What exactly is bitcoin halving?

[tom555]

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

[NorrisK]

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.

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).

[jacee]

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

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. 

[Hugroll]

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

[jacee]

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. 

[Amph]

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

[Raimonn]

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.

[pereira4]

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 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?

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.

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.
[/quote
Halvings are good. If greedy miners aren't happy with their gains, they will go, but other people out there will make profit from the reduced difficulty. In any case, by the time halving arrives the price will be at least x2 of what it is now, so no worries. Even if its not, like I said before, it's a non issue. American dude doesn't find profit, then some guy in some other country with a cheap electricity bill will. It evens out the space of mining.

[dothebeats]

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.

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.

[jonald_fyookball]

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 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?

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

[BurtW]

This is why it will be a non-event:

Code:

Total BTC in  Weekly BTC  Ratio of
Circulation   Production  Weekly to Total
------------  ----------  ---------------
    10500000       50400            0.48%
    10500000       25200            0.24%

    15750000       25200            0.16%
    15750000       12600            0.08%

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.

[Xiaoxiao]

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

[Amph]

This is why it will be a non-event:

Code:

Total BTC in  Weekly BTC  Ratio of
Circulation   Production  Weekly to Total
------------  ----------  ---------------
    10500000       50400            0.48%
    10500000       25200            0.24%

    15750000       25200            0.16%
    15750000       12600            0.08%

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.

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

[jackg]

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

[BurtW]

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/

[jacee]

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 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?

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

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.

[cellard]

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 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?

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

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:



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.

[Agaguk24]

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 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?

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.

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.

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.

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...

[7788bitcoin]

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.

[Agaguk24]

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!