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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 electri
by 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 agoBut 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 agoI 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.