36 ms·

Bitcoin Halving Just Occured

541 points by 3ds 6y ago

nikivi 6y ago
Would it mean there would be less interest in mining bitcoin (and thus 'wasting' electricity)?
- X6S1x6Okd1st 6y ago
  Only if mining has hit an equilibrium where it's entirely price dependent. If mining is constrained by supply (either of sufficiently cheap energy or of miners) then we wouldn't see a drop. Fees are still not near dominating the rewards so we do expect to see miner revenue drop due to this.
  - nikivi 6y ago
    But there will be a point in future where mining no longer would make sense? Curious if there are any projections when that is expected to happen.
    - lftl 6y ago
      Presumably fees will rise at that point to making profitable enough to move transactions.
      - fiter 6y ago
        While I can understand the presumption that fees will rise to make it profitable to move transactions, is there any simple market mechanism for making sure transactions move safely? A slow continuous drop in hash rate could result in the network being more vulnerable to attacks.
    - GuB-42 6y ago
      As long a s Bitcoin has value, mining will always make sense. First thing, even if the block reward is zero, there are still transactions fees. We are not here yet but they are expected to be the primary motivation in the future. Second, difficulty scale proportionally to the global mining power so that one block is mined every 10 minutes or so. As rewards decrease, the most expensive mining operations will shut down, keeping the cheaper ones profitable. An equilibrium will be found. The last point is a problem as it makes the network more centralized, potentially allowing for 51% attacks.
    - X6S1x6Okd1st 6y ago
      Depends entirely on your operating cost and expected return. We know that the expected return from newly minted bitcoins will reach zero at some point in the future. We don't know if expected return from tx/fees will ever hit zero. TBH if it ever got back to the point where I could mine a block every couple weeks with a GPU, and I had access to a GPU, power source and internet connect I'd probably start mining again. IMO Bitcoin exists as an interesting and historical concept in too many people's minds for mining to ever stop. The real worry would be that mining drops off to the point where 51% attacks are viable on the bitcoin mainnet. We'd potentially see that if many large miners either started renting out their services to the highest bidder or sold all their miners. Once we see more hashpower for rent or purchase than goes into honest mining we have the potential for a 51% attack.
- PopeDotNinja 6y ago
  Tommorow it will cost twice as much to mine the same amount of Bitcoin that you would have mined yesterday (I think).
  - lozf 6y ago
    Well, the cost stays the same, but the reward is halved -- so yes the effect is similar to each costing double, but that's not really precise. It's better to consider it as miners subscribe to a lottery (for the cost of their electricity). Roughly every 10 minutes someone wins that "block". Yesterday the reward for winning was 12.5 BTC per block, and now it's 6.25... the cost of entering hasn't changed. There's more to it of course, e.g. as the difficulty adjusts as in line with the hashrate on the network, but lagged by roughly a couple of weeks worth of blocks being mined. Fees in any given block vary, which are added to the block reward. Many miners pool rosources and each share a fraction of the reward. Etc.
- kinghajj 6y ago
  I'd assume any miners who cannot profitably operate with the new block reward * price would stop, but a decrease of new supply should cause some increase in price too.
  - GhostVII 6y ago
    I don't think we should expect an increase in price given that the halvening is well know and predictable. It should be priced in, if anything I think it would be overvalued because of it since lots of people are buying in because they expect a spike in price.
- new2628 6y ago
  No need for quotes, it is an absolute waste of energy and effort on a planetary scale with no benefit whatsoever.
  - new2628 6y ago
    Vote away, hurt bitcoiners. EDIT: sorry for the silly remark, ironically, the original comment stands at +10 at the moment after starting deep in the negative.
    - kinghajj 6y ago
      Only this comment, since it's so immature.
  - banachtarski 6y ago
    It's an "extreme statement" but to be honest, I'm inclined to agree. As a currency, it's an absolute failure. Far too volatile, illiquid, and unregulated to be even remotely usable/reliable. As for everything else? It's still looking for a "solution" that isn't just something hype driven.
    - 535188B17C93743 6y ago
      Unfortunately, its technology (or maybe the combo of its popularity and technology) never really allowed for it to become anything but a speculative asset.
    - nikivi 6y ago
      Do you have any thoughts on what would make a better cryptocurrency? Either in the works and what works already? Perhaps things like Cardano (https://www.cardano.org https://www.cardano.org) or Polkadot (https://polkadot.network https://polkadot.network) are better?
  - wyldfire 6y ago
    > no benefit whatsoever Clearly, the benefits for any energy consumption should be seen from the point of view of the consumer. They wouldn't do it if it were of no benefit. It would be more fair for you to describe the distributed ledger clearing as of no value to you. Because it definitely has a value to some folks. That said: some other cryptocoins do indeed provide a ledger like bitcoin, still decentralized and trustless, but without mining (and without block rewards).
- EthanHeilman 6y ago
  Conventional wisdom says no, decreases in the national currency value of bitcoin would reduce interest, but the halvening won't. The reason why is that electricity for mining is priced in national currency, so interest in mining bitcoins depends on a miners future expectation of the value of bitcoin price in national currency when they sell the bitcoins to pay the electricity bill. The current wisdom is that the halvening decreases the amount of bitcoin that miners receive while increasing the USD value of bitcoin because it decreases market supply and the perception of market supply.
  - lultimouomo 6y ago
    But halvening happens on a fixed schedule, so all future halvenings are already priced in the value of Bitcoin in national currency. So if you get half the bitcoins for mining, ceteris paribus you are getting half the dollars.
    - EthanHeilman 6y ago
      I agree if you assume all future halvenings are priced in. It has been claimed that there is a relationship between halvenings in the past and in increases in the price of Bitcoin. If true this would suggest that at least in the past halvenings are not priced in.
- ufmace 6y ago
  It's a disincentive towards mining bitcoin, yes. However, everybody knew this was coming now, so any competent mining operator should have already accounted for it in their financial/business planning.
- nas 6y ago
  Likely yes but it depends on the Bitcoin price. The amount "wasted" (i.e. securing distributed ledger against attacks, providing difficult to fake notary service for transactions) is dependent on block rewards and fees. Since the block reward makes up most of that and has now been halved, you should expect less resources being put into mining (i.e. unprofitable miners will turn off their machines). If the price of Bitcoin now doubles presumably no miners will be turning off their machines. If it doesn't double, some fraction of all mining setups just became unprofitable.
- GhostVII 6y ago
  For all Bitcoin miners to be profitable, the global reward for mining Bitcoin must be less than the global cost. Since the reward has now halved, I think the electricity spend should also drop by half, but this may already be accounted for since miners have known about the halvening for a while and should have reduced capacity accordingly already.
  - jcranmer 6y ago
    > Since the reward has now halved, I think the electricity spend should also drop by half I doubt that. Look at the recent oil production issues: despite demand falling off a cliff, and the price of oil following it, production (supply) hasn't dropped anywhere near enough to match the fall in demand. It's basically a game of chicken--keep going at full force, eating your losses, in the hopes that your competitors are weaker and will be forced to fold before you will.
trynewideas 6y ago
MarketWatch: https://www.marketwatch.com/story/what-is-the-bitcoin-halving-and-which-day-does-it-happen-2020-05-11 https://www.marketwatch.com/story/what-is-the-bitcoin-halvin... What is the halving or halvening? The event is known as the “halving” or “halvening,” and occurs every four years, where the rewards for those who support bitcoin are slashed, quite literally, in half. So-called bitcoin miners expend tremendous amounts of computing power to verify transactions and link them, digitally into a block, hence the term blockchain. Miners on the blockchain — the digital ledger technology that underpins the currency — receive a precise number of bitcoins for their efforts in solving a complex puzzle. That computing effort is at the very heart of the digital currency that was created 11 years ago by a person, or persons, identifying themselves as Satoshi Nakamoto.
- llarsson 6y ago
  What does that mean in even plainer English? Is Bitcoin now half as valuable? Did mining it get easier/harder? Less profitable to mine, but existing Bitcoins still have same value as before?
  - searchableguy 6y ago
    mining it will result in half the reward.
    - llarsson 6y ago
      But existing Bitcoin still have the same value? Does this mean the end of businesses that seemed to exist only to mine using custom computers and GPUs? Because their revenue stream has been cut in half?
      - ur-whale 6y ago
        The event will not exactly come as a surprise for the miners: the date was more or less built-in the bitcoin algorithm from day one. If it means the end of their business, it means their planning was fairly poor.
101404 6y ago
So?
- unhashable 6y ago
  Miners block rewards will be reduced in half from 12.24 BTC to 6.12. In theory this reduces overall sell pressure on BTC in a key time when Bitcoin's narrative is maturing and adoption is moving forward with institutions. When Central Banks throughout the world are printing unlimited fiat, there is no better time to hold the universe's scarcest asset.
  - krustyburger 6y ago
    Calling Bitcoin the universe’s scarcest asset is laughable. Leaving aside the hyperbole of invoking the “universe” to rank the scarcity of something terrestrial, there are many conventional assets that are scarcer than Bitcoin, like Picasso paintings or mansions in Bel Air. Lastly, Bitcoin is not even the” scarcest” cryptocurrency. Even if you stand to gain if Bitcoin’s price increases, you should not be trying to generate hype for it here on HN.
    - lgl 6y ago
      This! Also ironic that the currency that would ideologically only bring benefits to the unbanked is now largely held and controlled by bank-like institutions and the crypto equivalent of the top 0.1% since most bitcoin is held in a very small amount of wallets. Its premise is now basically to replace one shitty system for another shitty system but one that's unregulated and powered by memes and waste of electricity.
    - leorio 6y ago
      scarcity is determined by demand not supply.
      - krustyburger 6y ago
        It is literally the difference between supply and demand and is determined by both.
chrisshroba 6y ago
Will this likely increase typical transaction fees to make up for block reward?
- ur-whale 6y ago
  Transaction fees follow supply and demand for blockchain space. They haven't been correlated to block reward AFAIK.
- miguelmota 6y ago
  Transaction fees are driven by transaction volume. The more congested the network, the higher fees will be because there's a limit to how many transactions can fit in a block. If there's normal transaction volume on the network then transaction fees will remain the same. Miners can choose to reject any transactions but equally they'll also be miners who accept any transaction.
  - empath75 6y ago
    At zero block reward, who pays for mining?
    - kinghajj 6y ago
      Transaction fees.
    - deleted 6y ago
      [deleted]
- ajkdhcb2 6y ago
  In the long term yes the halving schedule must lead to huge fees (eventually there will be zero inflation). As inflation decreases, miners have to be paid by fees to secure the network. Otherwise the security collapses.
  - gridlockd 6y ago
    The fees are paid by the users of the network, if the demand on network transactions is low, there will be little reward for mining. This means that without sufficient demand for transactions, a majority of miners would have to abandon the network, which would indeed put network security at risk. Therefore I predict that the miners will make the supply of Bitcoin unlimited, should that situation occur. They already got their way with keeping the Bitcoin block size fixed, which kept transaction fees high.
liquidify 6y ago
Miners will now receive 6.25 bitcoins per block.
535188B17C93743 6y ago
The crusade will continue on. Many folks whom have bought into BTC at this point know very little about its technology. Not sure if that's a good or a bad thing...
- k00b 6y ago
  It's a good thing only if it indicates the UX is getting better.
- rabbitonrails 6y ago
  "who have bought into BTC"
andrewla 6y ago
If you're wondering why your friends who are into cryptocurrency are in a tizzy, it's related to a model called "Stock-To-Flow" that attempts to post-facto explain the price of Bitcoin (and other liquid assets, like gold) in terms of the rate of production. Proposed by PlanB [1] it is a source of constant derision/hope/skepticism/dismissal by the Bitcoin community, and the halving of the reward gives it its first non-backtested novel prediction. Roughly it predicts [2] that the price will settle into a band around 30,000 USD sometime next year. [1] https://twitter.com/100trillionUSD https://twitter.com/100trillionUSD [2] https://cointelegraph.com/news/bitcoin-halving-will-be-make-or-break-for-stock-to-flow-model-planb https://cointelegraph.com/news/bitcoin-halving-will-be-make-...
- artursapek 6y ago
  Shameless plug: you can plot the price of BTC along with the "Stock-to-Flow" model in real time on Cryptowatch! https://share.cryptowat.ch/charts/bqsr58eein8u9uevh370-kraken-btcusd.png https://share.cryptowat.ch/charts/bqsr58eein8u9uevh370-krake... https://twitter.com/cryptowat_ch/status/1253335480256483330 https://twitter.com/cryptowat_ch/status/1253335480256483330
  - simias 6y ago
    Not only is the width of that purple region absolutely ridiculous, it doesn't even manage to match the actual data. I'm not exactly convinced.
    - artursapek 6y ago
      You can configure it by # of std deviations, or remove it entirely. Thanks for meeting the stereotype of "asshole HN commentator" I appreciate your feedback
    - dang 6y ago
      Please don't be a jerk on HN. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- 6y ago
k00b 6y ago
Coinbase transaction message in last mined block with 12.5 BTC subsidy: "NYTimes 09/Apr/2020 With $2.3T Injection, Fed's Plan Far Exceeds 2008 Rescue" https://blockchair.com/bitcoin/block/629999 https://blockchair.com/bitcoin/block/629999
- arcticbull 6y ago
  Ooh! Ask them about Tether! And how all the worlds crypto prices are in USDT, which is at most 70% backed (30% seized by the feds in a money laundering sting) and has never been audited.
  - seibelj 6y ago
    You grind this axe in literally every crypto thread, it's getting very stale. Yes, you hate Bitcoin, we get it!
    - liquidify 6y ago
      He is right. Tether is completely messed up.
      - seibelj 6y ago
        No one puts a gun to anyone's head to use it. There are many stablecoins now, with various properties. USDC trades at the same value as USDT https://www.circle.com/en/usdc https://www.circle.com/en/usdc Traders value Bitcoin the same in USDT or USDC, and USDT / USDC trades at parity. That implies the market trusts USDT. It doesn't matter what people on HN say, as long as the market agrees.
        arcticbull 6y ago
        Frankly it's really strange to hear on the one hand: 1. ...that "the feds are debasing our currency through their relentless printing" It is producing a measured, consistent, relatively small 2% rate of inflation over decades and decades. They are of course acting on behalf of an elected body, and ultimately accountable to that body. They're also audited. 2. ...that Tether's relentless, un-audited, 70%-at-most backed printing is fine because the "market trusts it" and "nobody's forcing you to use it." The market trusts it because number go up, and it's in the interest of exactly zero market participants to show the world the emperor has no clothes. It's also not fair to say that "nobody's forced to use it" when everyone is forced to use it. In 2018, 80% of all crypto exchange transactions were conducted in Tether. That makes USD transactions by far the minority. Since arbitrage bots keep the prices in sync, and the majority is USDT, even the USD exchanges follow the USDT prices so long as there exists sufficient liquidity to balance the books. [1] [1] https://www.wsj.com/articles/the-mystery-behind-tether-the-crypto-worlds-digital-dollar-1534089601 https://www.wsj.com/articles/the-mystery-behind-tether-the-c...
empath75 6y ago
So, pre halvening -- the average block reward was worth about $100,000. Fees totaled about $5,000. I don't really understand the economics of this, but it seems there are a few possible outcomes: A) Prices double because miners refuse to sell at a price that gives them less than $100k a block and demand for coins is inelastic. B) Fees go up 10x because miners now need to make $50k in transaction fees instead of $5k per block to make up for the lower block reward, and demand for transactions in inelastic. C) Difficulty and prices drop because neither transaction demand nor coin demand is inelastic, and miners will begin turning off rigs that are no longer profitable at $50k per block. D) Some combination of the above.
- rantwasp 6y ago
  you should consider what the price to mine is vs the reward. as long as the reward > price to mine, the miners will keep mining. once it drops, you will either have miners dropping off the networks or the difficulty decreasing until another equilibrium is reached. once you have less miners it's possible that the TX fees will increase if you want your transactions mined (the miners cannot really impose a transaction fee. it's the transactions with the highest fees that get mined into a block and incorporated into the block chain)
  - empath75 6y ago
    in a free market, the price for any commodity should roughly track the cost of producing it.
    - rantwasp 6y ago
      you're working with the assumption that it's a commodity. It's more like a currency than a commodity. also, is the price of gold for example really tracking the cost of producing it?
      - empath75 6y ago
        Either side of that equation can lead — if the price of gold rises from speculators, miners will start employing costlier means of extracting the metal to meet demand.
masteranza 6y ago
Predicted by Luboš: https://motls.blogspot.com/2020/05/may-11th-12th-could-be-great-days-to.html https://motls.blogspot.com/2020/05/may-11th-12th-could-be-gr...
- jameslevy 6y ago
  Everyone thinking this seems to have resulted in it happening a couple days early. It's not yet clear whether today or tomorrow is a good time to short BTC.
deleted 6y ago
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ur-whale 6y ago
Interesting to see what will happen to Bitcoin which slashed the supply in half exactly at a time when major currencies have fully open the supply floodgates because of Covid-19. If the law of supply of demand carries any predictive power, BTC should see a compounded rise.
- nas 6y ago
  It will be interesting. The amount of fiat money being created right now is a bit crazy. Whether that is "good for Bitcoin" is not entirely clear. Bitcoin has failed to live up to initial hopes. Transaction fees are too high and throughput (transactions per second) is too low. In a way, it is victim of its own success, at least in terms of price per coin. The second layer protocols, like Lighting, were supposed to solve the fee and throughput problems. I've played with Lighting and when it works, it is amazing. However, it far from a simple and polished user experience. Maybe they will eventually get there. Or, maybe people will give up waiting.
- economicslol 6y ago
  The supply isn't changing, only the rewards for mining are.
mrunkel 6y ago
Does anybody actually use bitcoin? And by use I mean transact actual business, and not just speculate. You know, buying and selling real world goods and services. Or is it like gold reserves, people just hoard these digital numbers until they are ready to cash out. I'm really curious for the hoarders, if they're doing it as a hedge against global financial collapse, how exactly do they expect to redeem their bitcoin for anything tangible? These are serious questions, I've given bitcoin only a minimum of thought. It seems a great way to move value out of a closed economy like China, or for drug dealers to move cash across borders, but who else uses it?
- cblackthornekc 6y ago
  I used some of the lumens that I got through keybase. Mostly because I was buying something online and saw crypto as a payment option. But out of all the people I know with crypto, they treat them like potions in Skyrim. One day, I'll need all of these different coins. Until then I'll just hold them in my wallet.
- liquidify 6y ago
  No, the maintainers have purposely neutered its usability in favor of it becoming a "digital gold" or a "digital reserve". Fees are far to high for common uses, and this is entirely intentional. If you are looking for usable crypto currencies, you should look at Ethereum, Bitcoin Cash, Monero, or many others who have set up their chains to accommodate actual day to day use.
  - sillysaurusx 6y ago
    Isn't it a myth that fees are too high? $0.05 seems to get you in and verified within an hour, if I remember correctly.
    - dangwu 6y ago
      Waiting more than a few minutes eliminates all in-person, food delivery, and probably most same-day delivery transactions. Who’s going to wait an hour for the purchase to go through for an Uber Eats or Prime Now delivery?
llamataboot 6y ago
TLDR: mining rewards should pretty much have no effect on BTC price We're years into bitcoin and I feel that people still don't understand the basic premise that with an adjusting difficulty it literally doesn't matter how many people want to mine. Difficulty will adjust to about the break even point for miners that can run at scale (likely in a place with cheap electricity). The price of bitcoin is still based on supply and demand for bitcoin. Whatever THAT clearing price is will determine whether or not it is profitable to mine. If it is not profitable to mine, miners will drop out until the difficulty level falls enough that it becomes profitable again.
- konschubert 6y ago
  Importantly, with the reward being cut in half, difficulty should go down.
  - qorrect 6y ago
    Competition or difficulty ?
- insulanian 6y ago
  > TLDR: mining rewards should pretty much have no effect on BTC price Miners will want to cover the cost of mining, and to achieve that they will want to sell coins for higher price than they were selling it before for.
  - llamataboot 6y ago
    No, they can't sell it unless someone wants to buy it. Miners will either go out of business or get into the business until the difficulty level approaches whatever a marginal profit is above whatever the current price of BTC is
lalaland1125 6y ago
There is a quite a bit of incorrect economic analysis in this thread and elsewhere. In a rational market the halving should have no impact on the price of Bitcoin because it's a well known event that should have already been priced in. It's totally possible that the price might go up, but the reason for that rise would be the irrational behavior of other market participants and people should acknowledge that.
- TimTheTinker 6y ago
  Rational market - that's an oxymoron if I ever heard one. Yes, current prices include anticipated future events (or at least speculation on those events, as well as anticipated behavior of market participants based on those events, yada yada), to an extent. What prices can't anticipate is the behavior of market participants at any point in the future, much of which will be irrational; or the events in future history that may or may not trigger that behavior. Yes, there is alpha to be gained based on data collection/processing -- things like news, weather, twitter, satellite images of traffic or parking lots, etc. The more you know and can effectively analyze that other market participants don't know or can't effectively analyze, the better. But no one really knows the future, only what traders are statistically likely to do in the near future based on current events.
- sillysaurusx 6y ago
  rational market Perhaps this is glib, but it's worth remembering that bitcoin isn't a rational market. At no point in its history has the market reacted rationally to any event. It only appears rational in hindsight, if at all. But "rational" implies a causal link between an explanation and a subsequent event. Those explanations almost never turn out to be true.
  - economicslol 6y ago
    Is the actual market really any better? Seems a strange position to take.
    - enumjorge 6y ago
ur-whale 6y ago
For complete Bitcoin newbies, it is perhaps worth noting that while newsworthy, this event is not like an earthquake or a stock market crash as it does not come as a surprise to anyone: This event was (modulo + or - a month) pre-determined from the very first day bitcoin was launched (and so is the next halvening and the one after that).
iamharishsingh 6y ago
Is is safe to invest in bitcoin now?
- ExtraServings 6y ago
  as safe as it ever was
- haakon 6y ago
  It's never safe to invest in Bitcoin.
  - waiseristy 6y ago
    It probably more accurate to say that one gambles in Bitcoin
leorio 6y ago
for all the sceptics here, a good intro to bitcoin and money[1] https://medium.com/@vijayboyapati/the-bullish-case-for-bitcoin-6ecc8bdecc1 https://medium.com/@vijayboyapati/the-bullish-case-for-bitco...
- kiliantics 6y ago
  Except that it is now pretty well established that money was not preceded by barter, this was just a poorly conceived hypothesis of Adam Smith's which has no evidence to support it but which happened to catch on with economists
deleted 6y ago
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aazaa 6y ago
The page lists "Coinbase Transaction" in the quantity 7.15968084 BTC. The coinbase transaction is the first one listed in the block. It has no explicit payer, and can be valued up to/including the sum of: - the block's aggregate transaction fees - the block subsidy (6.25 BTC starting with block 630,000 today) There's some technically detailed information on coinbase transaction/money stock edge cases that have occurred over the years here: https://bitcoin.stackexchange.com/a/38998 https://bitcoin.stackexchange.com/a/38998 Also see this discussion of a jaw-dropping miscalculation of the block subsidy (even though dated April 1, it's for real): https://github.com/bitcoin/bips/blob/master/bip-0042.mediawiki https://github.com/bitcoin/bips/blob/master/bip-0042.mediawi...
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jameslevy 6y ago
Is there speculation regarding what miners will do instead of mining Bitcoin? For example, mining another cryptocurrency instead of Bitcoin? This would seem to have implications for the mining power for these altcoins, and perhaps implications for their prices as a result. I haven't seen any discussion about this.
- vmception 6y ago
  It balances itself out. a portion of the miners leave making it proportionally more profitable for the remaining miners, or they upgrade to more efficient hardware reducing their power costs to mine the same amount of bitcoin, or the price doubles, or a combination of all of the above. during some periods of time the price falls and it takes longer for all of that to happen, with existing miners being slowly replaced by more well capitalized miners
  - jameslevy 6y ago
    Sure, but presumably the miners leaving will still want to do something profitable with their mining equipment. I'd expect to see the hashrate increase for other PoW coins. Unless there's some reason for that not to happen.
    - vmception 6y ago
      There is a market for coins with the same hashing algorithm, specifically to attract miners that can't do anything on the bitcoin blockchain. They are all useless and don't have exchange rates to justify the electricity cost. You can launch a new one given the assumption that this is many miner's first halving. The price to yield to electrical cost market is pretty efficient, rarely a long lasting advantage there.
- DarthGhandi 6y ago
  Bitcoin miners have asics built to crunch sha256. There's not many alternatives to mine.
Mojah 6y ago
For anyone interested in the code behind the halving, I had some fun dissecting the GetBlockSubsidy() function that takes care of halving & ending of block subsidy [1]. It continues to amaze me that I struggle to set up a 5-node database cluster without one going out-of-sync or split-braining every few weeks, yet the bitcoin network manages to keep thousands of miners in-sync. This has to be the best example of eventual consistency in a production network. [1] https://ma.ttias.be/dissecting-code-bitcoin-halving/ https://ma.ttias.be/dissecting-code-bitcoin-halving/
- enether 6y ago
  This is why Blockchain is such an elegant solution to distributed consensus. I prefer calling it a distributed mechanism for emergent consensus. Consensus is not achieved explicitly - there is no election or fixed moment when consensus occurs. Instead, consensus is an emergent product of the asynchronous interaction of thousands of independent nodes, all following protocol rules.
tromp 6y ago
One of Bitcoin's main goals is to fix the unpredictable and arbitrary emission in fiat currencies. But its finite supply, said to be modeled after Gold's, is questionable. Gold may have a finite supply, but it's been mined for millenia and has slowly increased its supply rate over time, and will likely continue to do so in our lifetime. In contrast, Bitcoin's emission which ranges from 2009 through 2140 is heavily tilted to the first few years. Its final century from 2040 through 2140 accounts for only about 0.5% of emission. The only point of the halvings is to be able to claim "finite supply". A constant reward would still have the yearly supply inflation rate (stock to flow ratio) going to 0, albeit more slowly. So crucially, supply would still be scarce, would be more predictable (time independent), more fair to late adopters, and be much closer to Gold's emission over our lifetime. It would also avoid the inherent instability [1] of mining rewards dominated by transaction fees, and avoid lengthening confirmation times to maintain security against doublespending [2]. If we further consider the fact that coins inevitably get lost, then even a constant reward will yield a softcap of supply, where yearly emission merely serves to balance the yearly losses. Unfortunately, practically all cryptocurrencies subscribe to the notion that early miners must receive greater rewards, even when they often already enjoy lower difficulty. [1] https://www.cs.princeton.edu/~arvindn/publications/mining_CCS.pdf https://www.cs.princeton.edu/~arvindn/publications/mining_CC... [2] https://www.coindesk.com/the-halving-exposes-bitcoin-to-51-attacks-heres-what-we-can-do https://www.coindesk.com/the-halving-exposes-bitcoin-to-51-a...
- lisper 6y ago
  > The only point of the halvings is to be able to claim "finite supply" The irony is that no matter what you do there will only ever be a finite supply of any currency, fiat or otherwise. It's a finite universe, so "finite supply" is inherently imposed by the laws of physics. > practically all cryptocurrencies subscribe to the notion that early miners must receive greater rewards That's the real objective. Like all startups, cryptocurrencies want to encourage early adoption by, among other things, FOMO. If there is no benefit to being an early adopter, no one will adopt early, and if no one adopts early, you will never get to critical mass.
  - dnautics 6y ago
digitailor 6y ago
A critical relevant fact is missing to help explain this. It screws up currency analogies, and that may be why people have asked for clarification. Bitcoin (BTC) is classed by the US Federal Gov't (IRS) as property, not currency. That wasn't some kind of mistake or tax technicality on the IRS' part - a lot of analysis went into this in 2013, along with DHS and FinCEN. This is the definition for BTC in the US. That means what happened today could be described as: The first and oldest decentralized, distributed, cryptographically-secured record of digital property ownership (Bitcoin as a network) is producing cryptographic keys (the property, BTC) at half the rate it was yesterday. There is now less of the digital property (BTC) being created by the network daily, and this is due to an artificial scarcity strategy built into the Bitcoin source. Hope that helps
- strgcmc 6y ago
  Another way to analogize: imagine the westward expansion of the USA also being subject to "halvenings" like this. In years 0-9, settlers were encouraged/allowed to settle on 1000 miles worth of land (counting linearly westward), then years 10-19 only 500 miles further, than yes 20-29 only 250 miles further, etc. Early settlers are incentivized to grab large swathes of land quickly and cheaply, to get the system bootstrapped. Later settlers have to fight over smaller tracts of land, because after all the land is finite (you eventually reach the ocean). However, the land is also nicely divisible into smaller and smaller sub-plots, so units can be adjusted as needed. The rules by which this "westward expansion" are governed are written into the Bitcoin protocol. But unlike land and the ocean which are natural facts for the most part that we take for granted a priori, with Bitcoin the "border"/limit here is also defined as a theoretical construct (and hence, could theoretically be changed, but this would be a hard fork and people would have to reevaluate the value of a new network with a new set of boundaries/rules).
scottmsul 6y ago
HN discussions from past halvings: 2012 - https://news.ycombinator.com/item?id=4842947 https://news.ycombinator.com/item?id=4842947 2016 - https://news.ycombinator.com/item?id=12061618 https://news.ycombinator.com/item?id=12061618
- vmception 6y ago
  that is a treasure trove! the top comment on the 2012 one was about someone seriously concerned about the 2.8GB blockchain download to get started, and a debate about the scalability of bitcoin. since then: - light clients have been created. no mobile or desktop user worries about blocks, keeping only references to a few prior blocks. - merchant services which are full nodes use pruned clients, which mean their servers only use 25gb or so. (while the blockchain is 10 times larger) - compression of transactions have improved, so each tx takes up less space on the blockchain. - validation time of the blockchain is much faster, even if you have to download the whole thing from scratch - there is still a large and growing community of actually full nodes that do invest in the appropriate hardware for decentralization. - and mining full nodes and their pools have fierce competition to keep their constituent miners, continually distributing transaction validation even if the pool operator is just a centralized single full node.
  - shobith 6y ago
    - The haters have not changed their mind despite their hatred being addressed, they've moved on to other reasons. - Bitcoin continues to improve. On a serious note, that's a good summary, thank you!
    - vmception 6y ago
      Most of the criticisms seem to be around the -coin and -currency monikers, not noticing those are skeuomorphs. People get seem that it is an asset, but confuse themselves over its monetary branding instead of what people can and do with it. Many do then move the goal post to "there is no demand or intrinsic value", which may more easily retain durable consensus with them, even though most of the criticisms elevate this asset class to a standard higher than any individual asset class in existence. But still related to the exchange rate, instead of what people can and do with it.
Animats 6y ago
So what happened? Did the price go up or down? Bitcoin fans claims the price should go up. Conventional financial wisdom is that the price of something contains expected future events, so the price should remain the same.
- gjs278 6y ago
  lol the guy who thinks he is smarter than the bitcoin fans can’t figure out how to check the price. a 5 year old could do it.
X6S1x6Okd1st 6y ago
Anyone have any news on if any major miners have said if they are going to be switching away from BTC for the time being? As of 10 blocks past halving it doesn't look like total hash power has decreased much. It'll certainly be interesting to see if mining power drops off in the coming month. Long term I'd love to follow something that simply warns when there's enough rentable or assumed dark mining power that 51% attacks on bitcoin mainchain is a realistic threat.
banku_brougham 6y ago
What is the current rate of growth of bitcoin purchase transactions, preferable time series history?
ChrisArchitect 6y ago
the fact that I can't see a straight answer to the general question about 'what does this mean simply' or attempt at some clarity that isn't followed by some argument or pitch or slag off of something response is ridiculous and sums up the world of bitcoin
TheRealPomax 6y ago
I have no idea what that means, and the page itself is a ledger, not anything to explain what that means.
saltking112 6y ago
Can someone explain to the uninitiated what halving is?
- rantwasp 6y ago
  read: https://github.com/bitcoinbook/bitcoinbook https://github.com/bitcoinbook/bitcoinbook in a nutshell: miners group transactions into block (ie mine). whoever manages to form a block (you need to solve a computationally expensive problem that has the transactions you want to include as inputs) get a reward. up until today the reward was 12.5 bitcoins. Starting today it's half of that 6.25. speculations about what this means and where BTC is going follow from this.
hudon 6y ago
Why have a “halving” every four years, you may ask? Having a periodic “The Halvening” ritual every four years allows Bitcoiners to reconcile and forgive each other’s trespasses for one, it also gives Bitcoin a nice bump of attention in the media and on social media, and finally it gives the Bitcoin High Priests an opportunity during the ritual to re-iterate the Bitcoin Commandments (eg. “Thou shall worship fixed monetary supply” and “thou shall not worship other consensus rules”). All this strengthens the community, and thus, the consensus, and a strong consensus is part of the main selling point: to get filthy rich.
- shobith 6y ago
  I don't like Bananas. Instead of just not buying them at the grocery store and not eating them, I'll post a negative comment whenever someone mentions Bananas. Bananas are bad for you! Bananas suck! Bananas are a scam!
  - hudon 6y ago
    I’m providing a sociological hypothesis for something that people usually only provide technical explanations for. If you have a novel explanation for why Bananas are purchased that is unrelated to nutrition, it is worth sharing at least.
- jovial_cavalier 6y ago
  >Having a periodic "The Halvening" ritual every four years allows Bitcoiners to reconcile an dforgive each other's tresspasses You're going to have to elaborate on this. I don't understand how the adjustment of future mining rewards has anything to do with past "trespasses." >it also gives Bitcoin a nice bump of attention in the media It gives bitcoin negative media attention, because people on the outside will read the headline as "Bitcoin's value is cut in half," which is not the case.
  - hudon 6y ago
    1. All rituals have a reconciliatory nature, I think you’ll see this in many psychosocial models, (especially René Girard’s). Rituals like The Halvening distract from the hostility of conflict and gives rivals a chance to cooperate on something outside their relationship. “If you celebrate with me on this Halvening, I’ll forget that you brought up a fixed miner subsidy at the last Bitcoin Council Gathering”, that sort of thing. It’ll mostly be unsaid and subconscious. For specific examples of who is reconciling at this specific ritual, just look at this thread! Hundreds of comments from hundreds of strangers around the world, all coming together. 2. All press is good press! Another fact that supports the ritual hypothesis is the fact that this “event” has to be a big event every four years. Why not simply adjust down the reward at every block? Because then we’d have no ritual, and thus we’d have a weaker community.
bouncycastle 6y ago
Looks like it's a non-event. Ethereum launching their "ETH 2.0" and transitioning to staking will be a bigger event in the crypto space later this summer!
- kristianp 6y ago
  Ethereum POS has been coming soon for a long time. It would be good to see it happen.
StLCylone 6y ago
Where would the climate crisis be if we diverted all the energy spent on Bitcoin mining into carbon sequestration?
jovial_cavalier 6y ago
I don't understand why this is causing almost any movement in the markets at all. It's a predictable event, so everyone's position should already take it into account. Why would this introduce any volatility?
- Thorentis 6y ago
  Last I checked there wasn't really any movement at all. If anything, the price has dropped.
- sparkie 6y ago
  There are some things which aren't predictable, such as how many miners are going to drop out of the race given their potential revenue has just been chopped in half, with no corresponding doubling of the BTC/USD exchange rate. Some may be speculating that miners dropping out is bad for bitcoin because it reduces the security of the network and may give people weak hands if they're concerned that their money may not be as safe as previously assumed. Miners dropping out of the race would also release more mining hardware onto the markets at discounted prices, and some of it may go towards attempting to attack bitcoin. However, if you do the sums and work out how much it would cost to attempt and sustain such an attack, and how much can be gained from it, you quickly realize that such an attack would never be attempted for monetary gain - it is in the miner's best interest to play by the rules. The only other motive for attack is to cause temporary denial-of-service, at the expense of the miner, but this could only plausibly be conducted by a nation state due to the amount of work done in Bitcoin.
ivanstegic 6y ago
Could someone explain, in English, why this is a big deal?
ilyas121 6y ago
Btc breaks 35k by next halving (not maintains). Documenting this here so I remember to check back when I see the next halving up on HN board in 2024. Edit: Feel free to reply with your guesses (good as mine) for a good laugh in 4 years
Proven 6y ago
According to bitcoin experts, the price was supposed to go up due to increased scarcity and harder mining. Didn't happen. Its only use case is trade of other useless cryptocurencies.
decompiled_dev 6y ago
"Bitcoin is an experimental digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network." Seems like an successful experiment to me. I am excited to see what next gen tech in this space will bring.
mudlus 6y ago
Bitcoin now has a lower inflation rate than gold. It is likely that the main seller of Bitcoin from here on out will no longer be miners but exchanges.
hinkley 6y ago
What's the advantage of reducing it by 50% each year versus 30% every 6 months (51% a year)? Seems like the stepping function would be less severe.
- tim333 6y ago
  It's not that, it's every 210,000 blocks (approximately every four years). I guess Satoshi thought that would be a good schedule when the code was written. It must have been hard to see how the future would pan out.
corpMaverick 6y ago
ELI5 ?
Proven 6y ago
What's newsworthy isn't the halvening itself but the fact that halvening has completely failed to increase the price. Yesterday you could buy a coin for a bloated price of 8K. Today it takes twice as much work to make one but, but guess how much it costs to buy it... Yep, 8K. Until it drops to 4K and then some... Okay, so now that Bitcoin miners have to work twice as hard for the same amount of electricity, why would they? They wouldn't of course. Transaction fees are up in recent months, around $1 on average, which is good for the miners but doesn't exactly happen BTCs find any use. BTC is well past its prime.
Asuchug4 6y ago
Oh great, another site that servers machine translation of content. So I get "brownie" instead of "hash", that makes page so easier to understand. The only worse offender is the Google Play store, the autotranslated description actively prevents me from understanding app description.
fierarul 6y ago
BitCoin is such a big disappointment. From a global way of making micropayments it became a global multi level marketing pump and dump scheme. The true believers always told how BitCoin will be the one true saviour when shit hits the fan -- well, we are during a pandemic not seen in 100 years and BitCoin is basically irrelevant. There is no BitCoin economy, only people watching the BTCUSD sticker price because only the real economy matters. I'm also willing to bet the network resilience is not as high as techno folks want to believe and if some governments want it shutdown it will be pretty close to shut down and the FX rate will go towards $0. In many ways BitCoin is not an anti-globalist or anti-anything response. It is a product that exists due to globalization. And the high prices are a result of some economic stability and prosperity that allowed the population to play with shiny things. The coming depression will put an end to such trivialities.
EXO1 6y ago
w
EXO1 6y ago
TT
runeks 6y ago
Regarding a potential impact on the bitcoin price, consider that — assuming miners sell their mined bitcoins for dollars to pay for hardware and electricity — now only 6.25 BTC per 10 minutes will be sold into the market because of the halving. That’s a reduction in the amount of bitcoin sold into the market every 24 hours of roughly $8m. I believe this is the theory behind expecting a price increase. Whether or not it materializes time will tell.

541 points by 3ds 6y ago

nikivi 6y ago

Would it mean there would be less interest in mining bitcoin (and thus 'wasting' electricity)?

X6S1x6Okd1st 6y ago
Only if mining has hit an equilibrium where it's entirely price dependent. If mining is constrained by supply (either of sufficiently cheap energy or of miners) then we wouldn't see a drop. Fees are still not near dominating the rewards so we do expect to see miner revenue drop due to this.
- nikivi 6y ago
  But there will be a point in future where mining no longer would make sense? Curious if there are any projections when that is expected to happen.
  - lftl 6y ago
    Presumably fees will rise at that point to making profitable enough to move transactions.
    - fiter 6y ago
      While I can understand the presumption that fees will rise to make it profitable to move transactions, is there any simple market mechanism for making sure transactions move safely? A slow continuous drop in hash rate could result in the network being more vulnerable to attacks.
  - GuB-42 6y ago
    As long a s Bitcoin has value, mining will always make sense. First thing, even if the block reward is zero, there are still transactions fees. We are not here yet but they are expected to be the primary motivation in the future. Second, difficulty scale proportionally to the global mining power so that one block is mined every 10 minutes or so. As rewards decrease, the most expensive mining operations will shut down, keeping the cheaper ones profitable. An equilibrium will be found. The last point is a problem as it makes the network more centralized, potentially allowing for 51% attacks.
  - X6S1x6Okd1st 6y ago
    Depends entirely on your operating cost and expected return. We know that the expected return from newly minted bitcoins will reach zero at some point in the future. We don't know if expected return from tx/fees will ever hit zero. TBH if it ever got back to the point where I could mine a block every couple weeks with a GPU, and I had access to a GPU, power source and internet connect I'd probably start mining again. IMO Bitcoin exists as an interesting and historical concept in too many people's minds for mining to ever stop. The real worry would be that mining drops off to the point where 51% attacks are viable on the bitcoin mainnet. We'd potentially see that if many large miners either started renting out their services to the highest bidder or sold all their miners. Once we see more hashpower for rent or purchase than goes into honest mining we have the potential for a 51% attack.
PopeDotNinja 6y ago
Tommorow it will cost twice as much to mine the same amount of Bitcoin that you would have mined yesterday (I think).
- lozf 6y ago
  Well, the cost stays the same, but the reward is halved -- so yes the effect is similar to each costing double, but that's not really precise. It's better to consider it as miners subscribe to a lottery (for the cost of their electricity). Roughly every 10 minutes someone wins that "block". Yesterday the reward for winning was 12.5 BTC per block, and now it's 6.25... the cost of entering hasn't changed. There's more to it of course, e.g. as the difficulty adjusts as in line with the hashrate on the network, but lagged by roughly a couple of weeks worth of blocks being mined. Fees in any given block vary, which are added to the block reward. Many miners pool rosources and each share a fraction of the reward. Etc.
kinghajj 6y ago
I'd assume any miners who cannot profitably operate with the new block reward * price would stop, but a decrease of new supply should cause some increase in price too.
- GhostVII 6y ago
  I don't think we should expect an increase in price given that the halvening is well know and predictable. It should be priced in, if anything I think it would be overvalued because of it since lots of people are buying in because they expect a spike in price.
new2628 6y ago
No need for quotes, it is an absolute waste of energy and effort on a planetary scale with no benefit whatsoever.
- new2628 6y ago
  Vote away, hurt bitcoiners. EDIT: sorry for the silly remark, ironically, the original comment stands at +10 at the moment after starting deep in the negative.
  - kinghajj 6y ago
    Only this comment, since it's so immature.
- banachtarski 6y ago
  It's an "extreme statement" but to be honest, I'm inclined to agree. As a currency, it's an absolute failure. Far too volatile, illiquid, and unregulated to be even remotely usable/reliable. As for everything else? It's still looking for a "solution" that isn't just something hype driven.
  - 535188B17C93743 6y ago
    Unfortunately, its technology (or maybe the combo of its popularity and technology) never really allowed for it to become anything but a speculative asset.
  - nikivi 6y ago
    Do you have any thoughts on what would make a better cryptocurrency? Either in the works and what works already? Perhaps things like Cardano (https://www.cardano.org https://www.cardano.org) or Polkadot (https://polkadot.network https://polkadot.network) are better?
- wyldfire 6y ago
  > no benefit whatsoever Clearly, the benefits for any energy consumption should be seen from the point of view of the consumer. They wouldn't do it if it were of no benefit. It would be more fair for you to describe the distributed ledger clearing as of no value to you. Because it definitely has a value to some folks. That said: some other cryptocoins do indeed provide a ledger like bitcoin, still decentralized and trustless, but without mining (and without block rewards).
EthanHeilman 6y ago
Conventional wisdom says no, decreases in the national currency value of bitcoin would reduce interest, but the halvening won't. The reason why is that electricity for mining is priced in national currency, so interest in mining bitcoins depends on a miners future expectation of the value of bitcoin price in national currency when they sell the bitcoins to pay the electricity bill. The current wisdom is that the halvening decreases the amount of bitcoin that miners receive while increasing the USD value of bitcoin because it decreases market supply and the perception of market supply.
- lultimouomo 6y ago
  But halvening happens on a fixed schedule, so all future halvenings are already priced in the value of Bitcoin in national currency. So if you get half the bitcoins for mining, ceteris paribus you are getting half the dollars.
  - EthanHeilman 6y ago
    I agree if you assume all future halvenings are priced in. It has been claimed that there is a relationship between halvenings in the past and in increases in the price of Bitcoin. If true this would suggest that at least in the past halvenings are not priced in.
ufmace 6y ago
It's a disincentive towards mining bitcoin, yes. However, everybody knew this was coming now, so any competent mining operator should have already accounted for it in their financial/business planning.
nas 6y ago
Likely yes but it depends on the Bitcoin price. The amount "wasted" (i.e. securing distributed ledger against attacks, providing difficult to fake notary service for transactions) is dependent on block rewards and fees. Since the block reward makes up most of that and has now been halved, you should expect less resources being put into mining (i.e. unprofitable miners will turn off their machines). If the price of Bitcoin now doubles presumably no miners will be turning off their machines. If it doesn't double, some fraction of all mining setups just became unprofitable.
GhostVII 6y ago
For all Bitcoin miners to be profitable, the global reward for mining Bitcoin must be less than the global cost. Since the reward has now halved, I think the electricity spend should also drop by half, but this may already be accounted for since miners have known about the halvening for a while and should have reduced capacity accordingly already.
- jcranmer 6y ago
  > Since the reward has now halved, I think the electricity spend should also drop by half I doubt that. Look at the recent oil production issues: despite demand falling off a cliff, and the price of oil following it, production (supply) hasn't dropped anywhere near enough to match the fall in demand. It's basically a game of chicken--keep going at full force, eating your losses, in the hopes that your competitors are weaker and will be forced to fold before you will.

trynewideas 6y ago

MarketWatch: https://www.marketwatch.com/story/what-is-the-bitcoin-halving-and-which-day-does-it-happen-2020-05-11 https://www.marketwatch.com/story/what-is-the-bitcoin-halvin... What is the halving or halvening? The event is known as the “halving” or “halvening,” and occurs every four years, where the rewards for those who support bitcoin are slashed, quite literally, in half. So-called bitcoin miners expend tremendous amounts of computing power to verify transactions and link them, digitally into a block, hence the term blockchain. Miners on the blockchain — the digital ledger technology that underpins the currency — receive a precise number of bitcoins for their efforts in solving a complex puzzle. That computing effort is at the very heart of the digital currency that was created 11 years ago by a person, or persons, identifying themselves as Satoshi Nakamoto.

llarsson 6y ago
What does that mean in even plainer English? Is Bitcoin now half as valuable? Did mining it get easier/harder? Less profitable to mine, but existing Bitcoins still have same value as before?
- searchableguy 6y ago
  mining it will result in half the reward.
  - llarsson 6y ago
    But existing Bitcoin still have the same value? Does this mean the end of businesses that seemed to exist only to mine using custom computers and GPUs? Because their revenue stream has been cut in half?
    - ur-whale 6y ago
      The event will not exactly come as a surprise for the miners: the date was more or less built-in the bitcoin algorithm from day one. If it means the end of their business, it means their planning was fairly poor.

101404 6y ago

So?

unhashable 6y ago
Miners block rewards will be reduced in half from 12.24 BTC to 6.12. In theory this reduces overall sell pressure on BTC in a key time when Bitcoin's narrative is maturing and adoption is moving forward with institutions. When Central Banks throughout the world are printing unlimited fiat, there is no better time to hold the universe's scarcest asset.
- krustyburger 6y ago
  Calling Bitcoin the universe’s scarcest asset is laughable. Leaving aside the hyperbole of invoking the “universe” to rank the scarcity of something terrestrial, there are many conventional assets that are scarcer than Bitcoin, like Picasso paintings or mansions in Bel Air. Lastly, Bitcoin is not even the” scarcest” cryptocurrency. Even if you stand to gain if Bitcoin’s price increases, you should not be trying to generate hype for it here on HN.
  - lgl 6y ago
    This! Also ironic that the currency that would ideologically only bring benefits to the unbanked is now largely held and controlled by bank-like institutions and the crypto equivalent of the top 0.1% since most bitcoin is held in a very small amount of wallets. Its premise is now basically to replace one shitty system for another shitty system but one that's unregulated and powered by memes and waste of electricity.
  - leorio 6y ago
    scarcity is determined by demand not supply.
    - krustyburger 6y ago
      It is literally the difference between supply and demand and is determined by both.

chrisshroba 6y ago

Will this likely increase typical transaction fees to make up for block reward?

ur-whale 6y ago
Transaction fees follow supply and demand for blockchain space. They haven't been correlated to block reward AFAIK.
miguelmota 6y ago
Transaction fees are driven by transaction volume. The more congested the network, the higher fees will be because there's a limit to how many transactions can fit in a block. If there's normal transaction volume on the network then transaction fees will remain the same. Miners can choose to reject any transactions but equally they'll also be miners who accept any transaction.
- empath75 6y ago
  At zero block reward, who pays for mining?
  - kinghajj 6y ago
    Transaction fees.
  - deleted 6y ago
    [deleted]
ajkdhcb2 6y ago
In the long term yes the halving schedule must lead to huge fees (eventually there will be zero inflation). As inflation decreases, miners have to be paid by fees to secure the network. Otherwise the security collapses.
- gridlockd 6y ago
  The fees are paid by the users of the network, if the demand on network transactions is low, there will be little reward for mining. This means that without sufficient demand for transactions, a majority of miners would have to abandon the network, which would indeed put network security at risk. Therefore I predict that the miners will make the supply of Bitcoin unlimited, should that situation occur. They already got their way with keeping the Bitcoin block size fixed, which kept transaction fees high.

liquidify 6y ago

Miners will now receive 6.25 bitcoins per block.

535188B17C93743 6y ago

The crusade will continue on. Many folks whom have bought into BTC at this point know very little about its technology. Not sure if that's a good or a bad thing...

k00b 6y ago
It's a good thing only if it indicates the UX is getting better.
rabbitonrails 6y ago
"who have bought into BTC"

andrewla 6y ago

If you're wondering why your friends who are into cryptocurrency are in a tizzy, it's related to a model called "Stock-To-Flow" that attempts to post-facto explain the price of Bitcoin (and other liquid assets, like gold) in terms of the rate of production. Proposed by PlanB [1] it is a source of constant derision/hope/skepticism/dismissal by the Bitcoin community, and the halving of the reward gives it its first non-backtested novel prediction. Roughly it predicts [2] that the price will settle into a band around 30,000 USD sometime next year. [1] https://twitter.com/100trillionUSD https://twitter.com/100trillionUSD [2] https://cointelegraph.com/news/bitcoin-halving-will-be-make-or-break-for-stock-to-flow-model-planb https://cointelegraph.com/news/bitcoin-halving-will-be-make-...

artursapek 6y ago
Shameless plug: you can plot the price of BTC along with the "Stock-to-Flow" model in real time on Cryptowatch! https://share.cryptowat.ch/charts/bqsr58eein8u9uevh370-kraken-btcusd.png https://share.cryptowat.ch/charts/bqsr58eein8u9uevh370-krake... https://twitter.com/cryptowat_ch/status/1253335480256483330 https://twitter.com/cryptowat_ch/status/1253335480256483330
- simias 6y ago
  Not only is the width of that purple region absolutely ridiculous, it doesn't even manage to match the actual data. I'm not exactly convinced.
  - artursapek 6y ago
    You can configure it by # of std deviations, or remove it entirely. Thanks for meeting the stereotype of "asshole HN commentator" I appreciate your feedback
  - dang 6y ago
    Please don't be a jerk on HN. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
6y ago

k00b 6y ago

Coinbase transaction message in last mined block with 12.5 BTC subsidy: "NYTimes 09/Apr/2020 With $2.3T Injection, Fed's Plan Far Exceeds 2008 Rescue" https://blockchair.com/bitcoin/block/629999 https://blockchair.com/bitcoin/block/629999

arcticbull 6y ago
Ooh! Ask them about Tether! And how all the worlds crypto prices are in USDT, which is at most 70% backed (30% seized by the feds in a money laundering sting) and has never been audited.
- seibelj 6y ago
  You grind this axe in literally every crypto thread, it's getting very stale. Yes, you hate Bitcoin, we get it!
  - liquidify 6y ago
    He is right. Tether is completely messed up.
    - seibelj 6y ago
      No one puts a gun to anyone's head to use it. There are many stablecoins now, with various properties. USDC trades at the same value as USDT https://www.circle.com/en/usdc https://www.circle.com/en/usdc Traders value Bitcoin the same in USDT or USDC, and USDT / USDC trades at parity. That implies the market trusts USDT. It doesn't matter what people on HN say, as long as the market agrees.
      - arcticbull 6y ago
        Frankly it's really strange to hear on the one hand: 1. ...that "the feds are debasing our currency through their relentless printing" It is producing a measured, consistent, relatively small 2% rate of inflation over decades and decades. They are of course acting on behalf of an elected body, and ultimately accountable to that body. They're also audited. 2. ...that Tether's relentless, un-audited, 70%-at-most backed printing is fine because the "market trusts it" and "nobody's forcing you to use it." The market trusts it because number go up, and it's in the interest of exactly zero market participants to show the world the emperor has no clothes. It's also not fair to say that "nobody's forced to use it" when everyone is forced to use it. In 2018, 80% of all crypto exchange transactions were conducted in Tether. That makes USD transactions by far the minority. Since arbitrage bots keep the prices in sync, and the majority is USDT, even the USD exchanges follow the USDT prices so long as there exists sufficient liquidity to balance the books. [1] [1] https://www.wsj.com/articles/the-mystery-behind-tether-the-crypto-worlds-digital-dollar-1534089601 https://www.wsj.com/articles/the-mystery-behind-tether-the-c...

empath75 6y ago

So, pre halvening -- the average block reward was worth about $100,000. Fees totaled about $5,000. I don't really understand the economics of this, but it seems there are a few possible outcomes: A) Prices double because miners refuse to sell at a price that gives them less than $100k a block and demand for coins is inelastic. B) Fees go up 10x because miners now need to make $50k in transaction fees instead of $5k per block to make up for the lower block reward, and demand for transactions in inelastic. C) Difficulty and prices drop because neither transaction demand nor coin demand is inelastic, and miners will begin turning off rigs that are no longer profitable at $50k per block. D) Some combination of the above.

rantwasp 6y ago
you should consider what the price to mine is vs the reward. as long as the reward > price to mine, the miners will keep mining. once it drops, you will either have miners dropping off the networks or the difficulty decreasing until another equilibrium is reached. once you have less miners it's possible that the TX fees will increase if you want your transactions mined (the miners cannot really impose a transaction fee. it's the transactions with the highest fees that get mined into a block and incorporated into the block chain)
- empath75 6y ago
  in a free market, the price for any commodity should roughly track the cost of producing it.
  - rantwasp 6y ago
    you're working with the assumption that it's a commodity. It's more like a currency than a commodity. also, is the price of gold for example really tracking the cost of producing it?
    - empath75 6y ago
      Either side of that equation can lead — if the price of gold rises from speculators, miners will start employing costlier means of extracting the metal to meet demand.

masteranza 6y ago

Predicted by Luboš: https://motls.blogspot.com/2020/05/may-11th-12th-could-be-great-days-to.html https://motls.blogspot.com/2020/05/may-11th-12th-could-be-gr...

jameslevy 6y ago
Everyone thinking this seems to have resulted in it happening a couple days early. It's not yet clear whether today or tomorrow is a good time to short BTC.

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ur-whale 6y ago

Interesting to see what will happen to Bitcoin which slashed the supply in half exactly at a time when major currencies have fully open the supply floodgates because of Covid-19. If the law of supply of demand carries any predictive power, BTC should see a compounded rise.

nas 6y ago
It will be interesting. The amount of fiat money being created right now is a bit crazy. Whether that is "good for Bitcoin" is not entirely clear. Bitcoin has failed to live up to initial hopes. Transaction fees are too high and throughput (transactions per second) is too low. In a way, it is victim of its own success, at least in terms of price per coin. The second layer protocols, like Lighting, were supposed to solve the fee and throughput problems. I've played with Lighting and when it works, it is amazing. However, it far from a simple and polished user experience. Maybe they will eventually get there. Or, maybe people will give up waiting.
economicslol 6y ago
The supply isn't changing, only the rewards for mining are.

mrunkel 6y ago

Does anybody actually use bitcoin? And by use I mean transact actual business, and not just speculate. You know, buying and selling real world goods and services. Or is it like gold reserves, people just hoard these digital numbers until they are ready to cash out. I'm really curious for the hoarders, if they're doing it as a hedge against global financial collapse, how exactly do they expect to redeem their bitcoin for anything tangible? These are serious questions, I've given bitcoin only a minimum of thought. It seems a great way to move value out of a closed economy like China, or for drug dealers to move cash across borders, but who else uses it?

cblackthornekc 6y ago
I used some of the lumens that I got through keybase. Mostly because I was buying something online and saw crypto as a payment option. But out of all the people I know with crypto, they treat them like potions in Skyrim. One day, I'll need all of these different coins. Until then I'll just hold them in my wallet.
liquidify 6y ago
No, the maintainers have purposely neutered its usability in favor of it becoming a "digital gold" or a "digital reserve". Fees are far to high for common uses, and this is entirely intentional. If you are looking for usable crypto currencies, you should look at Ethereum, Bitcoin Cash, Monero, or many others who have set up their chains to accommodate actual day to day use.
- sillysaurusx 6y ago
  Isn't it a myth that fees are too high? $0.05 seems to get you in and verified within an hour, if I remember correctly.
  - dangwu 6y ago
    Waiting more than a few minutes eliminates all in-person, food delivery, and probably most same-day delivery transactions. Who’s going to wait an hour for the purchase to go through for an Uber Eats or Prime Now delivery?

llamataboot 6y ago

TLDR: mining rewards should pretty much have no effect on BTC price We're years into bitcoin and I feel that people still don't understand the basic premise that with an adjusting difficulty it literally doesn't matter how many people want to mine. Difficulty will adjust to about the break even point for miners that can run at scale (likely in a place with cheap electricity). The price of bitcoin is still based on supply and demand for bitcoin. Whatever THAT clearing price is will determine whether or not it is profitable to mine. If it is not profitable to mine, miners will drop out until the difficulty level falls enough that it becomes profitable again.

konschubert 6y ago
Importantly, with the reward being cut in half, difficulty should go down.
- qorrect 6y ago
  Competition or difficulty ?
insulanian 6y ago
> TLDR: mining rewards should pretty much have no effect on BTC price Miners will want to cover the cost of mining, and to achieve that they will want to sell coins for higher price than they were selling it before for.
- llamataboot 6y ago
  No, they can't sell it unless someone wants to buy it. Miners will either go out of business or get into the business until the difficulty level approaches whatever a marginal profit is above whatever the current price of BTC is

lalaland1125 6y ago

There is a quite a bit of incorrect economic analysis in this thread and elsewhere. In a rational market the halving should have no impact on the price of Bitcoin because it's a well known event that should have already been priced in. It's totally possible that the price might go up, but the reason for that rise would be the irrational behavior of other market participants and people should acknowledge that.

TimTheTinker 6y ago
Rational market - that's an oxymoron if I ever heard one. Yes, current prices include anticipated future events (or at least speculation on those events, as well as anticipated behavior of market participants based on those events, yada yada), to an extent. What prices can't anticipate is the behavior of market participants at any point in the future, much of which will be irrational; or the events in future history that may or may not trigger that behavior. Yes, there is alpha to be gained based on data collection/processing -- things like news, weather, twitter, satellite images of traffic or parking lots, etc. The more you know and can effectively analyze that other market participants don't know or can't effectively analyze, the better. But no one really knows the future, only what traders are statistically likely to do in the near future based on current events.
sillysaurusx 6y ago
rational market Perhaps this is glib, but it's worth remembering that bitcoin isn't a rational market. At no point in its history has the market reacted rationally to any event. It only appears rational in hindsight, if at all. But "rational" implies a causal link between an explanation and a subsequent event. Those explanations almost never turn out to be true.
- economicslol 6y ago
  Is the actual market really any better? Seems a strange position to take.
  - enumjorge 6y ago

ur-whale 6y ago

For complete Bitcoin newbies, it is perhaps worth noting that while newsworthy, this event is not like an earthquake or a stock market crash as it does not come as a surprise to anyone: This event was (modulo + or - a month) pre-determined from the very first day bitcoin was launched (and so is the next halvening and the one after that).

iamharishsingh 6y ago

Is is safe to invest in bitcoin now?

ExtraServings 6y ago
as safe as it ever was
haakon 6y ago
It's never safe to invest in Bitcoin.
- waiseristy 6y ago
  It probably more accurate to say that one gambles in Bitcoin

leorio 6y ago

for all the sceptics here, a good intro to bitcoin and money[1] https://medium.com/@vijayboyapati/the-bullish-case-for-bitcoin-6ecc8bdecc1 https://medium.com/@vijayboyapati/the-bullish-case-for-bitco...

kiliantics 6y ago
Except that it is now pretty well established that money was not preceded by barter, this was just a poorly conceived hypothesis of Adam Smith's which has no evidence to support it but which happened to catch on with economists

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aazaa 6y ago

The page lists "Coinbase Transaction" in the quantity 7.15968084 BTC. The coinbase transaction is the first one listed in the block. It has no explicit payer, and can be valued up to/including the sum of: - the block's aggregate transaction fees - the block subsidy (6.25 BTC starting with block 630,000 today) There's some technically detailed information on coinbase transaction/money stock edge cases that have occurred over the years here: https://bitcoin.stackexchange.com/a/38998 https://bitcoin.stackexchange.com/a/38998 Also see this discussion of a jaw-dropping miscalculation of the block subsidy (even though dated April 1, it's for real): https://github.com/bitcoin/bips/blob/master/bip-0042.mediawiki https://github.com/bitcoin/bips/blob/master/bip-0042.mediawi...

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jameslevy 6y ago

Is there speculation regarding what miners will do instead of mining Bitcoin? For example, mining another cryptocurrency instead of Bitcoin? This would seem to have implications for the mining power for these altcoins, and perhaps implications for their prices as a result. I haven't seen any discussion about this.

vmception 6y ago
It balances itself out. a portion of the miners leave making it proportionally more profitable for the remaining miners, or they upgrade to more efficient hardware reducing their power costs to mine the same amount of bitcoin, or the price doubles, or a combination of all of the above. during some periods of time the price falls and it takes longer for all of that to happen, with existing miners being slowly replaced by more well capitalized miners
- jameslevy 6y ago
  Sure, but presumably the miners leaving will still want to do something profitable with their mining equipment. I'd expect to see the hashrate increase for other PoW coins. Unless there's some reason for that not to happen.
  - vmception 6y ago
    There is a market for coins with the same hashing algorithm, specifically to attract miners that can't do anything on the bitcoin blockchain. They are all useless and don't have exchange rates to justify the electricity cost. You can launch a new one given the assumption that this is many miner's first halving. The price to yield to electrical cost market is pretty efficient, rarely a long lasting advantage there.
DarthGhandi 6y ago
Bitcoin miners have asics built to crunch sha256. There's not many alternatives to mine.

Mojah 6y ago

For anyone interested in the code behind the halving, I had some fun dissecting the GetBlockSubsidy() function that takes care of halving & ending of block subsidy [1]. It continues to amaze me that I struggle to set up a 5-node database cluster without one going out-of-sync or split-braining every few weeks, yet the bitcoin network manages to keep thousands of miners in-sync. This has to be the best example of eventual consistency in a production network. [1] https://ma.ttias.be/dissecting-code-bitcoin-halving/ https://ma.ttias.be/dissecting-code-bitcoin-halving/

enether 6y ago
This is why Blockchain is such an elegant solution to distributed consensus. I prefer calling it a distributed mechanism for emergent consensus. Consensus is not achieved explicitly - there is no election or fixed moment when consensus occurs. Instead, consensus is an emergent product of the asynchronous interaction of thousands of independent nodes, all following protocol rules.

tromp 6y ago

One of Bitcoin's main goals is to fix the unpredictable and arbitrary emission in fiat currencies. But its finite supply, said to be modeled after Gold's, is questionable. Gold may have a finite supply, but it's been mined for millenia and has slowly increased its supply rate over time, and will likely continue to do so in our lifetime. In contrast, Bitcoin's emission which ranges from 2009 through 2140 is heavily tilted to the first few years. Its final century from 2040 through 2140 accounts for only about 0.5% of emission. The only point of the halvings is to be able to claim "finite supply". A constant reward would still have the yearly supply inflation rate (stock to flow ratio) going to 0, albeit more slowly. So crucially, supply would still be scarce, would be more predictable (time independent), more fair to late adopters, and be much closer to Gold's emission over our lifetime. It would also avoid the inherent instability [1] of mining rewards dominated by transaction fees, and avoid lengthening confirmation times to maintain security against doublespending [2]. If we further consider the fact that coins inevitably get lost, then even a constant reward will yield a softcap of supply, where yearly emission merely serves to balance the yearly losses. Unfortunately, practically all cryptocurrencies subscribe to the notion that early miners must receive greater rewards, even when they often already enjoy lower difficulty. [1] https://www.cs.princeton.edu/~arvindn/publications/mining_CCS.pdf https://www.cs.princeton.edu/~arvindn/publications/mining_CC... [2] https://www.coindesk.com/the-halving-exposes-bitcoin-to-51-attacks-heres-what-we-can-do https://www.coindesk.com/the-halving-exposes-bitcoin-to-51-a...

lisper 6y ago
> The only point of the halvings is to be able to claim "finite supply" The irony is that no matter what you do there will only ever be a finite supply of any currency, fiat or otherwise. It's a finite universe, so "finite supply" is inherently imposed by the laws of physics. > practically all cryptocurrencies subscribe to the notion that early miners must receive greater rewards That's the real objective. Like all startups, cryptocurrencies want to encourage early adoption by, among other things, FOMO. If there is no benefit to being an early adopter, no one will adopt early, and if no one adopts early, you will never get to critical mass.
- dnautics 6y ago

digitailor 6y ago

A critical relevant fact is missing to help explain this. It screws up currency analogies, and that may be why people have asked for clarification. Bitcoin (BTC) is classed by the US Federal Gov't (IRS) as property, not currency. That wasn't some kind of mistake or tax technicality on the IRS' part - a lot of analysis went into this in 2013, along with DHS and FinCEN. This is the definition for BTC in the US. That means what happened today could be described as: The first and oldest decentralized, distributed, cryptographically-secured record of digital property ownership (Bitcoin as a network) is producing cryptographic keys (the property, BTC) at half the rate it was yesterday. There is now less of the digital property (BTC) being created by the network daily, and this is due to an artificial scarcity strategy built into the Bitcoin source. Hope that helps

strgcmc 6y ago
Another way to analogize: imagine the westward expansion of the USA also being subject to "halvenings" like this. In years 0-9, settlers were encouraged/allowed to settle on 1000 miles worth of land (counting linearly westward), then years 10-19 only 500 miles further, than yes 20-29 only 250 miles further, etc. Early settlers are incentivized to grab large swathes of land quickly and cheaply, to get the system bootstrapped. Later settlers have to fight over smaller tracts of land, because after all the land is finite (you eventually reach the ocean). However, the land is also nicely divisible into smaller and smaller sub-plots, so units can be adjusted as needed. The rules by which this "westward expansion" are governed are written into the Bitcoin protocol. But unlike land and the ocean which are natural facts for the most part that we take for granted a priori, with Bitcoin the "border"/limit here is also defined as a theoretical construct (and hence, could theoretically be changed, but this would be a hard fork and people would have to reevaluate the value of a new network with a new set of boundaries/rules).

scottmsul 6y ago

HN discussions from past halvings: 2012 - https://news.ycombinator.com/item?id=4842947 https://news.ycombinator.com/item?id=4842947 2016 - https://news.ycombinator.com/item?id=12061618 https://news.ycombinator.com/item?id=12061618

vmception 6y ago
that is a treasure trove! the top comment on the 2012 one was about someone seriously concerned about the 2.8GB blockchain download to get started, and a debate about the scalability of bitcoin. since then: - light clients have been created. no mobile or desktop user worries about blocks, keeping only references to a few prior blocks. - merchant services which are full nodes use pruned clients, which mean their servers only use 25gb or so. (while the blockchain is 10 times larger) - compression of transactions have improved, so each tx takes up less space on the blockchain. - validation time of the blockchain is much faster, even if you have to download the whole thing from scratch - there is still a large and growing community of actually full nodes that do invest in the appropriate hardware for decentralization. - and mining full nodes and their pools have fierce competition to keep their constituent miners, continually distributing transaction validation even if the pool operator is just a centralized single full node.
- shobith 6y ago
  - The haters have not changed their mind despite their hatred being addressed, they've moved on to other reasons. - Bitcoin continues to improve. On a serious note, that's a good summary, thank you!
  - vmception 6y ago
    Most of the criticisms seem to be around the -coin and -currency monikers, not noticing those are skeuomorphs. People get seem that it is an asset, but confuse themselves over its monetary branding instead of what people can and do with it. Many do then move the goal post to "there is no demand or intrinsic value", which may more easily retain durable consensus with them, even though most of the criticisms elevate this asset class to a standard higher than any individual asset class in existence. But still related to the exchange rate, instead of what people can and do with it.

Animats 6y ago

So what happened? Did the price go up or down? Bitcoin fans claims the price should go up. Conventional financial wisdom is that the price of something contains expected future events, so the price should remain the same.

gjs278 6y ago
lol the guy who thinks he is smarter than the bitcoin fans can’t figure out how to check the price. a 5 year old could do it.

X6S1x6Okd1st 6y ago

Anyone have any news on if any major miners have said if they are going to be switching away from BTC for the time being? As of 10 blocks past halving it doesn't look like total hash power has decreased much. It'll certainly be interesting to see if mining power drops off in the coming month. Long term I'd love to follow something that simply warns when there's enough rentable or assumed dark mining power that 51% attacks on bitcoin mainchain is a realistic threat.

banku_brougham 6y ago

What is the current rate of growth of bitcoin purchase transactions, preferable time series history?

ChrisArchitect 6y ago

the fact that I can't see a straight answer to the general question about 'what does this mean simply' or attempt at some clarity that isn't followed by some argument or pitch or slag off of something response is ridiculous and sums up the world of bitcoin

TheRealPomax 6y ago

I have no idea what that means, and the page itself is a ledger, not anything to explain what that means.

saltking112 6y ago

Can someone explain to the uninitiated what halving is?

rantwasp 6y ago
read: https://github.com/bitcoinbook/bitcoinbook https://github.com/bitcoinbook/bitcoinbook in a nutshell: miners group transactions into block (ie mine). whoever manages to form a block (you need to solve a computationally expensive problem that has the transactions you want to include as inputs) get a reward. up until today the reward was 12.5 bitcoins. Starting today it's half of that 6.25. speculations about what this means and where BTC is going follow from this.

hudon 6y ago

Why have a “halving” every four years, you may ask? Having a periodic “The Halvening” ritual every four years allows Bitcoiners to reconcile and forgive each other’s trespasses for one, it also gives Bitcoin a nice bump of attention in the media and on social media, and finally it gives the Bitcoin High Priests an opportunity during the ritual to re-iterate the Bitcoin Commandments (eg. “Thou shall worship fixed monetary supply” and “thou shall not worship other consensus rules”). All this strengthens the community, and thus, the consensus, and a strong consensus is part of the main selling point: to get filthy rich.

shobith 6y ago
I don't like Bananas. Instead of just not buying them at the grocery store and not eating them, I'll post a negative comment whenever someone mentions Bananas. Bananas are bad for you! Bananas suck! Bananas are a scam!
- hudon 6y ago
  I’m providing a sociological hypothesis for something that people usually only provide technical explanations for. If you have a novel explanation for why Bananas are purchased that is unrelated to nutrition, it is worth sharing at least.
jovial_cavalier 6y ago
>Having a periodic "The Halvening" ritual every four years allows Bitcoiners to reconcile an dforgive each other's tresspasses You're going to have to elaborate on this. I don't understand how the adjustment of future mining rewards has anything to do with past "trespasses." >it also gives Bitcoin a nice bump of attention in the media It gives bitcoin negative media attention, because people on the outside will read the headline as "Bitcoin's value is cut in half," which is not the case.
- hudon 6y ago
  1. All rituals have a reconciliatory nature, I think you’ll see this in many psychosocial models, (especially René Girard’s). Rituals like The Halvening distract from the hostility of conflict and gives rivals a chance to cooperate on something outside their relationship. “If you celebrate with me on this Halvening, I’ll forget that you brought up a fixed miner subsidy at the last Bitcoin Council Gathering”, that sort of thing. It’ll mostly be unsaid and subconscious. For specific examples of who is reconciling at this specific ritual, just look at this thread! Hundreds of comments from hundreds of strangers around the world, all coming together. 2. All press is good press! Another fact that supports the ritual hypothesis is the fact that this “event” has to be a big event every four years. Why not simply adjust down the reward at every block? Because then we’d have no ritual, and thus we’d have a weaker community.

bouncycastle 6y ago

Looks like it's a non-event. Ethereum launching their "ETH 2.0" and transitioning to staking will be a bigger event in the crypto space later this summer!

kristianp 6y ago
Ethereum POS has been coming soon for a long time. It would be good to see it happen.

StLCylone 6y ago

Where would the climate crisis be if we diverted all the energy spent on Bitcoin mining into carbon sequestration?

jovial_cavalier 6y ago

I don't understand why this is causing almost any movement in the markets at all. It's a predictable event, so everyone's position should already take it into account. Why would this introduce any volatility?

Thorentis 6y ago
Last I checked there wasn't really any movement at all. If anything, the price has dropped.
sparkie 6y ago
There are some things which aren't predictable, such as how many miners are going to drop out of the race given their potential revenue has just been chopped in half, with no corresponding doubling of the BTC/USD exchange rate. Some may be speculating that miners dropping out is bad for bitcoin because it reduces the security of the network and may give people weak hands if they're concerned that their money may not be as safe as previously assumed. Miners dropping out of the race would also release more mining hardware onto the markets at discounted prices, and some of it may go towards attempting to attack bitcoin. However, if you do the sums and work out how much it would cost to attempt and sustain such an attack, and how much can be gained from it, you quickly realize that such an attack would never be attempted for monetary gain - it is in the miner's best interest to play by the rules. The only other motive for attack is to cause temporary denial-of-service, at the expense of the miner, but this could only plausibly be conducted by a nation state due to the amount of work done in Bitcoin.

ivanstegic 6y ago

Could someone explain, in English, why this is a big deal?

ilyas121 6y ago

Btc breaks 35k by next halving (not maintains). Documenting this here so I remember to check back when I see the next halving up on HN board in 2024. Edit: Feel free to reply with your guesses (good as mine) for a good laugh in 4 years

Proven 6y ago

According to bitcoin experts, the price was supposed to go up due to increased scarcity and harder mining. Didn't happen. Its only use case is trade of other useless cryptocurencies.

decompiled_dev 6y ago

"Bitcoin is an experimental digital currency that enables instant payments to anyone, anywhere in the world. Bitcoin uses peer-to-peer technology to operate with no central authority: managing transactions and issuing money are carried out collectively by the network." Seems like an successful experiment to me. I am excited to see what next gen tech in this space will bring.

mudlus 6y ago

Bitcoin now has a lower inflation rate than gold. It is likely that the main seller of Bitcoin from here on out will no longer be miners but exchanges.

hinkley 6y ago

What's the advantage of reducing it by 50% each year versus 30% every 6 months (51% a year)? Seems like the stepping function would be less severe.

tim333 6y ago
It's not that, it's every 210,000 blocks (approximately every four years). I guess Satoshi thought that would be a good schedule when the code was written. It must have been hard to see how the future would pan out.

corpMaverick 6y ago

ELI5 ?

Proven 6y ago

What's newsworthy isn't the halvening itself but the fact that halvening has completely failed to increase the price. Yesterday you could buy a coin for a bloated price of 8K. Today it takes twice as much work to make one but, but guess how much it costs to buy it... Yep, 8K. Until it drops to 4K and then some... Okay, so now that Bitcoin miners have to work twice as hard for the same amount of electricity, why would they? They wouldn't of course. Transaction fees are up in recent months, around $1 on average, which is good for the miners but doesn't exactly happen BTCs find any use. BTC is well past its prime.

Asuchug4 6y ago

Oh great, another site that servers machine translation of content. So I get "brownie" instead of "hash", that makes page so easier to understand. The only worse offender is the Google Play store, the autotranslated description actively prevents me from understanding app description.

fierarul 6y ago

BitCoin is such a big disappointment. From a global way of making micropayments it became a global multi level marketing pump and dump scheme. The true believers always told how BitCoin will be the one true saviour when shit hits the fan -- well, we are during a pandemic not seen in 100 years and BitCoin is basically irrelevant. There is no BitCoin economy, only people watching the BTCUSD sticker price because only the real economy matters. I'm also willing to bet the network resilience is not as high as techno folks want to believe and if some governments want it shutdown it will be pretty close to shut down and the FX rate will go towards $0. In many ways BitCoin is not an anti-globalist or anti-anything response. It is a product that exists due to globalization. And the high prices are a result of some economic stability and prosperity that allowed the population to play with shiny things. The coming depression will put an end to such trivialities.

EXO1 6y ago

runeks 6y ago

Regarding a potential impact on the bitcoin price, consider that — assuming miners sell their mined bitcoins for dollars to pay for hardware and electricity — now only 6.25 BTC per 10 minutes will be sold into the market because of the halving. That’s a reduction in the amount of bitcoin sold into the market every 24 hours of roughly $8m. I believe this is the theory behind expecting a price increase. Whether or not it materializes time will tell.