BIP: CREATE STABLE PRICE RISE (+FASTER ADOPTION) BY SMOOTHING THE 4-YEAR HALVING - page 2.

cotrader_com

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Disrupting the global investment funds industry

I wasn't arguing against the reduction in the block-reward, but rather against the harsh and sudden 4-year schedule instead of a smooth per-block micro reduction that would achieve the same thing, without harming price stability - a desirably quality of good money.

Quote from: flying_bit on November 25, 2018, 11:47:32 PM

Quote from: cotrader_com on November 25, 2018, 10:57:28 PM

Dear Satoshi, did you want an unstable coin, or why the harsh 4-year halvings?

Bitcoin's 4-year block-reward halving schedule arguably exacerbates wild price fluctuations, instead of a steady rise.

Why not have a 0.0000033% per-block reduction of the block-reward (to achieve the same halving in 4 years, but smoothly)?

Wouldn't it be better in that it'd support stable price/rise?

This would help grow new userbase, now scared to hold, and prevent the generally destructive crashing waves of huge price falls.

first of all, bitcoin halving will due to happen on 2020. Halving is happening due to the fact that there's only limited bitcoin supply of 21 000 000 (which we all know) and with halving happening there will be more difficulties in mining and because of this difficulties bitcoin value will suppose to rise which ofcourse due to scarcity like gold. And yes, that's how satoshi nakamoto wants to happen. If you look at bitcoin roadmap we're still in early stage of bitcoin development.
So if I we're you, bag some while it's cheap coz when halvening happens on 2020 price will surely skyrocket.

cotrader_com

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Disrupting the global investment funds industry

There is often great news that doesn't drive bitcoin prices up. We can't know the exact effects as we can't repeat the experiment.

However, basic economics and monetary theory, and numerous historical examples, both even discussed in the book "The Bitcoin Standard" itself, explain that the Stock vs Flow of a currency defines its hardness.

Suddenly halving this ratio (or inflation rate), instead of smoothly doing so, seems like an notably sub-optimal configuration that negatively affects an important property of good money - stability.

Quote from: pooya87 on November 25, 2018, 11:43:13 PM

Quote from: cotrader_com on November 25, 2018, 11:28:37 PM

How do you know that the sudden halving of the block-rewards doesn't affect additional volatility?

it does affect the volatility but it is not the only reason and it definitely is not the biggest reason. in other words even if distribution of supply had another model the price would have still been moving in the same roller-coaster manner.

for example price didn't go up to the moon in 2017 because the reward was halved a year ago! it went up because some big countries like Japan adopted bitcoin as a currency and many other countries started having similar friendly regulations towards bitcoin. additionally we finally had a scaling solution for bitcoin be implemented. and like always because the media was talking about bitcoin nonstop! that was a process to speed up the demand and that caused the spike which would have happened even if reward was different.

mk4

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Paldo.io 🤖

Regardless of how the mining scarcity is implemented, that really won't do much right now when talking about the volatility. Bitcoin is volatile simply because it's being widely used as a speculative investment, and not really as a store of value. A good percentage of all the bitcoin holders bought bitcoin for the sole reason of making profit, and nothing else; hence we have these huge hype cycles. Bitcoin could already be at 21-million mined BTC right now and bitcoin would still be very volatile.

I think your "solution" to reduce price volatility and increase price would only work if we assume that everyone simply just holds; which is definitely not the case.

Quote from: cotrader_com on November 25, 2018, 10:57:28 PM

Bitcoin's 4-year coinbase halving schedule arguably exacerbates wild price fluctuations, instead of a steady rise.

?

flying_bit

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Quote from: cotrader_com on November 25, 2018, 10:57:28 PM

Dear Satoshi, did you want an unstable coin, or why the harsh 4-year halvings?

Bitcoin's 4-year coinbase halving schedule arguably exacerbates wild price fluctuations, instead of a steady rise.

Why not have a 0.0000033% per-block reduction of the block-reward (to achieve the same halving in 4 years, but smoothly)?

Wouldn't it be better in that it'd support stable price/rise?

This would help grow new userbase, now scared to hold, and prevent the generally destructive crashing waves of huge price falls.

first of all, bitcoin halving will due to happen on 2020. Halving is happening due to the fact that there's only limited bitcoin supply of 21 000 000 (which we all know) and with halving happening there will be more difficulties in mining and because of this difficulties bitcoin value will suppose to rise which ofcourse due to scarcity like gold. And yes, that's how satoshi nakamoto wants to happen. If you look at bitcoin roadmap we're still in early stage of bitcoin development.
So if I we're you, bag some while it's cheap coz when halvening happens on 2020 price will surely skyrocket.

pooya87

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Activity: 3472

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Quote from: cotrader_com on November 25, 2018, 11:28:37 PM

How do you know that the sudden halving of the block-rewards doesn't affect additional volatility?

it does affect the volatility but it is not the only reason and it definitely is not the biggest reason. in other words even if distribution of supply had another model the price would have still been moving in the same roller-coaster manner.

for example price didn't go up to the moon in 2017 because the reward was halved a year ago! it went up because some big countries like Japan adopted bitcoin as a currency and many other countries started having similar friendly regulations towards bitcoin. additionally we finally had a scaling solution for bitcoin be implemented. and like always because the media was talking about bitcoin nonstop! that was a process to speed up the demand and that caused the spike which would have happened even if reward was different.

cotrader_com

copper member

Activity: 20

Merit: 0

Disrupting the global investment funds industry

How do you know that the sudden halving of the block-rewards doesn't affect additional volatility?

Basic economics principles of supply and demand suggests that a sudden halving of the supply inflation rate would cause prices to rise, causing a fomo wave, leading to a boom/bust cycle.

Indeed, the price history chart is not inconsistent with this explanations (although the sample size is small).

(Thanks. Yes, I meant the block-reward halvings.)

Quote from: pooya87 on November 25, 2018, 11:06:28 PM

Quote from: cotrader_com on November 25, 2018, 10:57:28 PM

coinbase halving

it is called block reward halving since it is the "reward" that halves.
coinbase is a transaction, you can't halve a transaction!

Quote

Why not have a 0.0000033% per-block coinbase reduction (to achieve the same halving in 4 years, but smoothly)?
Wouldn't it be better in that it'd support stable price/rise?

because price isn't volatile because of halving to become stable if we change it!

pooya87

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Activity: 3472

Merit: 10611

Quote from: cotrader_com on November 25, 2018, 10:57:28 PM

coinbase halving

it is called block reward halving since it is the "reward" that halves.
coinbase is a transaction, you can't halve a transaction!

Quote

Why not have a 0.0000033% per-block coinbase reduction (to achieve the same halving in 4 years, but smoothly)?
Wouldn't it be better in that it'd support stable price/rise?

because price isn't volatile because of halving to become stable if we change it!

cotrader_com

copper member

Activity: 20

Merit: 0

Disrupting the global investment funds industry

Bitcoin's 4-year block-reward halving schedule arguably hurts stability - an important feature of good money.

The halving of the inflation rate drives prices up strongly, causing a fomo wave, but when the hash rate catches up, prices fall back down in a destructive crash.

Why not use a 0.0000033% per-block reduction of the block-reward (to achieve the same halving in 4 years, but smoothly)?

This per-block reduction can be implemented to begin 2 years after the 2020 halving, in 2022.

This way, miners don't lose anything. Many miners have been put out of business by the wild price fluctuations, so this might be a welcomed change.

This should support a smoother price increase curve, and therefore also help bring new users, who are now unsure when to enter the market and when to hold, as well as prevent the industry-wide destructive crashing waves of huge price falls.

If there was a constant upwards motion, and not big spike, then 3 years down, then adoption demand should be high and constant over the entire 4 years.

Bottom line, do you think it would be an improvement, if it could be done smoothly in 2022?

https://twitter.com/cotrader_com/status/1066861393528463360

Topic: BIP: CREATE STABLE PRICE RISE (+FASTER ADOPTION) BY SMOOTHING THE 4-YEAR HALVING - page 2. (Read 327 times)