoin Halving

    Too bad it wasn't initially called Bytecoin so we could call this Nibblecoin.

    (sigh. if wishes were horses, I'd have a house full of horse sh...oes.)

  • Halving schedule for Bitcoin (BSV) and the two protocol forks, Bitcoin Core (BTC) and Bitcoin Cash (BCH):

    Bitcoin Cash (BCH) - 2020-04-07
    Bitcoin (BSV) - 2020-04-09
    Bitcoin Core (BTC) - 2020-05-07

  • Why? (Score:3)

    by fennec ( 936844 ) on Tuesday February 18, 2020 @03:59AM (#59738766)
    Why do they need to halve the mining reward? The article just links to Bitcoin buying sites and somehow urges you to buy now... To me it looks like plain market manipulation...

    • Nobody gets to choose when the halving happens, so it's not a market manipulation.

      The halving was built into the algorithm from day 1. It halves automatically every X blocks, where X is a number set in the algorithm when the Bitcoin protocol was created. It's a standard part of the design of these types of coins, designed to ensure that only a finite amount of coins ever get created. It's an anti-inflationary measure.

      To clarify: 1 + 1/2 + 1/4 + 1/8 has a mathematical limit of "2", but is an infinite series.

      • Re: (Score:2)

        by fennec ( 936844 )
        Thank you for the explanation Cipheron!

      • Re: (Score:2)

        by mvdwege ( 243851 )

        It's an anti-inflationary measure.

        Given that it's based on a finite resource, call it what it is: deflationary.

        Which is a stupid thing for a currency to be.

  • I wonder if the headline was intentionally worded this way to mislead people into believing that bitcoin's speculative value would fall in half?

  • Experts are expecting, that this development could change the value of bitcoin

    Randomly placing commas does not make you look smart.

    • Re: (Score:2)

      by xophos ( 517934 ) *

      Neither does nitpicking.
      Not all people on slashdot are native english speakers.

      • Neither does nitpicking.

        If I wanted to nitpick I'd have made this post for the last ten submission that had this.

        Not all people on slashdot are native english speakers.

        No, but the editors are. Where's the point in having editors if they fail high-school English?

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