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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 s
by 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 agomining it will result in half the reward.
- llarsson 6y agoBut 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 agoThe 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.
- SAI_Peregrinus 6y agoThe block reward has been cut in half. So if they were mining for 0 transaction fees then their revenue would be cut in half, but nobody does that. The actual change will thus be less than half, and it's possible transaction fees will increase.
- ta17711771 6y agoMining and immediately selling right now will get half the reward.
- cyral 6y agoYou get half the amount of BTC as before, regardless of the market price
- yreg 6y agoMore than half, since you still get the full transaction fees.
- kinghajj 6y agoThe last statement, yes. Miners receive less new Bitcoin for each block, which, of course, assuming the price stays the same, means that their mining becomes less profitable. The price itself isn't directly tied to the block reward, though the market has recently been more volatile in anticipation of the halving.
- femto113 6y agoIt's a little more nuanced than just getting paid half as much to mine. Miners earn income form two sources, a per-block "subsidy" (source of the mining analogy, this is simply materialized and given to the miner), and per-transaction "fee" for each transaction included in a blocks (these fees are paid by the transaction initiator). Only the subsidy is getting halved. I think the long term vision was the fees would be the main source of income, but they've never made it past around 30%, and are currently only about 5-10% of the total reward.
- gowld 6y agoDoes this suggest that transaction demand severely lags the inventor's assumptions when building the coin parameters?
- sp332 6y agoI don't think so, after all there was a soft-fork (SegWit) and a few hard-forks (Bitcoin Classic most famously) just to address the high volume of transactions. I think the creator did not anticipate bitcoins becoming so valuable. The high value means that people are only willing to pay small fractions of the block reward as fees, because that's worth a lot of money.
- zaksoup 6y agoThe payout for mining bitcoins was cut in half. The number of total available bitcoins in the system remained stable.
- pfortuny 6y agoNo: it is the value of mining, nothing to do with the value of the token. AFAIK.
- deleted 6y ago[deleted]
- DC-3 6y agoIn relatively plain language, this means that new bitcoins are being created at roughly half the rate as before. > Is Bitcoin now half as valuable? Bitcoin's value, like any currency, is dictated by the market. > Did mining it get easier/harder? The difficulty hasn't changed (although it might if this causes a significant drop in the number of miners). > Less profitable to mine, but existing Bitcoins still have same value as before? It is less profitable to mine bitcoin. The impact this will have on the value of Bitcoin remains to be seen.
- arcticbull 6y ago> Bitcoin's value, like any currency, is dictated by the market. ... is dictated by the whims of Bitfinex and Tether
- mywittyname 6y agoThe markets for a lot of esoteric commodities are dictated by the whims of a select few organizations. It's partially how so many of these end up being control by cartels, the demand for cranberries or topaz is just no where near that of soy beans and oil, making it relatively easy to corner the market.
- three_seagrass 6y agoTrue, and there are also commodity markets that are not controlled by an oligopsony, which truly are controlled by the market. It's an important distinction to make, because the statment "Oil's value is controlled by the market" isn't very true.
- gjs278 6y agohuuurrr mom I said it again!!! it’s not dictated by tether. at this point it’s dictated by people throwing money into GBTC and forcing them to buy coins to cover the holdings. you are a know nothing. turn off your computer and stop wasting electricity.
- chx 6y ago
- RandomBacon 6y agoIt becomes less profitable to mine, so probably less people will mine it. It reduces the potential amount of BTC that miners have to sell to recover their costs. The idea is that less selling will increase price.
- mudlus 6y agoActually the transaction fees accounted for over 12% of the block reward for block 630000 Also, it may help to think about it this way: you don't mine the subsidy, you mine the transactions and reap the transaction fees. The subsidy, which halves ever 210000 blocks, is just that, a subsidy. Imagine if more subsidies (like the US subsidy for corn that still exists since the first great depression) had been hard coded to expire? It's been a slippery slope. Now the FED has to directly purchase ETFs to "rescue the market" from itself: https://twitter.com/boes_/status/1260029253145378818?s=20 https://twitter.com/boes_/status/1260029253145378818?s=20
- vmception 6y agoIts like when Saudi Arabia and all OPEC nations cut their oil output in half, without all the drama. easy to understand right?
- tootie 6y agoOil value is based on supply and demand. Bitcoin value is purely arbitrary.
- vmception 6y agoa halving has nothing to do with its value. demand stays the same, supply cut in half. analogy fits no matter which asset class you happen to respect more
- lkbm 6y agoSupply growth cut in half. Unlike oil, BTC doesn't get used up.
- vmception 6y agoYes, supply growth. A semantical distinction not used in any other asset class so why here? Maybe it does better help someone understand, here's to hoping. But in any case, BTC does get burned in a variety of ways - immovable unable to be spent - in predictable ways based on the poor but improving user experiences. When it isn't burned, people look at the days destroyed metric to understand the actual supply.
- tootie 6y agoI suppose it's more apt to say that demand is arbitrary. Demand is currently based on perceived demand.
- maxerickson 6y agoThe 'ore' has half as much in it. It makes mining less rewarding. It's not ½ because miners also get transaction fees.
- colechristensen 6y ago"Mining" is a brute force search for a solution to a cryptographic math problem. The difficulty of that math problem is adjusted so a solution is found about once every ten minutes. Whomever solves it get's a reward + whatever transaction fees happened since the last solution. That reward was initially 50 BTC, it has halved 4 times now, 50,25,12.5, now 6.25. Something like a lottery that gets drawn every ten minutes, but instead of somebody rewarding you, you just have to show the network that you found the solution. After the halving, the reward per round is... well cut in half. This affects mining profitability. Puts lots of hardware in locations at negative profitability so they'll have to shut down and buy new hardware, find cheaper electricity, etc. Whatever happens, difficulty will be adjusted so the same 10ish minute block reward time is maintained. What does this do to value? Eh, the bitcoin market isn't very rational or consistent. Miners will have less to sell, certainly, but people will have all sorts of ideas of what it will do to the price of bitcoin and since so much of bitcoin is speculation and so little is using it for any real transactional purpose, who knows?
- Phelinofist 6y agoWhat triggers this halving? Given the distributed nature of bitcoin it probably wasn't some central entity, wasn't it?
- RonanTheGrey 6y agoIt's built into the protocol. After X number of blocks mined, the reward paid for a mined block halves. This repeats every 4 years until all blocks are mined (about 100 years from now).
- colechristensen 6y agoBlock count. Every 210,000 blocks
- kinghajj 6y agoThe Bitcoin code is set to halve block rewards every 210,000 blocks. If a miner attempts to mine a block with a too-high reward, the network nodes will reject it as invalid.
- economicslol 6y agoCompleting the mining of 1 block of bitcoin now rewards half as many bitcoins as it used to. Bitcoin hyper-bulls think this is a massive event and believe it will lead to Bitcoin rocketing to $300K-$500k by next year. Bitcoin increased in value by hundreds to thousands of percent after the last 2 halvings but whether this is a cause and effect relation is not clear. Both were during the Bitcoin Hype train.
- justinmeiners 6y agominers get paid less for the same work