Bitcoin halving to be canceled?

[deisik]

That's what I expected to hear. Now, say, 90% of all miners agree on canceling Bitcoin halving and begin using a new version of the client between themselves. Then the disagreeing minority will either have to put up or shut up, right?

What will happen to Bitcoin holdings?

no, that 10% can use bitcoin as-is.
and the 90% majority doesnt have the right to call it bitcoin. they have created an altcoin which initial balances would be "copied over" (copied is not technically correct but i think you get the point).

I disagree with that. If you were right, then we would still have Bitcoin as it had been at its birth, since no change would be possible without losing the right to call a new version Bitcoin. There will always be people who don't agree with every change done or proposed, and that's normal...

So, I guess, the remaining 10% will have to put up (otherwise risking losing their coins), and it is actually a matter of consensus through the majority by miners

[onemorexmr]

That's what I expected to hear. Now, say, 90% of all miners agree on canceling Bitcoin halving and begin using a new version of the client between themselves. Then the disagreeing minority will either have to put up or shut up, right?

What will happen to Bitcoin holdings?

no, that 10% can use bitcoin as-is.
and the 90% majority doesnt have the right to call it bitcoin. they have created an altcoin which initial balances would be "copied over" (copied is not technically correct but i think you get the point).

I disagree with that. If you were right, then we would still have Bitcoin as it had been at its birth, since no change would be possible without losing the right to call a new version Bitcoin. There will always be people who don't agree with every change done or proposed, and that's normal...

bitcoins social contract has never been changed.
any hardfork made was to fix bugs, which got 100% majority easily.
new features where introduced through softforks (means: only miners need to update)

so there never has been an example to support your claim

[deisik]

That's what I expected to hear. Now, say, 90% of all miners agree on canceling Bitcoin halving and begin using a new version of the client between themselves. Then the disagreeing minority will either have to put up or shut up, right?

What will happen to Bitcoin holdings?

no, that 10% can use bitcoin as-is.
and the 90% majority doesnt have the right to call it bitcoin. they have created an altcoin which initial balances would be "copied over" (copied is not technically correct but i think you get the point).

I disagree with that. If you were right, then we would still have Bitcoin as it had been at its birth, since no change would be possible without losing the right to call a new version Bitcoin. There will always be people who don't agree with every change done or proposed, and that's normal...

bitcoins social contract has never been changed.
any hardfork made was to fix bugs, which got 100% majority easily.
new features where introduced through softforks (means: only miners need to update)

so there never has been an example to support your claim

How do you know? You never get 100% majority (maybe, only in Soviet Russia, wtf), since there are many ways to fix bugs, and even some bugs are sometimes... often times considered as "features"

Now we see the dispute about the blocksize limit, isn't it just what you ask for?

[onemorexmr]

How do you know? You never get 100% majority (maybe only in the Soviet Russia, wtf), since there are many ways to fix bugs, and even some bugs are sometimes... often times considered as "features"

Now we see the dispute about the blocksize limit

yes indeed. blocksize change would be the first example.

but why do you insist on changing bitcoin?
why dont you just invest in an altcoin which does what you like? if its better in the longrun it will prosper.

[deisik]

How do you know? You never get 100% majority (maybe only in the Soviet Russia, wtf), since there are many ways to fix bugs, and even some bugs are sometimes... often times considered as "features"

Now we see the dispute about the blocksize limit

yes indeed. blocksize change would be the first example.

but why do you insist on changing bitcoin?
why dont you just invest in an altcoin which does what you like? if its better in the longrun it will prosper.

Dogecoin is good (for speculating), but it is a little too hard on the cardiovascular system. That's why I care, lol

[onemorexmr]

How do you know? You never get 100% majority (maybe only in the Soviet Russia, wtf), since there are many ways to fix bugs, and even some bugs are sometimes... often times considered as "features"

Now we see the dispute about the blocksize limit

yes indeed. blocksize change would be the first example.

but why do you insist on changing bitcoin?
why dont you just invest in an altcoin which does what you like? if its better in the longrun it will prosper.

Dogecoin is good (for speculating), but it is a little too hard on the cardiovascular system. That's why I care, lol

only time and adoption can change that...
imho the first bitcoin traders had the same problems

[johnyj]

So the point of reward halving (among other things) was to attract users to this then entirely new technology. I take it, and it might have served well to this end, but I'm still suspicious that nowadays it wouldn't make more harm than good...

It is in fact a large topic about reward halving, I guess Satoshi must have put lots of consideration in this area

There are basically 3 types of money supply scheme:
1. exponentially increasing (fiat money)
2. linearly increasing (Dogecoin)
3. limited (Bitcoin)

In fact, 2 and 3 are almost the same from macro economy point of view: After some decades, the increase in total money supply in 2 will become so insignificant percentage wise, that it is almost like fixed (If the money supply increases 0.1% per year, then its impact on inflation is almost the same as limited total money supply)

So for the sake of simplicity, Satoshi went for model 3, which could give a very clear signal of limited total money supply

Then he had to decide how those limited coins will enter circulation over time

There are basically 3 types of distribution model:
1. distribute using a progressively increasing schedule
2. distribute equal amount of coins each year for xxx years until reach the limit
3. distribute using a progressively decreasing schedule

It is clear he didn't want to use model 1 or 2: If bitcoin indeed take off and gained mainstream popularity, then large banks with lots of resource will easily control majority of the coins at later stage. Those who are interested in the idea must be able to control a large part of the bitcoin when it is still in its infancy

So a progressively decreasing schedule was selected. Then how fast and how often the block reward will drop will be decided. It must consider the speed the information is spreading on internet, give early pioneers enough time to react, but it should also leave enough incentive for late adopters to continue strengthen the network until the fee income replace the block reward

If the reward drops too fast, it will reduce the late adopters' incentive thus might fail to attract enough support before it reach mainstream. If the reward drops too slow, it will be close to model 2 thus give large institutions enough time to control majority of the bitcoins. 4 years period is already a long time for any IT related projets, so let half of the coins distributed during 4 years sounds like a decent pace

Why 50% drop every 4 years instead of 16% every year? I have not figured out a good reason, maybe to make the mining anticipation simple and relatively stable during a 4 years time. Could also be a strong anticipation of price rally every 4 years, thus everyone is at least hold their coins for 4 years, encouraging long term saving

[coinplus]

So the point of reward halving (among other things) was to attract users to this then entirely new technology. I take it, and it might have served well to this end, but I'm still suspicious that nowadays it wouldn't make more harm than good...

It is in fact a large topic about reward halving, I guess Satoshi must have put lots of consideration in this area

There are basically 3 types of money supply scheme:
1. exponentially increasing (fiat money)
2. linearly increasing (Dogecoin)
3. limited (Bitcoin)

In fact, 2 and 3 are almost the same from macro economy point of view: After some decades, the increase in total money supply in 2 will become so insignificant percentage wise, that it is almost like fixed (If the money supply increases 0.1% per year, then its impact on inflation is almost the same as limited total money supply)

So for the sake of simplicity, Satoshi went for model 3, which could give a very clear signal of limited total money supply

Then he had to decide how those limited coins will enter circulation over time

There are basically 3 types of distribution model:
1. distribute using a progressively increasing schedule
2. distribute equal amount of coins each year for xxx years until reach the limit
3. distribute using a progressively decreasing schedule

It is clear he didn't want to use model 1 or 2: If bitcoin indeed take off and gained mainstream popularity, then large banks with lots of resource will easily control majority of the coins at later stage. Those who are interested in the idea must be able to control a large part of the bitcoin when it is still in its infancy

So a progressively decreasing schedule was selected. Then how fast and how often the block reward will drop will be decided. It must consider the speed the information is spreading on internet, give early pioneers enough time to react, but it should also leave enough incentive for late adopters to continue strengthen the network until the fee income replace the block reward

If the reward drops too fast, it will reduce the late adopters' incentive thus might fail to attract enough support before it reach mainstream. If the reward drops too slow, it will be close to model 2 thus give large institutions enough time to control majority of the bitcoins. 4 years period is already a long time for any IT related projets, so let half of the coins distributed during 4 years sounds like a decent pace

Why 50% drop every 4 years instead of 16% every year? I have not figured out a good reason, maybe to make the mining anticipation simple and relatively stable during a 4 years time. Could also be a strong anticipation of price rally every 4 years, thus everyone is at least hold their coins for 4 years, encouraging long term saving

Very much useful information. Thank you.

I was able to understand why bitcoin has capped supply. But for long time I do not understand why halving is scheduled for 4 years. Might be as you stated, at leats for 4 years people will hold it to gain some profit. Really Stsoahi, the master mind. He must be a technical Guru as well as Financial expert. Must deserve a Noble prize.

[Miss Fortune]

There was much hype about the Fed raising interest rates in 2015, but we are still there, at the lowest possible level (wtf, it is even no longer the lowest possible limit). Bitcoin halving in July, 2016, is talked about as much, but will it really happen?

I ain't sure

I dont think so, many other countries have been using this biticoin aside here in the US and all it has to be something very serious to have this cancelled.

[deisik]

So the point of reward halving (among other things) was to attract users to this then entirely new technology. I take it, and it might have served well to this end, but I'm still suspicious that nowadays it wouldn't make more harm than good...

It is in fact a large topic about reward halving, I guess Satoshi must have put lots of consideration in this area

There are basically 3 types of money supply scheme:
1. exponentially increasing (fiat money)
2. linearly increasing (Dogecoin)
3. limited (Bitcoin)

In fact, 2 and 3 are almost the same from macro economy point of view: After some decades, the increase in total money supply in 2 will become so insignificant percentage wise, that it is almost like fixed (If the money supply increases 0.1% per year, then its impact on inflation is almost the same as limited total money supply)

Dogecoin initially also had an upper limit on money supply set that was later dropped in favor of increasing it by the same amount of new coins every year. I guess this was a right decision

So for the sake of simplicity, Satoshi went for model 3, which could give a very clear signal of limited total money supply

I have a strong inclination to think that the capped money supply will be a huge disadvantage (or impediment) in the future that might end Bitcoin one day (unless this limit should be raised or canceled completely)

If the reward drops too fast, it will reduce the late adopters' incentive thus might fail to attract enough support before it reach mainstream. If the reward drops too slow, it will be close to model 2 thus give large institutions enough time to control majority of the bitcoins. 4 years period is already a long time for any IT related projets, so let half of the coins distributed during 4 years sounds like a decent pace

And we are still far from hitting the upper limit of Bitcoin supply, but we may already be on the verge of Bitcoin collapse (or major impediment) due to halving, though we might not yet fully realize it...

It might come as totally unexpected

[deisik]

I was able to understand why bitcoin has capped supply. But for long time I do not understand why halving is scheduled for 4 years. Might be as you stated, at leats for 4 years people will hold it to gain some profit. Really Stsoahi, the master mind. He must be a technical Guru as well as Financial expert. Must deserve a Noble prize.

Bitcoin halving may actually turn out beneficial in the end, though I'm highly suspicious that it won't. But what I'm most certain of is that even if it is beneficial, it is far from being optimal. Since no firmly fixed parameters can ever be in any intricate and delicate system such as Bitcoin...

Look at how Fed's rate is determined and changed

[johnyj]

I have a strong inclination to think that the capped money supply will be a huge disadvantage (or impediment) in the future that might end Bitcoin one day (unless this limit should be raised or canceled completely)

And we are still far from hitting the upper limit of Bitcoin supply, but we may already be on the verge of Bitcoin collapse (or major impediment) due to halving, though we might not yet fully realize it...

It might come as totally unexpected

I remember that during 2012 reward halving, there was a small team who made a "50 coins per block forever" fork, and Gavin even worried about that the fork might gain some momentum. But that fork died after some time, indicating that a coin of unlimited supply is of no interest to majority of the miners

In my opinion, a constant money supply model have 2 difficulties:

1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective

Because most of the coins were hold for the long term, the daily coin supply on market will be less and less in a progressively decreasing coin supply model, thus generating a positive expectation of future value increase. However in a constant coin supply model, the daily coin supply on market will be more and more, thus will not guarantee a future value increase even the economy also grows

2. It becomes difficult to differentiate from fiat money system, which also has unlimited total money supply. An inflative monetary system is what bitcoin tries to fight against. It seems to be an inflation or deflation question instead of a choice of specific parameters


Suppose that in future the coin supply changed to 1 bitcoin per block forever, then the yearly coin supply is less than 0.25% of the total coin supply, thus will not be able to trigger any observable inflation. But I guess by that time the fees from transactions are already higher than 1 bitcoin per block, so that it does not make a lot of sense from miner's perspective

[johnyj]

I was able to understand why bitcoin has capped supply. But for long time I do not understand why halving is scheduled for 4 years. Might be as you stated, at leats for 4 years people will hold it to gain some profit. Really Stsoahi, the master mind. He must be a technical Guru as well as Financial expert. Must deserve a Noble prize.

Bitcoin halving may actually turn out beneficial in the end, though I'm highly suspicious that it won't. But what I'm most certain of is that even if it is beneficial, it is far from being optimal. Since no firmly fixed parameters can ever be in any intricate and delicate system such as Bitcoin...

Look at how Fed's rate is determined and changed

FED constantly adjust their money supply because their money is created out of nothing and its value totally depends on inflation. High inflation will quickly destroy their paper money's value and confidence altogether. That's the reason when inflation picks up, they will immediately raise the rates, even they know that will kick the economy into recession and cause lots of people to lose their job. They don't care, because if the fiat money is crashed, then the whole game is over for them

Bitcoin is different, it has a constant cost that can be calculated easily, so even there is inflation (bitcoin's value going down), people still have a sort of anchor of its value through mining cost. And because the money supply schedule is known, the confidence that bitcoin will hold its value is easier to maintain than fiat money

[jbrnt]

So for the sake of simplicity, Satoshi went for model 3, which could give a very clear signal of limited total money supply

I have a strong inclination to think that the capped money supply will be a huge disadvantage (or impediment) in the future that might end Bitcoin one day (unless this limit should be raised or canceled completely)

I think a capped money supply is a response to the uncontrolled inflation of fiat money supply by banks at the time of bitcoin conception. It's some kind of political statement. There could be a huge disadvantage if the there isn't enough bitcoin to go around for every user. Bitcoin is different to other currencies being easily divisible. We are a long way from 1 satoshi being too indivisibly large to spend.

[pereira4]

What?

Who has the most power over Bitcoin? Right, these are mining pools. Who is most interested in preserving the current block reward? The same mining pools...

Look at this way: The miner cartels fuck around with basic fundamentals of Bitcoin such as halving (and let alone other stuff such as total supply or whatever they have a say at) and everyone dumps in fear and all they get is a dead economy. So as you can see it doesn't benefit them.

[Alley]

This topic is one of the more dumbest I've read.  If canceling the halving is so easy why don't miners increase reward to 1,000 coins per block?

[deisik]

I have a strong inclination to think that the capped money supply will be a huge disadvantage (or impediment) in the future that might end Bitcoin one day (unless this limit should be raised or canceled completely)

And we are still far from hitting the upper limit of Bitcoin supply, but we may already be on the verge of Bitcoin collapse (or major impediment) due to halving, though we might not yet fully realize it...

It might come as totally unexpected

I remember that during 2012 reward halving, there was a small team who made a "50 coins per block forever" fork, and Gavin even worried about that the fork might gain some momentum. But that fork died after some time, indicating that a coin of unlimited supply is of no interest to majority of the miners

So we could expect something of the kind happen again. Who knows, maybe, this time this "movement" will get some traction. Now that the Bitcoin XT fraud from the core developers seems to be over (haven't heard anything about it recently), it is the miners turn to show up and step forward with their "initiative", lol...

[deisik]

In my opinion, a constant money supply model have 2 difficulties:

1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective

Though I agree with this (in general), the always decreasing money supply is not actually much better, since it is just another extreme (and I would say, of a higher order). Economy expands and contracts in cycles, but cumulatively it still goes up in the long term. Therefore such a schedule of emitting new coins seems to be more potentially detrimental than the constant rate of new money supply...

[VirosaGITS]

In my opinion, a constant money supply model have 2 difficulties:

1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective

Though I agree with this (in general), the always decreasing money supply is not actually much better, since it is just another extreme (and I would say, of a higher order). Economy expands and contracts in cycles, but cumulatively it still goes up in the long term. Therefore such a schedule of emitting new coins seems to be more potentially detrimental than the constant rate of new money supply...

But bitcoin isint a typical fiat currency subject to inflation, instead it promote interest into holding it by gradually reducing supply. The sole reason for this is attracting long term investors. If you remove the halving and even double it instead, you just create inflation which would stimulate dumping, devaluing, etc.

I'm not an expert, nor can i see in the future of eventualities, but regardless, i very much doubt consensus would be reached to reverse something that is accepted as a fact, hard coded in and even looked up by most people because of its alleged price raise that it will bring.

Basically if you removed this feature, you'd just be creating another bitcoin fork a.k.a. "Altcoin" and i very much doubt there's much interest in the main bitcoiners into jumping boat (as you can tell by the coin's market caps vs existing coin that went with your idea).

[deisik]

2. It becomes difficult to differentiate from fiat money system, which also has unlimited total money supply. An inflative monetary system is what bitcoin tries to fight against. It seems to be an inflation or deflation question instead of a choice of specific parameters

You don't seem to quite comprehend the idea that in the long term it may work (and probably already works) against Bitcoin. I don't say that a massively inflationary currency would be any better. On the other hand, exponentially appreciating currency (for whatever reason) is self-limiting in the long run. My opinion is that the mass adoption of any coin (which is what they all strive for) should not depend on this, i.e. constant appreciation...

Since it will be a game-over one day, the day it crashes spectacularly and irredeemably