67 Weeks Until...

[Stratobitz]

67 WEEKS

The Bitcoin Block Reward Halves.

In 67 weeks - miners and pools will no longer receive 25 BTC per block; rather 12.5 bitcoins. Half the reward in the same adjustable time-frame of 10 minutes; and with 67 weeks of increased difficulty as well.

While no one knows for sure what exactly will happen when the next Block Halving will occur. But it no doubt will have a significant impact on the Bitcoin economy; particularly; mining.

Mining Hardware:

Moore's Law would argue that the computation speed of computer circuits on average have doubled; and will continue to double, roughly every 2 years. However; I think in the coming years we are going to see big challenges keeping up with such progress- as the speed will not be able to continue this growth exponentially.  That said - will ASIC, or whatever mining hardware there is; keep up with this upcoming halving; and then the next?

Power Considerations:

If the block halving were to happen tomorrow; mining bitcoins would become instantly unprofitable for everyone. Big Farms; Small Farms; 1 TH or 10 PH. Unless somehow you had access to free electricity, there would be no reason to mine as doing so under current price conditions you would be in the red for every share submitted.

Block Halving = Price Jump in BTC:

This is a possibility. However; I would argue it with one simple question...  Why?  There are already more than enough BTC out there for the current user-base. There are hoards of BTC in cold storage - coins that haven't moved out of wallets in years. Not pocket change... 100,000s of BTC which has remained untouched for years.

When the block halving occurs - which it will; regardless of what hardware is out there; how fast it is; efficient power wise; etc - on that day it will only be 1/2 as powerful as the day before. So I think it is unquestionable that there will be an exodus within the mining industry as small and large mining operators alike liquidate their current generation equipment and shut down.

This will immediately cause a difficulty decrease in no less than 1-2 weeks after halving. We've seen difficulty decreases already... multiple ones in fact. I would not be surprised if in fact upon halving we see, whether it be in one adjustment period or over a number of periods within a short time-frame; that the difficulty adjusts down 30, 40, perhaps even 50% - which would; if it did actually drop 50% (Lets say it goes down 17%; then another 14% then another 16%) - this would then put the mining equipment efficiency right back where it was.

Block Halving = Price Drop in BTC:

This is also a possibility. As miners exit the industry on halving... or leading up to it; a lot of those sales of equipment will be made in BTC; BTC which will be then converted to fiat to pay off loans (in the case of large miners).  It will be unquestionably shaky... and shaky usually means volatility. Volatility typically includes ups and downs; and ups and downs scare people out.

With half the coins being produced per 10 minutes; I am not sure that the demand at that the time of this event - will in fact have grown so much and so far to where it matters. Because as of right now; the miners of the world are producing far more BTC than what the world needs. If the case wasn't so - price would be rising.

That said:

I just wanted to throw some thoughts out there; and hear some thoughts from everyone as well. Play-ball!

Cheers!

Strato

[1714860094]

1714860094

[adaseb]

Its hard to say.

By next year the price of BTC might be double or triple of what it is now and it will still be proifitable. Or the block halving will reduce the difficulty by half.

What it should do is make the price of BTC increase at least.

[crazyivan]

So, all in all, without major technological breakthrough, mining s dead. Without major price increase, BTC economy s dead.
I really hope not.

[Stratobitz]

Its hard to say.

By next year the price of BTC might be double or triple of what it is now and it will still be proifitable. Or the block halving will reduce the difficulty by half.

What it should do is make the price of BTC increase at least.

I am not sure I agree it should. Supply is only one part of the equation of price points in economics. Demand being the other. So yes supply will be cut in half - but demand is not strong at this point in time... in fact; the trend is down.

Strato

[Stratobitz]

So, all in all, without major technological breakthrough, mining s dead. Without major price increase, BTC economy s dead.
I really hope not.

It is unquestionable:  The block halving event will cause major disruption and volatility within the bitcoin markets; and mining atmosphere. There is no question about it.  Fear/Panic will likely take hold months before. After any sort of major price drop or difficulty drop - greed will then settle in - and then a tug of war between both.

This will not all happen in 67 weeks... it will begin long before. It's not a secret, so the effect the halving has will be factored into the event's repercussions long in advance.

Strato

[notlist3d]

67 WEEKS

The Bitcoin Block Reward Halves.

Mining Hardware:

Power Considerations:

Block Halving = Price Jump in BTC:

Block Halving = Price Drop in BTC:

Mining hardware and considerations will go into effect once we get closer.  People adding up ROI and not knowing what will happen will no doubt slow miner sales close to the halve.

We can hope a price jump will happen.  But we don't really know.  However I don't see it dropping in price.  I see staying the same or improving slowly.

[Amph]

what i think, if the efficiency will fall to a certain point in the future where small medium farm will be forced to close their work, this with the block halving will lead to only a few big farm still operational(probably china big farm only), and it can result in some 51%'ed, but unless they want to ruin their business, i presume they will stay under 51%

then you have the usually, bitcoin will drop, bitcoin will rise, the chances are aginst the drop of course, because of the halving, but many miner will drop anyway their equipment, because of the halving if the price remain the same or it does not get up to x2

[Stratobitz]

what i think, is the efficiency will fall to a certain point in the future where small medium farm will be forced to close their work, this with the block halving will lead to only a few big farm still operational(probably china big farm only), and it can result in some 51%'ed, but unless they want to ruin their business, i presume they will stay under 51%

then you have the usually, bitcoin will drop, bitcoin will rise, the chances are aginst the drop of course, because of the halving, but many miner will drop anyway their equipment, because of the halving if the price remain the same or it does not get up to x2

Let also all not forget that the future of bitcoin; it's success; depends greatly on whether or not the Core/Client can be eventually produced into a distributable that will work for the poorest people of the world. Mining; Trading; Using it at overstock.com - sure; but it's designed to work not for those just mentioned; rather the poorest people in the most remote places. The bankless. Those that live off barter and trade - yet still have cel phones.

Bitcoin, has the unique possibility of being the first money system for 4 Billion People who do not use money at all.

Strato

[philipma1957]

A lot can happen in 67 weeks. 

My first guess is diff never goes past 100b price floats around in the 150 usd to 300 usd range.

Blocks half to 12.5  price drops strong diff drops strong .  And by late 2016 we are at 100 usd and a diff of 25-30 b.

I am doing a thread water position for the next 5 months. I will decide what to do later this year when the cold weather returns.

[ezeminer]

I would assume everyone panics and either do large buying or selling.

Large buying could lead to large selling once the halving occurs, as it might be a peak for fiat to BTC.

Large selling could lead to a huge buyers market once the market is saturated with bitcoins for fiat.

As in security, I believe halving will be a zero day. We can prepare so much, but when it happens, it happens and all the fun will come out.

Block Halving = Price Jump in BTC:
This is a possibility. However; I would argue it with one simple question...  Why?  There are already more than enough BTC out there for the current user-base. There are hoards of BTC in cold storage - coins that haven't moved out of wallets in years. Not pocket change... 100,000s of BTC which has remained untouched for years.

Also with cold storage Bitcoins, some people have just lost their private keys.
I believe one man lost like 10,000 Bitcoins on a harddrive he threw away. He then went dumpster diving but had failed.
Many of the first coins may have ended up like this, but nobody knows for sure.

There are also the Bitcoin eater addresses, addresses that are meant to eat bitcoins, or destroy (maybe someone knows the private key and will grab those later on in life).


All we know is, we can theorize this as this is the mining speculation board

[SaltySpitoon]

Based on what happened when the block halving from 50 to 25 happened, I'd say the price will increase months before the halving, so there wont be any jump in price when it happens. As far as mining is concerned, look at the last two years and the Asics that have been produced, I dont think moore's law is accurate in this case, as if you compare a BFL Single 60GHash that used 850ish watts to a 1 THash miner with the same energy draw, you will see that doubling is probably a gross underestimate of the progress that will be made in two years.

All of that said, my only point to be made, is based on history, I've noticed that no one has had any sort of success using standard models to predict the different aspects of Bitcoin. The best we can do is wait two years and see how it do.

[PolarPoint]

Mining is going to be less profitable, less efficient miner farms will leave the market and difficult will start to come down. Bitcoin price is hard to predict, I am bullish in the long term.

[ezeminer]

Based on what happened when the block halving from 50 to 25 happened, I'd say the price will increase months before the halving, so there wont be any jump in price when it happens. As far as mining is concerned, look at the last two years and the Asics that have been produced, I dont think moore's law is accurate in this case, as if you compare a BFL Single 60GHash that used 850ish watts to a 1 THash miner with the same energy draw, you will see that doubling is probably a gross underestimate of the progress that will be made in two years.

All of that said, my only point to be made, is based on history, I've noticed that no one has had any sort of success using standard models to predict the different aspects of Bitcoin. The best we can do is wait two years and see how it do.

Price hasn't increased much in the last couple months.

And as far as the public knows nobody has a 20nm or smaller chip. The KnC solar chip was supposed but the public hasn't heard anything yet on that topic.

Moores Law might not apply until these chips are released as Bitmain is trying to play with BM1384s to achieve maximum efficiency until such a time exists where they want to put out more hardware (maybe summer will have some new spondoolies/bitmain/KnC (non fire starting miners)/ or any other company that may come out. Hopefully companies that actually produce hardware will have some fun toys for the public by the end of summer so we have new heaters for winter.

[SaltySpitoon]

Price hasn't increased much in the last couple months.

And as far as the public knows nobody has a 20nm or smaller chip. The KnC solar chip was supposed but the public hasn't heard anything yet on that topic.

Moores Law might not apply until these chips are released as Bitmain is trying to play with BM1384s to achieve maximum efficiency until such a time exists where they want to put out more hardware (maybe summer will have some new spondoolies/bitmain/KnC (non fire starting miners)/ or any other company that may come out. Hopefully companies that actually produce hardware will have some fun toys for the public by the end of summer so we have new heaters for winter.

We are talking about years from now, so I didn't mean to imply that it would have any effect on the price now if I did. Who would have thought there would be asics at all back in the CPU/GPU mining days. We could either get far more efficent/powerful Asics, or we could find a technology that surpasses Asics.


As far as mining for the individual goes, it has been "unwise" for idividuals to mine since 2012, but people still do it. There was a point in the summer of 2012 where I was GPU mining around 1 BTC per day with a AMD 6950 and I was losing money. As luck would have it, the 6950 was discontinued shortly after I purchased it, and it was found out that they were incredibly good for Scrypt mining, so I ended up selling the GPU used for more than I bought it for. Mining is always a bad idea in the present, but sometimes it pays off in the future.

[ezeminer]

We are talking about years from now, so I didn't mean to imply that it would have any effect on the price now if I did. Who would have thought there would be asics at all back in the CPU/GPU mining days. We could either get far more efficent/powerful Asics, or we could find a technology that surpasses Asics.


As far as mining for the individual goes, it has been "unwise" for idividuals to mine since 2012, but people still do it. There was a point in the summer of 2012 where I was GPU mining around 1 BTC per day with a AMD 6950 and I was losing money. As luck would have it, the 6950 was discontinued shortly after I purchased it, and it was found out that they were incredibly good for Scrypt mining, so I ended up selling the GPU used for more than I bought it for. Mining is always a bad idea in the present, but sometimes it pays off in the future.

Interesting history. I thought more short term... whoops

In the future we might have sha-256 quantum processing. I believe it will be more power before more efficiency, until the time comes when it is worthwhile to actually produce such ASICs or whatever the next big thing will be.

It will always be cheap/free electricity that wins in the end for mining tho.

[navigator]

A bfl 60gh used ~330 watts not 850.

I could see some big farms shutting down before some home miners. Large farms have a higher overhead cost and operate on smaller profit margins compared to some home miners. If a home miner has similar power cost to a large farm, a single miner at home will have a higher profit compared to that miner being part of many that must be cooled, wired up, shelved, and maintained by someone that is getting paid. Large farms are only profitable because of quantity and quantity discounts.

As for the halving, just look at the extremes and know that something in between will most likely happen. Either difficulty drops in half or price doubles. The only thing I'm concerned with in the mining ecosystem is if price drops far enough that difficulty also drops and someone buys up all the unused miners to 51% the network.

[ThomasCrowne]

So, all in all, without major technological breakthrough, mining s dead. Without major price increase, BTC economy s dead.
I really hope not.

It is unquestionable:  The block halving event will cause major disruption and volatility within the bitcoin markets; and mining atmosphere. There is no question about it.  Fear/Panic will likely take hold months before. After any sort of major price drop or difficulty drop - greed will then settle in - and then a tug of war between both.

This will not all happen in 67 weeks... it will begin long before. It's not a secret, so the effect the halving has will be factored into the event's repercussions long in advance.

Strato

I agree with Stratobitz on this point.  I have a feeling the 'smart' players will likely begin dumping equipment (slowly at first and gradually picking up the pace) up to 3 months before the actual halving.

[Bitsaurus]

So, all in all, without major technological breakthrough, mining s dead. Without major price increase, BTC economy s dead.
I really hope not.

It is unquestionable:  The block halving event will cause major disruption and volatility within the bitcoin markets; and mining atmosphere. There is no question about it.  Fear/Panic will likely take hold months before. After any sort of major price drop or difficulty drop - greed will then settle in - and then a tug of war between both.

This will not all happen in 67 weeks... it will begin long before. It's not a secret, so the effect the halving has will be factored into the event's repercussions long in advance.

Strato

I agree with Stratobitz on this point.  I have a feeling the 'smart' players will likely begin dumping equipment (slowly at first and gradually picking up the pace) up to 3 months before the actual halving.

We've already gone through this before. Only things like Silk Road seizure, fork 4.0, and LTC on Gox create fear 

[alh]

While this has happened before, many current miners (my self included) did not participate. I started in July of 2013, well after the last halving. I can't gage it's impact relative to the  last halving, I think the effects will be more pronounced because the Bitcoin universe is more intense in terms of mining. I have no sense that there were multi-MW mining farms, and a Petahash was unthinkable back then.  We now have an actual mining hardware industry, that is "big business".

Just my $.02 as a relative newbie.

[Biodom]

Halving is not the most interesting problem in bitcoin world.
I would say that the biggest problem is that everyone seems to gang up on bitcoin.
Everybody wants to have the blockchain, but not bitcoin, whatever it is-most here know that it is sheer nonsense, but this ridiculous line of reasoning is making rounds.
Foundation is messed up, etc. etc.

Bitcoin has never been in bear market this long.
This is how Wall street treats the competitor-gold was in a bear market for 19 years (1980-1999).
On a linear scale chart, bitcoin price is moving toward zero in mid 2016. I am not suggesting that it will reach zero, but it might.
It is positively depressing. I stopped buying bitcoin because every buy bites me, so just mine a bit right now.
If it fails, then it fails, although it would be very unfortunate as I expected much more from it.