Happy Halving Day!

Today Bitcoin reaches 75% of all bitcoins ever created, which means that the mining rewards will be cut in half from 25 to 12.5 bitcoins. The last time (and first time) that happened was on November 12, 2012, when 50% of bitcoins were created and the reward  dropped from 50 to 25.

For the occasion, I tried to look at what the reddit Bitcoin forums said the last time around. Unfortunately, there is no snapshot at the Wayback Machine for that particular day, so that proved impossible.

So I decided to post a couple of links to what people said this time around, so I can point to those four years later when the next halving happens. Here we go.

On price: Reddit thread noting that at the last halving, price was at $12.25, while now it is around $650, and asking people what they will do with their wealth if it goes up another x50 until the next halving.

On the cost of mining one bitcoin: Reuters article about the state of the mining business on this halving day, estimating the cost (95% of it electricity) at $200, which would still leave a generous profit margin at present prices.

Insightful comment in the thread on that article pointing out that from the perspective of a miner, halving of the reward has exactly the same effect on their profits as doubling of the difficulty, which has happened already twice over the past year.

Someone asked a couple of hours before the halving if they should buy their first bitcoins before or after that happens. A nice answer to that: “I’d get in before the 2020 halving”.

From an article at “Marketwatch” on how the halving might affect prices:

Nearly $225 million worth of bitcoin changed hands over the past 24 hours, according to data provided by CoinCap.io. The number of new coins being mined each day — currently about 3,600, or about $2.2 million at the current price — is small in comparison.

Someone from San Diego reported on their project of vertical farming in the desert using solar power and asked if it made sense to use excess solar electricity for bitcoin mining. Rather interesting from my point of view. I recall having blogged about an Australian desert farming project in 2012. And just for the record, I noted the idea of mining bitcoins with desert solar electricity in 2014.

Another thread asks people to predict what will happen to Bitcoin in the next four years. My prediction is that transaction capacity will increase massively, just as Internet bandwidth increased massively with more users coming online. I neither know or care about how that will be done most effectively (block size debate).

Something I wrote last year: Fossil fuel production should learn from the Bitcoin mining schedule and introduce mining schedules for the remaining resources, oil  first.

Why doesn’t oil production have a “halving day”? People still operate as if oil reserves were unlimited, or as if it was possible to burn all the known reserves.

And one personal note: This is the first halving day after I started becoming interested in Bitcoin a couple of years ago. I hope it won’t be the last.

 

Published by kflenz

Professor at Aoyama Gakuin University, Tokyo. Author of Lenz Blog (since 2003, lenzblog.com).

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