Topic: 2016 Halving: Could It Actually Kill BTC? (Read 2742 times)

this could explain some of them don't pay the bill, cough gawminer cough, they are investing in new asic generation


the price reacted before the halving happened, and then after the halving the price continued to climb

Just look at the history: reward halved once already and the price did not react immediately. Did bitcoin die?

Actually, good thinking.  The chip developers have the power to control bitcoin mining.

(emphasis mine)

I find this assumption especially interesting here.  If no traders give a thought to block subsidy then it may be valid.  However, if sufficiently many traders make this assumption and follow the logic, they will have a strong incentive to demand more bitcoins today and fewer bitcoins in the future, hence corrupting the assumption.

This reminds me of "Guess 2/3 of the average".  A number of players each secretly write down a number from 0 to 100 (inclusive).  The numbers are then collected, and 2/3 of the average is calculated.  The player with the number closest to 2/3 of the average wins.

Your logic puts in mind the strategy "choose 100/3" which calculates this to be the best value based on the assumption that most other people are not giving any thought to their goal and are simply selecting numbers at random.

To clarify, I don't claim that this is a bad assumption (indeed, assuming all bitcoin traders are hopelessly incompotent is far more accurate than assuming they are all perfectly rational) but I do find it interesting.

Nothing to worry about

The chip developers have a new generation of super chips ready to go

they have been holding them back and as halving arrives the hash will double 

I will always use the term higher probability and to say that it's absolute guarantee sounds odd to say the least. If there is such a thing, that person would not even be here posting. Probably the guy would be somewhere in the Caribbean enjoying his life since he'll be hitting bull's eye with every shot that he takes. There are a lot of scenarios and many more that even some of us could not imagine. But somehow I would still go back to the supply and demand basic that we learn from the start. Note that my opinion might sound a bit bullish when talk about halving and how it could impact the price.

We are now seeing some form of demand for btc right? If it's not, I'm sure every coin that ends up in the market would push the price lower since sellers would undercut each other in order to sell. Yeah, you might argue that certain miners would rather hold on to their coins and sell at the right time, but generally whatever reason you can come up with, these miners need to get the coins out to cover operating cost. Right now what we are seeing is mostly supply outnumbering demands and that is why we are on the downtrend. From time to time, price will shoot up (due to some buying) but as far as this goes, we have to acknowledge that it can never sustain itself and eventually price will go down. Somehow, what we are seeing here is still some form of demand that is reflected to support the price of bitcoin.

Now imagine, if we take that same demand that we are seeing today and apply it after the halving. Note that I'm not saying demanding is increasing because to say that it is, means basically a wild assumption. It might even be lower than what it is today. So assuming the demand is close to or almost similar as it is today by June/July next year and miner's reward has been cut from 25 bitcoins to 12.5 bitcoins per block. For price to go up, demand has to overcome supply and since now we have taken the assumption that demand maintains and supply has been reduced by half, shouldn't we see price going up? Unless, the factor of decrease in demand is more than half, then it's the opposite. So here, I would say there's every chance with better prospect.

Oh and talking about the miners, I think we all underestimated the actual cost of mining. It's far lower than that. Even when halving occurs, miners will still stand the chance to make profit. Never mind about some of them shutting down because eventually there will be others who knows how to mine efficiently will appear and fill the gap. So another aspect to watch out after that halving period is whether hash rate is dropping, if it's not, then we know they are okay.

This is certainly not an unreasonable theory.

However, it seems just as plausible to me that demand will actually decrease with the halving.  It could easily be that for all the bitcoins being produced by miners today, most of them are being bought up by wealthy speculators.  These speculators might agree with your theory and so intend to make a profit by buying now and selling after the halving (or even later).  Such speculators increase the demand today and dampen it in the future.  If this practice is sufficiently common then overall demand could fall at the halving.

There are many factors which influence the market rate and a reasonable theory needs only select one and assert its dominance over the others.  This is particularly visible when people argue whether increased merchant adoption (using services such as BitPay) creates upward or downward pressure on the price.

For myself, I do suspect that the price will rise following the halving.  I simply claim that one cannot argue this logically; one has to weigh different factors and make a judgment.

I'm really looking forward to seeing what effect the halving will have on bitcoin's price. I think most people are expecting it to rise but I guess it only will if the demand for coins is higher then. Given that its not till next year I think we'll have a lot more mainstream adoption by then so hopefully it will happen.

not completely predictable, no...but then again, we have no reason to suspect the demand will change.  and if it does change, a reasonable theory is that the demand will increase as an effect of the decreasing supply rate. 

This is a great question. It's amazing there has been so little discussion of this topic.

Or the price decreases or stays the same killing the weaker miners.

This, mining pool operation didn't just invest millions in infrastructure to takes long term losses. They calculated the halving and all other aspects before they invested in mining rigs, electricity etc.

Exit scam.

http://arstechnica.com/tech-policy/2012/08/bitcoinica-users-sue-for-460k-in-lost-bitcoins/

How else? Das ist bitcoin.

well i don't know, you was here since 2012  , you should tell us what happened, and what caused that small rise, probably a combination of both

Difficulty will stay the same (rising slightly) due to better asics.  But some miners who can't adapt fast enough have to close shop.  So those rewards that supposedly go to them will go to the better mining farms. 

As for BTC's price.  Who knows.  But one thing is for sure...  BTC minng farms will have to spend more for equipment to maintain enough power to mine the same amount of BTC.

The people mining on that scale won't be surprised by the halving, and their current hardware will likely be obsolete by that day.

I disagree.  They will develop better asics.

If y = 5x (where x is, for example, a random number between 0 and 1) then we can say that the "5" is a big part of the equation.  This does not however make the output any more predictable than the input.

I think the difficulty will drop by a lot. Who knows what that will do to the price though. Things will get interesting whenever the block halving happens though.

I think that there will always be a market for bitcoin. It could be worth $200, $2000 or $2, (even $0.2) people will exchange goods and services for them. For that reason, I believe it has already succeeded as a currency. It may not be as widespread, stable, etc. as some of the big ones, but it is more successful than some. The fact it's still being used makes it more successful than some currencies.

By 2025, at least one small nation will be using bitcoin and little else as currency.