Bitcoin Forum

So in the speculation board I see posts that says bitcoin price will go up ince the halving occurs. What halving is really? How does it affects the price of bitcoin? Kindly please explain as I don't have any idea what these are. :D

For the first four years that Bitcoin existed miners were paid 50 Bitcoins per block.  Then after those four years the amount paid to the Bitcoin miners was cut in half to 25 Bitcoins per block.  This was the so called "first halving" now after the second four years the amount paid to the miner is scheduled to be cut in half again, this time to 12.5 Bitcoins per block.  This is the second "halving".  By design the amount paid to the Bitcoin miners will be cut in half about every four years until the year 2140.

It's when the number of coins the miners get for mining each block gets reduced by half. Today they get 25 Bitcoins for mining each block, and there's about 6 blocks mined per hour. During next summer the number of coins they get for each block gets reduced to 12 and a half.

Miners have to pay electricity bills that mining runs up so they frequently sell their mined Bitcoins and that brings the price of Bitcoin down. When the number of coins they get for mining gets reduced by half next summer they will only have half as many coins to sell as they do now. That should help the Bitcoin price rise because there will be less pressure pushing it down from miners selling.

BTW the current estimate as to exactly when the miner reward will go from 25 to 12.5 BTC per block is:

Reward-Drop ETA: 2016-07-25 22:11:50 UTC (39 weeks, 5 days, 9 hours, 50 minutes)

The halving refers to the reward for solving a block.  Satoshi outlined in his white paper how the supply of bitcoin would be controlled, that the reward for solving a block would be cut in half every 210,000 blocks, roughly every 4 years.  The reward started at 50btc and is currently 25btc, it will go down to 12.5btc at some point in 2016.

Lots to read from a basic google search, https://www.google.com/search?q=bitcoin+halving

Some people think that the subsequent reduction in supply will drive up the price. I don't really buy that. There's already enough coins out there to meet demand and of the coins traded every day, the volume is multiple times more than the mined coins arriving. If demand rose significantly then it might be a factor but outside sentiment, which is more important than anything so it does count, I don't think there's any other reason for it to rise.

I see, this answers my question clearly. So basically it's the miners keeping their coins in them and not selling them because they only get half of the original coins that they are getting now after the 2nd halving?
So if these miners still wants to sell their coins, then no price increase will happen to bitcoin?  ???

Yep, pretty much this.  The fact that bitcoins will be "more scarce" to the miners and exchange sites, that will make bitcoin more valuable; assuming that the demand for bitcoins will remain the same. 

Consider the Californian Gold Rush for example... when (actual) miners started out, they were finding tons of gold and selling them to make a living.  Since then, the price of gold is a lot more than what the miners of those times were selling their gold for.

I understand the supply and demand thing. So what you mean is that the price increase after the halving does not have a solid proof that it will really increase at all? ???

But it's just less dilution and inflation. Nothing's more scarce. There's just as many coins as there were before and plenty are always up for sale. If we completely discount China, 24 hour trading volume was around 80,000 BTC. Not that I believe mined coins hit exchanges all that often anyway, but the halving is only 1800 coins less per day.

Definitely no guarantees.  It's more optimism than anything else.  I suspect quite a few people expecting a sudden launch to the moon are going to be disappointed.  I think at best there will be a slight uptick.  Certainly nothing major (although I'll welcome being wrong on that one   :) ).

Why should it? If the halving destroyed half the previous mined coins then a price rise makes sense. There's just a modest percentage less arriving every day. That makes no difference if there isn't a decent amount of demand. The halving and what someone on an exchange is willing to buy or sell for aren't very closely related. There are plenty of BTC users who probably don't even know what it means.

Now there goes my bubbles of hope that bitcoin will reach a higher price after the halving. I've thought about all the stuffs I read on the speculation board and guess everyone is hoping for the same.

The last halving was a non-event. Speculation was that the reduction was factored in months before the block reward drop.

At the first halving there were 10.5 million BTC and the subsidy went from 50 to 25

At the next halving there will be 15.75 million BTC and the subsidy will go from 25 to 12.5

So since the monetary base will be larger and the drop in daily production is smaller the effect of this next halving should be less than the effect of the first halving.

As was stated, after all the wringing of hands and euphoria around the last halving the net effect was about zero.

I expect that after all the "end of the world" hand wringing and the "price will double" euphoric expectation the net effect of the next halving will also be about zero.

well it can't keep on remaining on zero for every halving, otherwise we know what will happen to the miners industry

basically it's like saying that bitcoin will die by 2020...

No certainties. Pretty simple, I must say: if demand stays the same or increase, value will increase; if demand decrease and supply decrease, price will go down. Also in the second scenario, miners that won't profit in these terms would likely leave the scene for a while or leave completely.

Every 10 minutes the latest bitcoin transactions between bitcoin addresses
enter the blockchain to become permanent on the history of bitcoin transactions.
All miners are trying to guess the solution to a puzzle that will allow the first one to solve it to insert the next block (basically, a list of transactions with a header) into the chain. The lucky miner that was able to guess the solution is rewarded.
In the first fours years, the reward was 50 BTC. So 50 BTC would be added to the number of BTC in circulation, every 10 minutes. Note that these bitcoins weren't "associated" with any bitcoin address. So they didn't exist! They come into existence from the infinite number of bitcoins that only exist in a potential form but never came into existence and become actual.
It is as if an infinite number of bitcoins already exist and will ever do; but will never become real.
From that infinite potential/void only 21 million will be allowed to enter circulation, in the limit.
And every four years the miners reward - that they will get if they win the mining "lottery" - is halved. So right now it is 25 BTC. Next halving 12.5 BTC. In the next 6.25 BTC... and so and so forth. Till the sum of all rewards that ever happened approaches the limit of 21 million.

The limit of 21 million bitcoins is hard coded in the distributed software implementation with a schedule and results from the accumulation of 50 bitcoins reward each ten minutes during the first four years(50x6x24x365x4=10 512 000), plus, half, 25 bitcoins reward each ten minutes during the following four years (5256 000+10 512 000= 15 768 000), plus, half, 12.5 bitcoins reward each ten minutes during the following four years (2 628 000+5 256 000+10 512 000=18 396 000)... and so on and so forth, till the reward of the four years before is so that it doesn't add nothing to the total of "almost" 21 million, more precisely: 20999999.97690000 BTC.

This protocol implementation results from a few lines of code in the distributed software, and everyone would have to agree to change it otherwise incompatibility would arise to anyone trying to change that.

It's quite simple. If everything stays the same but supply decreases, the price will rise.. or at least drop at a slower rate.

Why not? He meant that upcoming halving will have a zero effect on the price just prior and after the halving. This doesn't mean that Bitcoin will dissappear. We might as well have some game changing things that would propel us to the moon happening 6 months after the halving.

This would mean that the halving had zero effect on the current Bitcoin price but we still went up and haven't died as you suggested.

That's true. It is also a different user demographic and mindset. I don't know what's going to happen.  ???

And a fair few have had the shit kicked out of them since the bubble. Perhaps the present crop are more cautious and are content to actually, like, use it rather than bet the house. It's gonna be a fascinating thing to watch.

All the miners and anyone else in bitcoin's own personal infrastructure is far too invested in bitcoin so when the halving happens 50% of people cant just pull out so the price goes up without fail.  Watch it happen.

Finally an explanation for halving, I was asking about the same question LOL.

I guess if miners get half the reward, many would cease to mine also, which also will get the price up, and then they will start to mine again which will bring the price down? or I am making a mess?

because what you suggest could have already happened, since it has nothing to do with the halving, but we are struggling to even maintain the lowest value

So they're going to foot the bill for the price rise that saves them? That doesn't make a whole lot of economic sense. The price ain't gonna rise just because a group of people need it to.

Even better than an expensive Bitcoin is the price of energy wasted, miners who want to keep mining would need to find different methods or energy resources: solar, wind, even the controversial free energy. That's when the world will start to evolve.

Haha - It would be Nice if the Bitcoin price would rise again. I would simply would like to know if there are any connections with the Bitcoin rise over 1k$. Would be greatto have this on the next Bitcoin Halving.

Does anybody knows how long it takes from now? Would be great to know.

Otherwise im glad using the cryptocurrency for so much things in the internet. I think this thing will make it get bigger. Paypael is simply not legit.
Would be my pleasure to hear from your site guys ;)

regards
lama-hunter

Do you just mean the bitcoin halving in general?  The next halving is scheduled to happen this coming up summer in 2016... so there is still time to accumulate as much as you can (or better yet, as much as you can without breaking the bank) before it begins... I would speculate we are going to see a pretty good price increase sometime during spring before all this happens; but with every great pump that happens, there will be a great dump to counteract that... so during that time, just be careful when you buy bitcoin.

There you go - http://bitcoinclock.com/

The miners historically dont stop mining, look at litecoin etc also.  So there is less coin available for people to buy on the market daily and the price rises because of that. The miners are committed if not on purpose.  If the demand stays the same the price goes up, 50% of miners dont just leave.  If the demand drops same time as halving that is a different story.

I think the price is going to go up after the halving. There was a bit run up in anticipation of the ltc halving too. With more efficient hardware it is going to be interesting!

If litecoin can almost exactly double and hold steady bitcoin has about 3 times the chance for that since its actually a used legit network.  Great example of whats coming.

I am very wary of halvings, as I have seen the negative effects of halvings in many other coins before. Bitcoin is too small compared to the general economy to work completely like a commodity: halving reduces the excitement brought by mining - this reduced excitement could have a negative impact on price.

so essentially the block reward is going to be halfed, and this should mean that the supply of bitcoin entering the market goes down and if demand stays the same the price should increase

I'm not so sure if this really will necessarily reduce the "excitement" of mining for miners, but it will hurt them for sure.  But that's not to say that they will necessarily stop; they just might start to look elsewhere to move mining farms for cheaper electricity costs, or better ways to improve consumption of energy, like investing in solar energy for example.

But all in all though, there is just simply too much money invested by mining farms for them to just completely stop in general.  I know the basic economics of how a business is maintained and run, and once you go below a certain threshold of incoming currency where the business is steadily losing money, then it's not sustainable any more and the business will have to close... but when a "normal" business closes, they will sell off property, assets, and other things to make money back.  It will be hard for miners to find people to buy a fuck ton of ASIC's and other mining hardware, or at least, I would think so at least... maybe if they sell it at a ridiculously low price.

So to conclude, there is really no reason why bitcoin price will go up after the 2nd halving?Only the supply and demand will really affect the price. But what if the price will not go up then what if the miners would not be interested into mining anymore because of the lesser reward, wouldn't that be a bad sign for bitcoin?  :-\

Essentially, yeah... that would be a bad sign for bitcoin.  But I would say even if the user base stays the same, and the demand is kept relatively where it's at right now, I would say the price will still go up... because the amount of available coins produced by miners will go down, therefore making it more scarce.

Though, you can't really tell if bitcoin (or any other coin for that matter) will end up being very successful just based on price in fiat.  Even though that is one of the major indicators, that's not necessarily all of the things that indicate success... full nodes being ran, market size, business adoption, etc. etc. the list could go on.

fortunately, miners have some margin on their profit, they could, if the price will no rise, reduce the dumping a bit and  to put less pressure on the market, and hoping for some increase in the demand

while still maintain some profit, however i think that some of them at that point would begin to leave the scene slowly..

Halving as others have mentioned is the day that Bitcoin distribution in new blocks is decreased by 1/2
Also known as a rewards decrease in the block
This reduces the supply of coins and makes the remaining coins worth more since new ones are generated at a far slower rate.


So far every halving has resulted in a boost in price for Bitcoin because of supply and demand increasing relatively during that transitional period.
The impact does get larger each halving though but its speculation as is.
Miners do not mind as long as their mining gear is still making them profit if its not they will turn off their units or keep them on speculating on price rises.

i dont really understand about bitcoin halving,still wait for the best explain.

How exactly does bitcoin become more scarce when rewards halve? There is still coins coming in every 10 minutes, essentially making bitcoin less scarce.

The only reason bitcoin would become more scarce, is that people are hording the coins without intention of ever spending them (like gold owned by countries, hidden deep inside banks, never to be touched).

Man this thread is full of clear explanations of what halving means. Are you sure you read them? If yes then you should understand it clearly.  :-\

also when the halving happens, the price goes up. the transaction fees should also theoretically scale up, meaning the miners can suffice income with transaction fees

Uuh, based on what I've read and my understanding to what they've said, the rising of bitcoin price is only a theory and thus don't really has anything directly from the halving.  :-\

if the demand remain where it is now, it must rise due to the halving otherwise it will die in two halving at best, so yes it is correlated, principally because there will be less dumping from miners

Now there are 25 new bitcoins every 10 minuts (when a block is solved), with the halving the reward for solving a block will be 12,5 Bitcoins. There will be half new bitcoins every 10 minuts than now, if there is the same demand of buying prices could go higher. But if there is low demand prices could go down.

Those were alts; this is bitcoin with a $3 billion marketcap. This is a different scene. If nothing happens by the time it comes, small miners will leave, big mining firms that still profit stays. This is survival of the fittest for the miners, and it is a nice way to test the robustness of the whole network.

I don't think you understand that well... or you wouldn't be asking these basic questions, no offense.

This is why it will be a non-event:


Notice that at the time of the first halving the weekly production accounted for only 0.48% of all bitcoins and went from 0.48% to 0.24% instantly.

This time around the weekly bitcoin production will change from 0.16% to only 0.08% instantly - even less of an effect.

Some people say "theoretically" it never stops, that is incorrect right?

mmh, this can only tell us that there will be less dumping, not that the demand because of the halving will not increase or that the price will not change because of the halving

remember that is the hype around it the real factor, not the halving itself

According to one of the mining calculators, the halving is due next year in june/july time.

As stated a few times in this very thread:

Reward-Drop ETA: 2016-07-25 19:55:40 UTC (39 weeks, 4 days, 4 hours, 40 minutes)

Source:  http://bitcoinclock.com/

Well as I've said I know how the supply and demand works. It's pretty basic. What I'm trying to clear is what bitcoin halvings is. I'm pretty much new to bitcoin so I don't know a lot yet. In that post I am referring to the halving and not the supply and demand thinggy. ;)

It's not that hard to understand man. Halving just means that miners get half of the coins they are getting now when they mine.. that's all. This graph makes it easy to see in a visual way:

https://ip.bitcointalk.org/?u=http%3A%2F%2Fnakamotoinstitute.org%2Fstatic%2Fimg%2Fmempool%2Fend-the-fed-hoard-bitcoins%2FBitcoin-Inflation.png&t=557&c=lBGvnavJWZxpcA

So as you can see, the inflation lowers, which basically means the rate at which new coins are generated slows down, which should make the price higher if the demand is maintained. Should make the price go moon if the demand increases.

The excitement factor I mention is meant towards the casual home miners. Nowadays it takes 1000 watts to mine some BTC dust - now with the halving this means they will get half of the dust they mined before. Hardly something to entice new casual miners to join in the fun... right now its a losing proposition.

Large operations and small miners alike, are confronted to a decision to make in light of stubbornly low Bitcoin price of 2015. If miners do not make money, people won't buy mining equipment - and solar power requires a huge infrastructure investment that can't really be recouped at today's BTC price.

It is already very visible that new mining technology development has slowed down quite a bit! What will happen, really boils down to the evolution of the price of BTC...

Most of the bitcoins gained by miners are being converted into fiat to support the operation of the mines. Miners will want to maintain their income/cost. Therefore reward halving will results in miner seller coins at higher price in order to cover the cost and get income.

Without an increase in price after reward halving, the mining operation will become unprofitable.

It is not the miners who decide the fiat their mined BTC will fetch... it is the market. When reward halving strikes BTC, there will be less BTC offered to the market - by definition of course - this suggests all other things being equal that price will appreciate.  Also, there are many other factors that will come into play at that time - I am not so sure price will double instantly!

If price does not increase, well the less profitable miners will cease their activity until enough have quit to make it profitable again.

Let's also not forget that the aim of the BTC adoption campaign is also to have more transactions going on by that time; with increasing transaction fees paid to miners this might reduce the negative impact of reward halving!

Mining long ago stop to be profitable, bitcoin was created under different terms now big investors mine the coins and push the price down till made unprofitable another mining operations. Plus bitmain before sell the hardware they mine a month for themselves
Miners already stopped operations before December of last year, bitcoin price is controlled by the Chinese market.

with the halving the price raise up before a big fall.


they need to buy couple more of millions of coins.  ;D ;D

Yeah. Pretty much the miners will be paid half what they used to be paid every 4 years.

The miners won't feel it as long as the price keeps rising throughout the years. We've seen the price stay at $220-$250 for such a long time, and miners didn't pull back. The price since then reached $500 which resulted in a double price, and that even before the halving.

Once the halving is completed, we'll most likely see a price of at least $500-$600 which means that the miners won't lose out on their mining rewards when they purely look at it as being worth $$$ and not BTCBTCBTC.

when it does halve next summer btc to 1000 imo

That depends on the demands on the market. If the demand isn't high, the pricing won't be high either. There isn't any guarantees that it would rise as mining is so profitable that some farms are actually keeping some percentage in Bitcoin. Furthermore, many farms already have ROI on their machines.