Topic: Bitcoin block halving a criteria for Bitcoin survival (Read 378 times)

Maybe. I get the impression that simplicity and reliable coding is of greater importance. Every miner has to calculate it right to avoid wasting energy on an otherwise possibly invalid block. A fractional continueous decrease of the block subsidy looks boring, is hard to verify with just the naked eye and misscalculation is easier.

I get the impression that Satoshi was into marketing alongside. Dropping the block subsidy in every block seems quite boring. There won't be an event, just as we now have every four years with the halving. On the other hand, halving is quite smart, and more attractive as concept. It's also more miner-friendly approach. In each epoch, miners get the same subsidy. A miner who just got into, a little before the halving will have the chance to earn the same as the miner who's being mining for 3 years.

I think there has to be a balance, as there rightly is. Now if cutting in half is the correct approach, debatable. But it seems yours is neither the best.

Even if there were no halvings, competition between miners is still growing, and gradually the need for more powerful ASICs and cheaper electricity makes ever larger corporations more competitive, which can independently streak their own power plants and produce competitive ASICs. I also see that over time, only more and more large centralized corporations can become miners, it becomes more and more difficult for "home farms" with one or more ASICs to compete with them.

The foremost reason is it’s long term sustained release. This is creating that Swift movement in the chart view of Bitcoin if you have seen that already. Remember how the Bitcoin price chart if set to all year till date, how it looks and create an exponential growth 📈 over the period of time? For every Bitcoin halving we have seen one common thing, there is dip, then there is up surge and then there is again bigger dip and then based on that four years event it will go on with ups and down. However, it always been unidirectional. Never seen bitcoin dropping sharply below any prices of the year till date.

May be that states pretty much everything why the algorithm of mining was made that way.

I never said it did
You said hash centralization wasn't in the hand of the government
Was just trying to point out that's its still in the hands of centralize group
Doesn't mean its any better.
Yeah am aware that the hardware(ASICs) upgrades to increase hash per second are expensive thus the increase in Bitcoin mining cost
How is the reduction independent from mining sector?
I thought halving reduces Bitcoin mined per block
Higher hash rate are needed for higher computations to validate transactions and expensive hardwares boast of better hash per second.
As the halving continue it would get harder to get a Bitcoin so miners would continue to pool resources together to get better machines to create higher hashes

Bitcoin mining does not grow expensive due to centralization of mining hashrate except they try to manipulate the network. What makes mining more expensive is the introduction of more sophisticated mining gear.
The reduction in the number of bitcoins introduces every four years is independent of what happens in the mining sector.

BitcoinCore^[1] consists of group of developers who can suggest changes or commits on the bitcoin network and that would be voted on whether to be implemented.

[1] https://bitcoincore.org/en/about/

- Jay -

But in the hand of a centralize group? Bitcoin mining grows more expensive so is the Bitcoin mined per block reduce every four years
This I believe would continue increasing centralization
Which is somehow different from the goal of decentralization
I guess you have been unfortunate to experience or seen this. You said interesting changes take collaboration, does that mean there's like a group that focuses on Bitcoin core developments?
In the case of Halving, I believe what you saying is halving was a way for Bitcoin to strive but not the only way
And then sell after the hype to buy the dip and wait for the next halving
Okay I guess it helps boost expectations

Smoother adjustment would be more boring, instead, halving every 4 years builds a hype around it. Real life is a great example, imagine waking up from 2000 to 2023, you would be shocked, immediately, but life from 2000 to 2023 went smoothly, the level of development we achieved in this timeframe isn't shocking anyone. Just imagine if the last 20 years inflation hits you in one day. Bitcoin halving is as shocking as examples above but here is the deal, this shock makes Bitcoin very, very popular because everyone expects price to rise, everyone starts buying and holding.

Someone can argue that, but: (1) already we see miners sometimes manage to screw up the existing halvings and mine invalid blocks after it, so this would be even harder to get right, and (2) every time the reward decreases there is an incentive to reorg the chain to try to get the greater reward of the prior block instead of the lesser award of the next block.  The infrequent reductions bunch up that bad incentive into a short period that everyone is aware of rather than having the risk spread out.

More speculatively, a continually decreasing award seems like disincentivize participation favoring "Why bother starting when it rewards less than it did a day ago" over "the reward is still as good as its been for the last two years, I better start now before it drops again".

Today the small difference in what you suggest probably wouldn't be enough to cause instability, but early in Bitcoins history it probably would have been because there was essentially no fee income and the use of timelocks for anti-sniping hadn't been invented yet.

I don't think it's possible to do "strictly better": any other choice will be worse in some respect.  But equally I don't think the existing scheme is uniquely the best, since there are alternatives that are worse in some ways but better in others.

Every choice makes some tradeoff and there are many equally valid choices.  I think it's likely that Satoshi considered many valid options and picked the one he thought was simplest.

Indeed, Bitcointalk was long ago abandoned by the vast majority of people actually interested in doing development because it became a waste of their time and energy--  too few insightful discussions relative to ignorant ones and some of the ignorant posters are surprisingly abusive and prolific.

There are also too few translators-- people who understand the technical ins and outs and can explain and justify them though they're not directly involved, that can meat-shield the experts from people who are interested but technically clueless and save people with greater involvement or expertise from wasting their time on energy on people that don't (yet) know the difference between a Bitcoin and a bottle cap. ... though BCT probably has the second largest surviving population of these people of any of the online venues I've seen Bitcoin discussed, the stack exchange probably being the most.

These days I think there is relatively little development anymore that even makes sense to discuss outside of focused discussion around pull requests.  For example, I can't see a reason to have a bitcointalk thread over stuff like "streams: Drop confusing DataStream::Serialize method and << operator" or "refactor: rpc: Remove unnecessary uses of ParseNonRFCJSONValue() and rename it".  Mostly minutia that only matters to people maintaining the codebase, invisible to people who are only using the software.

The poor SNR and abuse isn't unique to Bitcointalk though it reached uselessness earlier than some other channels... I think probably the lack of discussion worthy activity is circularly related:  Interesting changes take collaboration, no one will collaborate when all the venues are toxic, without interesting changes there is nothing to discuss except toxic bullshit, wash rinse repeat.

I will say that Satoshi reason for halving is simply to make bitcoin remain a scarce commodity with limited supply. There is a known cap of 21 million btc, then the reward keeps halving and people keep losing bitcoin and it becomes more and more limited which will keep it valuable over time.
There might be other technical reasons apart from this.

There is a risk for hashrate centralization as fewer mining pools get more and more of the general hashrate, they are however incentivized to do honest work on the network since they have a higher chance at getting coinbase bitcoins with their superior mining gear. If they choose to attack the network, they would lose a chunk of their miners which would drop their total hasrate massively.
Nodes would also refuse to propagate their blocks.

Hashrate centralization does not put bitcoin in the hands of governments.

- Jay -

Doesn't that mean that in the end Bitcoin might become centralized if Price don't meet up with cost? Then why is the government scared of its potential when its future might end up in their hands?

The capped total amount of BTC is directly related to the halving mechanics. Without halvings any capped total supply amount would be or feel somewhat arbitrary. How would you justify any capping without halvings? And you won't benefit from the rather unconventional idea of a deflationary supply which is in total opposition to what fiat does. And likely Satoshi Nakamoto wanted to offer something better than the screwed fiat and finance system with their inflationary and greedy failures.
You can of course argue, what's the purpose of a total supply of little less than 21 Million BTC or 100.000.000 times that in so far undivisible Satoshis? I'm not going to discuss this here now as it has likely been discussed over and over again.

I read somewhere (sorry, no sources available) that the initial supply amount per block of 50BTC (excl. transfer fees) seemed like a kind of sweet spot for Satoshi Nakamoto, not too much, not too few. The right amount to draw attention of people to the idea and to fire up mining and rise the number of miners and hash power to secure the blockchain with trustless and decentralized proof of work. (That we nowadays have a rather small number of mining pools with reasonably sufficient hash power (less than 20 mostly) is another story. I sense a tendency of centralization, at least when you look at pool operators and their control. We'll see how that turns out in the future and with further halvings.)

The transition would seem to me arbitrary and too abrupt. It's all about current market value of BTC and efficiency and price of energy for your proof of work (and there is no real trustless and decentralized alternative, definitely PoS won't be). With the next coming halvings we have to see how miners can cope with it. If BTC market price doesn't rise sufficiently mining at current energy and hardware costs might become unsustainable for the big players with their localized hash power concentration and their localized power needs.
Efficiency and cheep sustainable "clean" energy should thrive and be a key focus for miners (and of course others, too).

I'm not sure if I can believe or say that Satoshi Nakamoto anticipated pool mining and the consequences of that when they invented Bitcoin. That seems a too far stretch to me.

Who knows the true purpose of satoshi, but by looking at the benefits of halving I can give several reasons.

• fresh bitcoins can be more widely distributed by miners with increasingly smaller denominations. Miners may save sats after sats of mining income, but they'll likely release those bitcoins into circulation earlier because even reaching 1 bitcoin intact takes a very long time.
• Equalization of transaction fees and the final halving block rewards in the future for the continuity of mining activities. Everyone knows that in the future the tx fee to miners might be higher than the block reward itself. Just imagine if there were no halvings, from 50btc+fees to 0btc+fees, would you still be mining?

Someone may argue that the coin supply should be adjusted more smoothly, and instead of halving every 4 years, there should be a small drop in every block. For example:

block 0: 50.00000000 BTC
block 1: 49.99983496 BTC
block 2: 49.99966993 BTC
...
block 209,999: 25.00008251 BTC
block 210,000: 25.00000000 BTC
block 210,001: 24.99991748 BTC
...
block N: 5,000,000,000*pow(2,-N/210,000)

Of course, then it would be more complex. However, we have a similar situation with difficulty: it was only halved or doubled in the first version, and then Satoshi changed it before 2009. The same could be done here, we don't need infinite precision, target is adjusted in a nice, compact, 32-bit way, for coin amounts we would need only a precision of a single satoshi, and that would not exceed 64 bits.

So, as you can see, there is always some room for improvements, but the first version was good enough to be successful.

Inflation control is key to the strength and success of any currency, creating the total supply over a century is certainly a more controlled way than doing so in 8 years, the second reason is the desperate need for miners until the currency has matured enough to secure itself without the "desperate need" for miners.

You see, eventually, we will get to that point, but BTC is like a child, you don't throw a kid in the jungle and expect them to survive, you first keep them safe in their crib, then let them take the first risk of sitting down while still supporting their back, then they take more risk when they become strong enough to crawl, walk and etc. yes you could try to force a baby to walk before learning to sit, but the chances of that happening smoothly are pretty slim.

Satoshi knew that 8 years weren't enough for BTC to mature and survive without miners, he also knew the importance of growing the market value of the currency which is directly related to the supply, it's very, very unlikely that BTC would be worth what it's worth today if there were 21m of it back in 2017, it would have been highly more inflated, a lot less secured due to miners not sticking around for the rewards.

Satoshi may not be one of the best programmers or writers we ever knew, but he certainly is one of the best economists the world has ever seen, the plan was executed perfectly and the results are probably better than what he expected, could NOT have been better.

Reasons of Satoshi Nakamoto disappearance is unknown. No one can get Satoshi's reasons and we all can guess with assumption that Satoshi Nakamoto did not suddenly die and it is not reason of the disappearance.

If death is not a cause, it can be Satoshi wanted to leave Bitcoin community to make it more decentralized for developments.

Bitcoin is strong because it is centralized. You can create an altcoin that has lower total supply than Bitcoin, shorter halving time like 3 years, 2 years or just 1 year but it won't become another Bitcoin, with higher price than Bitcoin.

Because lack of decentralization is bad and investors are not interested in centralized coins. Centralization means more risk, rug pull, arrested, coin seizure, blockchain halt.

I think it was less about public knowledge and more about easing coins into circulation. Over a hundred years seems like a long time to wait for the public to come around.

It would have been a flaw for the bitcoin supply to be pumped into circulation and then suddenly go to zero after 8 years. The way it is currently designed gives enough time for any issue related to how transaction fees alone would support mining or how bitcoin would shape up after the last sat is mined to be settled.

Having a sudden drop from 50BTC per block to 0BTC would negatively affect bitcoin.

- Jay -

I see that's statement of "Development & Technical Discussion" which is outdated. These days most technical discussion Bitcoin and some other things which related to Bitcoin (such as LN) is not forbidden  by moderator.


I'd say Bitcoin would still survive due to "first move advantage" and some enthusiast, but i expect Bitcoin would be less popular today.


Your calculation is off, it should be

Not only that. It is also about gradually shifting people to the model, where transaction fees will keep the system running. Without halvings, it would be one huge drop from 50 BTC to 0 BTC, and that would be much worse.

21,000,000 coins / 50 coins per block = 4,200,000 blocks with 50 BTC reward
4,200,000 blocks / 210,000 blocks per 4 years = 20 * 4 years = 80 years
At the moment of writing, we have 791,458 blocks. Without halvings, it would take around 80 years to mine all coins, so 2009 + 80 = 2089, it is still quite far from 2019-2020, or even from today.

21,000,000 coins / 50 coins per block = 420,000 blocks with 50 BTC reward
420,000 blocks / 210,000 blocks per 4 years = 2 * 4 years = 8 years
Edit: Yes, one zero too much, it would take only 8 years.

It is possible to change existing model in a soft-fork way. If you want to produce less coins, then claiming a smaller number of satoshis in the coinbase transaction is perfectly valid. If you want to produce more coins, then you can make a soft-fork, where coins will be locked now, and unlocked in the future, and that will change the proportions in any way you need. Because we could have 100 coins in the circulation, and express each amount as the percentage of the supply.

So, if the first version would have no halvings, then they could be introduced in a soft-fork way, just by assigning 25 BTC to the block creator, and sending 25 BTC to some address timelocked to the future block number. And the same for all other halvings, it could be a perfectly valid soft-fork. Another thing is you have some sidechains with 1:1 peg with Bitcoin, and they start with no coins, they are fully based on fees, and nothing else. The same with LN, where also no additional coins are created. Bitcoin will eventually reach the same point on-chain.