Halving Bitcoin Reward Unlikely to Cause Price Surge

[BTC-Joe]

Will bitcoins ever sell for $1,000 USD or more again? Possibly, but it's not likely to happen as a reaction to halving. The supply of bitcoins in circulation is not changing, and if miners jump ship that is a strike against bitcoins not something that would warrant a price increase.

The only thing that halving the reward to btc miners will do is make mining half as appealing. In fact, if you think about it, it's not a very good system because the more people using bitcoin, the more you need miners...but the miners get paid less and less as time progresses.

At the very least, as compensation from mining decreases, a minimum network transaction fee should be imposed and it should increase proportionally to difficulty to ensure that all miners receive a predictable and steady flow of bitcoins for the resources they provide.

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[odolvlobo]

At the very least, as compensation from mining decreases, a minimum network transaction fee should be imposed and it should increase proportionally to difficulty to ensure that all miners receive a predictable and steady flow of bitcoins for the resources they provide.

Each miner is free to decide on their own minimum acceptable fee and reject those transactions that don't meet the minimum. No enforcement of a uniform minimum is necessary.

[Cashew]

The fact that the miners are paid less while you need more is what make them sell their bitcoins at an higher price and thus lead to a price rise.

[odolvlobo]

The fact that the miners are paid less while you need more is what make them sell their bitcoins at an higher price and thus lead to a price rise.

That's not how it works. Sellers (including miners) are free to ask for higher prices, but if buyers won't pay those prices (typically because others ask for less), then prices don't rise.

[Divinespark]

I think whatever price rise is due will happen over the next couple of months. The actual halving will be a damp squib for price.

[countryfree]

The supply of bitcoins in circulation is not changing,

Yes, it will. This is very precisely what the halving means. Actually, more than 3,200 BTC are mined every single day, after the halving, it will be down to about 1,600 new BTC per day. That's a huge difference!

[Amph]

The fact that the miners are paid less while you need more is what make them sell their bitcoins at an higher price and thus lead to a price rise.

they don't need more they are currently earning 4 times their consumption, they are safe at the current price even afte the halving

[European Central Bank]

At the very least, as compensation from mining decreases, a minimum network transaction fee should be imposed and it should increase proportionally to difficulty to ensure that all miners receive a predictable and steady flow of bitcoins for the resources they provide.

Well, yeah. That's pretty much been the intended plan since minute one.

[franky1]

At the very least, as compensation from mining decreases, a minimum network transaction fee should be imposed and it should increase proportionally to difficulty to ensure that all miners receive a predictable and steady flow of bitcoins for the resources they provide.

Each miner is free to decide on their own minimum acceptable fee and reject those transactions that don't meet the minimum. No enforcement of a uniform minimum is necessary.

first of all its been a long long time since "miners" were solo, these days they are in pools and treated as workers.. so these workers do not decide the transactions that get into a block.. the pool does. instead the workers just hash out a small piece of data (header) handed to them from the pool, to get a valid hash/nonce that fits the rules of a block solution. so try to use the word pool next time when talking about the mechanics of transaction selection

The fact that the miners are paid less while you need more is what make them sell their bitcoins at an higher price and thus lead to a price rise.

That's not how it works. Sellers (including miners) are free to ask for higher prices, but if buyers won't pay those prices (typically because others ask for less), then prices don't rise.

ok some numbers for you, each day 3600 coins are created, and at the time of posting. here is some numbers of coins the top 3 pools made in a day
1000btc  F2Pool (40 blocks)
1000btc  AntPool (40 blocks)
675btc    BTCC Pool (27 blocks)

i will concentrate on antpool for the details,

you may think that this 1k coins is small volume per day.
but remember.. they day trade. so when they sell the coins thats 1k volume, when they buy a few hours later, thats 2k volume(still 1k hoard), when they sell a few hours later thats 3k volume(still 1k hoard)

so 1k coins can be 3k volume on an exchange just by day trading one cycle and then back to sell again.

then you add in their play money they decided to keep(profits) from previous days, which also adds to their day trade capabilities

so say it is a mere 5% of days income(50btc).. over a year thats 18250btc

so now because of the last 365days fun.. they have 20k+(day trade profits add a little extra) of coins to play with on any one day.. so day trading just 3 trades a day can be as much as 60k+ coin volume a day.

1. at this point you can ask yourself if they kept 10% a day for 1 year(40k coin hoard / 120k sell-buy-sell trade volume), it would easily explain why the chinese exchange volumes are soo soo high on day trade volume compared to the west

2. at this point you can ask yourself if they done 4, 5, 6 trades a day that can be 120k, 160k, 200k volume a day

hopefully by now you can see that the pools have a huge sway and power of the markets.

but if you think that pools such as antpool (majority owners of their solves) have no weight when it comes to playing the markets, then its time you re-evaluate the real life scenario of the bitcoin economy.

we are no longer in the solo mining era where all coins are split between thousands of people.. the main pools like antpool and btcc have ALOT of reserves purely because they themselves own the majority of rigs and manage the pools, etc.

think about it.. take an imaginary 20,000-40,000 btc.. and see (theoretically) by looking at the exchanges what kind of price movements you could cause with that amount, if you were motivated to move the price

[calkob]

I would agree i think that most of the price rise has already been priced in.  there my still be a few more, maybe around $500.

[BitcoinSupremo]

The fact that the miners are paid less while you need more is what make them sell their bitcoins at an higher price and thus lead to a price rise.

they don't need more they are currently earning 4 times their consumption, they are safe at the current price even afte the halving

Thats a good thing then as mining will continue undisturbed but earnings from mining will decrease a bit, still they can make it up by asking higher transaction fees. We should have a realistic view and price increase will not be huge after the halving.

[Jasad]

Will bitcoins ever sell for $1,000 USD or more again? Possibly, but it's not likely to happen as a reaction to halving. The supply of bitcoins in circulation is not changing, and if miners jump ship that is a strike against bitcoins not something that would warrant a price increase.

The only thing that halving the reward to btc miners will do is make mining half as appealing. In fact, if you think about it, it's not a very good system because the more people using bitcoin, the more you need miners...but the miners get paid less and less as time progresses.

At the very least, as compensation from mining decreases, a minimum network transaction fee should be imposed and it should increase proportionally to difficulty to ensure that all miners receive a predictable and steady flow of bitcoins for the resources they provide.

okay,i'm agree with this

Possibly, but it's not likely to happen as a reaction to halving. The supply of bitcoins in circulation is not changing, and if miners jump ship that is a strike against bitcoins not something that would warrant a price increase.

but how about bitcoin circulation being more decrease because people morehard to get reward and its cause bitcoin price more high than now,its better if you give us some good source for your statement.

[Jemzx00]

Will bitcoins ever sell for $1,000 USD or more again? Possibly, but it's not likely to happen as a reaction to halving. The supply of bitcoins in circulation is not changing, and if miners jump ship that is a strike against bitcoins not something that would warrant a price increase.

The only thing that halving the reward to btc miners will do is make mining half as appealing. In fact, if you think about it, it's not a very good system because the more people using bitcoin, the more you need miners...but the miners get paid less and less as time progresses.

At the very least, as compensation from mining decreases, a minimum network transaction fee should be imposed and it should increase proportionally to difficulty to ensure that all miners receive a predictable and steady flow of bitcoins for the resources they provide.

It might happen that the price of bitcoin will go high like that but im not saying that it will happen. The price of bitcoin will definitely will go up on the halving event.

[Snail2]

To OP. This is a way too mechanical view, what ignores the psychological impact of the halving.

[thejaytiesto]

To OP. This is a way too mechanical view, what ignores the psychological impact of the halving.

In fct, the psychological impact is way bigger than any technical explanations you want to give it. The having is a celebration of Bitcoin every 4 years, and if it happens during a time where we are making solid progress technologically (segwit, schnorr sig, sidechains, lightning...) then you add in the inherent hype of halving, and the price rise is guaranteed.

[franky1]

To OP. This is a way too mechanical view, what ignores the psychological impact of the halving.

exactly.. some naively think that because some pools are making 100% profit due to the fact that the last years price rise is already (falsely) been counted in. means that pools will happily take a cut in todays profits to remain break even. purely because they can break even.

its psychology.. once you have become accustum to a certain level of luxury living. your not going to just go with the flow if your income halves..
ofcourse you are going to try what you can to remain at the $10k+ per block reward

think of it like your own household. (divide the btc cost by 10 to treat as weekly household income)
last year your income was $625 a week(25btc @$250=$6250). and you had $500 in bills(80%cost).. you thought you were ok.
then suddenly it become more difficult to pay the bills because they rose by 10% every fortnight.

then something magical happened. you got a pay rise to $1125 a week(25btc @$450=$1125), so you start adding more gear to your bachelor pad, that has costs. but you are smart because you manufactured the gadgets, so you stuck to a weekly cost of $563 leaving you at a 50% bills 50% disposable income

and then you are told that in a few months your income is going to drop to an estimated $563 a week.(12.5btc @$250=$5625)

are you going to just sit on your hands and smile. or will you push the jobs market to make it appear that your job is worth double to ensure you get atleast $1000 a week again (12.8btc@$800=$10k) or hopefully better than $1250 weekly income (12.5btc@$1k)

of course you are going to push to get a nicer income. especially because you know you do have power to manipulate the market (read my last post)

anyone naively thinking that the halving re-valuation is already included, obviously was not around before during or after the last reward halving..

here is the history..

November 2012(pre halving) $10/btc
February 2013 (post halving)$20/btc
March 2013 (post halving)$35/btc
April 2013 (post halving)$100/btc

[BitconAssociation]

...
here is the history..

November 2012(pre halving) $10/btc
February 2013 (post halving)$20/btc
March 2013 (post halving)$35/btc
April 2013 (post halving)$100/btc

On June 21, 1941, Mashka Kobilova got so drunk she didn't show up for work and got fired.
On June 22, 1941, Hitler invaded Russia.
From this we can infer many things, not least of which is that
1. Mashka Kobilova caused The Great Patriotic War, and
2. If Mashka Kobilova gets drunk again, expect WW3; kiss your butt goodbye.

[Kprawn]

The miners jumping ship, will just cause the difficulty to decline, and then they will come back again or other people will take their place... worst case scenario... the remaining miners will get a bigger

share than what they would have got, was it not for the Halving happening. This will cause more centralization of the mining scene, and it might give China more control. The logic behind the whole

Halving event is that the reward will be halved and less coins will be available ...because less coins will be released. Less Supply in theory, will increase demand... BUT the higher the demand, the

higher the price and more people will start to sell, and this will increase the supply, so everything will return to normal... As I said.. In theory. 

[franky1]

lol i am starting to laugh at everyone trying and failing so hard to deny that the bitcoin price is going to go up.

.. but when they brought hitler into the debate.. then it becomes apparent they have no more rational options left to persuade people to their way of thinking.

"bitcoin Association"

you would have had much a better point if you mentioned the inception of ASICS around a year later as the reason why the price went over $400 in late 2013.. but can you explain the cause of the price movement from november 2012-spring 2013.. without a hitler reference

[franky1]

The miners jumping ship, will just cause the difficulty to decline, and then they will come back again or other people will take their place... worst case scenario... the remaining miners will get a bigger share than what they would have got, was it not for the Halving happening.

the majority of mining rigs are already owned by the big pools themselves (rather than individuals) so the amount of 'jumping ship' wont be as massive because there are less individuals.

This will cause more centralization of the mining scene, and it might give China more control. The logic behind the whole

not much will change.. there will still be the 18 main pools, it wont suddenly become 3-10.. i think 15-17 will remain

Halving event is that the reward will be halved and less coins will be available ...because less coins will be released. Less Supply in theory, will increase demand... BUT the higher the demand, the higher the price and more people will start to sell, and this will increase the supply, so everything will return to normal... As I said.. In theory.  

knowing that alot of the 'volume' on the highest volume exchanges is caused by the pools.. if they were to remove their large hoards. they can easily play the supply-demand game.

the "more people will start to sell" is small compared to what the pools reserves are. and if they do it smart like 5% a day increase it wont trigger a massive sell off. as oppose to the mad insane rush to $1000 in a short period a couple years ago when china first entered the market(i think they have learned that lesson)