The 2020 Bitcoin Halving: See what'll Definitely Happen.

[Wenbing]

Greetings house, I'm creating this thread to engage the house on the issues I have been expecting as the 2020 Bitcoin halving event draws near.

The three variables in Bitcoin that are very important this season are:

1. Bitcoin Halving.
This is a core protocol that Sotoshi Nakamoto built bitcoin supply side economics on. It ensures that Bitcoin mine into the market is reduced by 50% every four years. This will lead us to the second variable.

2. Bitcoin Mining: this is the activity that ensures that new bitcoins are generated and added into the already existing volume of Bitcoin in the market. These bitcoins mined represents the reward of miners.

Well, Halving automatically reduce the reward of miners by 50%. The question is what'll happen to their revenue since mining is a very capital intensive business?

This will lead us to the third variable.

3. Bitcoin Trading & Price:

During the Halving speculators and investors expect that the Bitcoin price will surge because of the deflationary philosophy of Bitcoin supply,  Which is based on the basic principle of economics which states that centers paribus, price will increase when supply is lower than demand and vice versa.

So, this will give opportunity to traders to profit.

of Bitcoin Halving Dates ,Halving BTC Amount and Price Surge.

Since BTC invention we've had two Halving which were in 2012 and 2016. The next one is May, 2020.

1.In 2012 Halving: the mining reward was 50BTC starting in 2009 and it was halved by 50% which reduces it to 25BTC. In the same year the price of BTC surged from $12 to $1,038.

2.In 2016 Halving: The mining reward was halved by 50% which reduce it from 25BTC to 12.5BTC. In the same year the price of BTC surged from $650 to $2,526.

3. The Upcoming 2020 Halving: the reward of mining when reduced by 50% will declined from 12.5BTC to 6.25BTC.

Here is the issue for our learning:

1. The historical trend has shown that the two Halvings had corresponding rise in price of BTC.

So, will this 2020 Halving also bring about a surge in the price of BTC considering the coronavirus pandemic?

2. As the reward of miners is halved by 50% in every four years, by 2140 the last BTC will be mined.

So, miners will henceforth generate revenue from transaction fees but how will this be profitable to miners compared with their cost of operations?

Data source:https://blockgeeks.com/guides/bitcoin-halving/

[pooya87]

Well, Halving automatically reduce the reward of miners by 50%. The question is what'll happen to their revenue since mining is a very capital intensive business?

you don't have to worry about miners' revenue. when miners were getting paid twice the current amount of bitcoin for their work (ie. 25BTC) they were earning $6,250 per block but now with half that amount of bitcoin (ie. 12.5BTC) they are earning $108,000. even if we had 4 halvings tomorrow they are still earning more money than 4 years ago.

So, this will give opportunity to traders to profit.

traders have always had opportunity to make profit. halving is just one case among hundreds.
there was a 80% rise over the past month before that there was another 80% during first 2 months and so on.

So, will this 2020 Halving also bring about a surge in the price of BTC considering the coronavirus pandemic?

there is already a hype build up and a 80% rise which could be called the "surge" that you are looking for.

So, miners will henceforth generate revenue from transaction fees but how will this be profitable to miners compared with their cost of operations?

i broke down the numbers above, the miners would still be earning 10 times more money compared to last time reward halved.

[20kevin20]

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2. Bitcoin Mining: this is the activity that ensures that new bitcoins are generated and added into the already existing volume of Bitcoin in the market. These bitcoins mined represents the reward of miners.
~

The mined Bitcoin is added to the total supply, not to the market volume!

~
During the Halving speculators and investors expect that the Bitcoin price will surge because of the deflationary philosophy of Bitcoin supply,  Which is based on the basic principle of economics which states that centers paribus, price will increase when supply is lower than demand and vice versa.

So, this will give opportunity to traders to profit.
~

This is a misunderstanding of Bitcoin many have. Halving does not necessarily mean a price increase is inbound. There's a possibility that lots of miners and traders will move away from BTC post-halving, which would lead to a large decrease in demand. Decreased demand + smaller block rewards aren't a good combination for the price.

Supply does not get lower. It increases as miners keep their rigs on and the BTC network is sustained. Although block rewards decrease by 50%, the supply still increases by 6.25BTC/block.

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1.In 2012 Halving: the mining reward was 50BTC starting in 2009 and it was halved by 50% which reduces it to 25BTC. In the same year the price of BTC surged from $12 to $1,038.

2.In 2016 Halving: The mining reward was halved by 50% which reduce it from 25BTC to 12.5BTC. In the same year the price of BTC surged from $650 to $2,526.

3. The Upcoming 2020 Halving: the reward of mining when reduced by 50% will declined from 12.5BTC to 6.25BTC.
~

AFAIK, late 2013 was the actual year when BTC first hit +$1k as that is the year I have joined this amazing project. 2012 had a max price of ~$100 if I remember correctly (might be my mind playing games on me).

~
1. The historical trend has shown that the two Halvings had corresponding rise in price of BTC.

So, will this 2020 Halving also bring about a surge in the price of BTC considering the coronavirus pandemic?

2. As the reward of miners is halved by 50% in every four years, by 2140 the last BTC will be mined.

So, miners will henceforth generate revenue from transaction fees but how will this be profitable to miners compared with their cost of operations?
~

I would not put all my trust entirely in the two other historical records. Bitcoin's market is only a bit past one decade. Needs a lot more time to take a real path which means a lot of unexpected stuff may happen. There are some miners out there doing their job just as a hobby, simply to sustain the network. If a lot of miners leave the network, there is difficulty readjustment to come in and help them out.

[jseverson]

There are some miners out there doing their job just as a hobby, simply to sustain the network. If a lot of miners leave the network, there is difficulty readjustment to come in and help them out.

As incredible as that is, Bitcoin has grown so large that hobbyists alone can't maintain enough network security.

2. As the reward of miners is halved by 50% in every four years, by 2140 the last BTC will be mined.

So, miners will henceforth generate revenue from transaction fees but how will this be profitable to miners compared with their cost of operations?[/I]

This is really why an arbitrary increase in block size could be disastrous in the long run. A fee market must exist for the network to remain secure; look at what happened to LTC and BCH's hashrates after their halving. BTC doesn't have to worry about this problem as much because it's going to remain profitable to mine even after halvings.

[Wenbing]

<snip>
i broke down the numbers above, the miners would still be earning 10 times more money compared to last time reward halved.

I want to add to what I mean by that question.
You know the last block will be mined by 2140 the total number of BTC in circulation to be pegged at 21m.

That shows by then the reward for miners will be transaction fee. Will this be enough to cover the operational cost and to break even?

[jago25_98]

Actually read a news article that the Halving might not have cause the big previous bull run and might not have done it this time. Covered that in todays Analysis and News video https://youtu.be/dowwTpAd0-k

But looking at all world events: Money Printing, Trade Wars, Hyper inflation, COVID-19 and so on I expect a bull run coming. However it might drop first but I see the halving event as a possible contributor to a bull run of Bitcoin.

[so98nn]

Well, Halving automatically reduce the reward of miners by 50%. The question is what'll happen to their revenue since mining is a very capital intensive business?

you don't have to worry about miners' revenue. when miners were getting paid twice the current amount of bitcoin for their work (ie. 25BTC) they were earning $6,250 per block but now with half that amount of bitcoin (ie. 12.5BTC) they are earning $108,000. even if we had 4 halvings tomorrow they are still earning more money than 4 years ago.

Excellent analysis. It is so logical and making all the concepts clear now. Since halving the price has to go above automatically or may stay stagnant, whatever may be the case, miners revenue rises potential due to rise in demand.

I gotta say, whats the case with future? Let us assume all of it mined then how they will generate the revenue? Would it be the fees Or still some sort of reward. Surely there wont be any BTC to be generated anymore, how the tech will work in that period is the real question though. Now we get that halving is just process on our way to until final BTC generated. But, what then after? 

[Sanugarid]

We've seen the 2 halving making price changes significantly from the past. In my opinion, we already have set the market into different situation now that we might overlook the other factors like economic crisis and global pandemic which we did not have during the past halving.On top of that is the price of bitcoin, it is very high right now that I don't think it could go beyond the ceiling or making a new ATH. I'm still expecting a bull run before the halving occurs, if that's not going to happen then it's all done for bitcoin.

[BrewMaster]

On top of that is the price of bitcoin, it is very high right now that I don't think it could go beyond the ceiling or making a new ATH.

how do you define "high" because that is a comparative thing. so what are you comparing bitcoin with when you claim its price is "high" and can not increase? keep in mind that you can't just choose an arbitrary number and say it is high because it is close to your arbitrary number.

[CarnagexD]

For this coming having we are looking forward to making a profitable market income if the bitcoin because from the previous year of 2016 is the recently last halving and also that year the market price and the bitcoin becomes more popular and again with a lot of adaptation and innovation regarding with the use of technology and make more faster transaction many people will encourage to make the join and to be included into the world of bitcoin just to make more profit and income which is good because they are now rapidly spreading the use and benefits of the use of cryptocurrency and the bitcoin. Still, it is too hard to predict what is the expected next market movement of the coins.

[The Cryptovator]

To be honest most of us just over exited regarding bitcoin halving and highlighting only price trends. Seems to me no one curious about the main theme behind of halving. Lots of thread has been created about this halving occasion. However, whatever price we are experiencing that's not bad IMO. Because we all know the current situation about COVID-19. So price would be something reasonable above $10K (it's just my expectation, not prediction). Regarding miner benefits, there is chance increase little transaction fees since mining reward will be half from current reward after the halving. So they aren't going to loss much IMO.

[Casdinyard]

On top of that is the price of bitcoin, it is very high right now that I don't think it could go beyond the ceiling or making a new ATH.

how do you define "high" because that is a comparative thing. so what are you comparing bitcoin with when you claim its price is "high" and can not increase? keep in mind that you can't just choose an arbitrary number and say it is high because it is close to your arbitrary number.

Well I guess he said it is "high" because he mentioned the past 2 halving events. High in price compared to the past halving?

I know you're also skeptical about this year's halving coz almost everybody does. There are pretty much speculation that it will explode and the others says it won't. It is really hard to deliver words for the halving that will happen in less than 10 days, the uncertainty of it makes the market more interesting yet scary. And yes, we are not really sure that halving always impact the price of bitcoin positively, we cannot rely on that data having no basis.

[Wenbing]

On top of that is the price of bitcoin, it is very high right now that I don't think it could go beyond the ceiling or making a new ATH.

how do you define "high" because that is a comparative thing. so what are you comparing bitcoin with when you claim its price is "high" and can not increase? keep in mind that you can't just choose an arbitrary number and say it is high because it is close to your arbitrary number.

You are correct when you say high is a comparative term. I guess he used the term "high" to actually compare the present price of bitcoin with when the price was low this year.

[SpanishSoldier]

1. The historical trend has shown that the two Halvings had corresponding rise in price of BTC.

So, will this 2020 Halving also bring about a surge in the price of BTC considering the coronavirus pandemic?

Historically, ATH happens one year after halving.

To be specific, 2013 ATH came 368 days after halving in 2012. 2017 ATH came 525 days after halving in 2016.

So, if the trend continues, next ATH will be in 2022.

[DeathAngel]

The price won’t rise sharply immediately after the halving. It always seems to take a while, I suppose once the reduced supply of new coins takes effect.

[ololajulo]

We are expected to be bullish after halving even with price dump. We have had the bottom in the market already we are just expecting the market to provide a way money will flow in the space, through startup and existing project or other new idea. I believe profit at 2-3x on every investment in short term in bitcoin value can waken the market. Consistency for just 3-6 months will remove the negative sentiment in the market and attract both old investors and new.

[SkeletorHC]

Hello All,

Hope that you're fine and safe!

In the past halvings it seems that even the cut was made, the price in the beggining decrease for quite some time, and after few weeks, it started to increase to values that we know.

So it's a good time to sell?

Thanks

Best Regards
Hugo

[bearexin]

As for the number two, when the Bitcoin halving is done, yes it will reduce the reward that miners are getting after they finish mining Bitcoin. A lot of miners will be left with the options to either quit or continue with their mining and gaining nothing from it. The only way this can change is that if we can maintain the demand at a higher rate after this Halving, then the price will increase and miners will be able to benefit and keep their mining business.

If it's not like that, then the majority of the miners, especially the smaller ones, are probably going to quit from mining Bitcoin. As for the number, I hope that's going to be the case this time around. That's what a lot of us has been waiting for a long time now.

[pooya87]

<snip>
i broke down the numbers above, the miners would still be earning 10 times more money compared to last time reward halved.

I want to add to what I mean by that question.
You know the last block will be mined by 2140 the total number of BTC in circulation to be pegged at 21m.

That shows by then the reward for miners will be transaction fee. Will this be enough to cover the operational cost and to break even?

it is not possible to answer at all because you are asking me to predict what is going to happen in a century from now. it is already hard to know what the future in 5 years is going to be like let alone 100. with that said the design of bitcoin is based on the assumption that when block reward becomes so small the total transaction fees that a miner receives should cover their cost of mining in the future.

[mahilchii]

To be honest most of us just over exited regarding bitcoin halving and highlighting only price trends. Seems to me no one curious about the main theme behind of halving. Lots of thread has been created about this halving occasion. However, whatever price we are experiencing that's not bad IMO. Because we all know the current situation about COVID-19. So price would be something reasonable above $10K (it's just my expectation, not prediction). Regarding miner benefits, there is chance increase little transaction fees since mining reward will be half from current reward after the halving. So they aren't going to loss much IMO.

I agree with you people are very excited to know the price of BTC Halving but the fact is no one has the exact answer for this, so called analyst are coming with unbelievable predictions and the threads people are creating is marginal. Most of them are wondering like BTC price will skyrocket again if this happens well and good, To be honest even I am not expecting a big change as we are in tough situation of COVID-19 my thought is the price might reach 9k - 11k..