Topic: Bitcoin halving and hardness (Read 246 times)

no
the main rule of bitcoin is this

the coin reward is not a calculation of the energy..
its a hard rule of X coins per block..
2016 blocks a fortnight
half X every 210,000 blocks..

the energy usage does not determine coins mined per block. the coins are rewarded at a fixed rate that halves every 210,000 blocks. it does not matter how much hashpower went to it

it doesnt matter if its cpu power blockchain that never used asics or gpu power that never used asics or asic power .. the rule remains..


the effort.. the energy does not determine the coins rewarded. it determines the underlying value people will sell it for.  
the more hard work. the more the coin is worth because people try to refuse to sell at a loss of their hard work/acquisition costs.

Yes, exactly. Hard money.

What you are saying makes total sense mathematically, and I am sure you are right.

I really am not very knowledgeable here, hence why I stressed in the question ceteris paribus.


If all other things are equal -- number of miners, hashrate, price -- will you need 2x as much energy in order to mine 1 bitcoin after a halving?


I am not a trader, so the heart of the question is not about price. This is just for the purpose of understanding.

its not as simple as you say..

people can leave mining meaning remaining miners get more of the share.
remaining miners might use more efficient (easier/cheaper) asics. thus their costs are lower but the hashwork is the same or they use that efficiency to save more money by turning off some. or they add more when there is less competition because they are getting more reward to afford it.

there are many factors at play.

in the real world you cant just ignore 9 factors to base assumptions on 1 factor. you have to use all 10 factors.

Are you asking about this by chance?
https://tradesmithdaily.com/educational/bitcoin-is-the-purest-form-of-hard-money-ever-created-2/
or this?
https://medium.datadriveninvestor.com/bending-bitcoin-the-principle-of-hard-money-ad577bdfbc14

I was waiting for someone to say this .... lol


Bitcoin blocks don't get harder to mine, but surely Bitcoin as an asset/money does? You need 2x more energy to get 1 bitcoin than you did before.

It's weird to think about because "hard" usually refers to the difficulty of the mathematics. I am not particularly well-red about this, though, so it is very likely I am misunderstanding.

Mining affects the price of Bitcoin, but certainly this effect will not be direct or instant. In many of the previous historical models, the price needed about a year or more to start making real gains.
Which means that the decrease in the price of bitcoin from the cost of mining will affect, but it will not be direct or instantaneous, but may extend for a few years.

Put all these assumptions side by side and what happens with economic problems and we may need more than a year after Bitcoin halving

Bitcoin gets 2x as hard when Ms Bitcoin wears something nice to bed.

What can I say, after the halving miners get less reward for the same job, but it doesn't mean bitcoin gets hard. It sure does sound funny though, I give you that.
Remember that mining difficulty can go up or down. It's the reward for mining a block that changes.

miners pay money to give energy to asics to mine bitcoin. it has to be profitable to do this.
if there was half as many units being made. its not a simple half as many asics using energy.. because the price of the unit is also a factor, that keeps the asics competing..

other factors at play..

imagine the price 2020-2023 averaged $30k/btc.
there are some miners that mine with costs of $30k  (a)
there are some miners that mine with costs of $25k  (b)
there are some miners that mine with costs of $20k  (c)
there are some miners that mine with costs of $15k  (d)

lets for pencil demo sake use numbers of the 200exahash
abcd each have 50exa..
all getting the same amount of coin share per day (900 a day/4 = 225each)

in 2024 when coins per day drops to 450
A and B can pull out as their halved share(112.5 each) wont cover costs if the price was the same.
but now C,D continue mining and they get AB share.
so when coins per day drop to 450, that 450 is shared between only CD meaning they still get 225 coins each per day
also the competition. they could add more hash power becasue they can still afford it
after all they were mining at 225 coins where average coin was $30 but they had costs of $15k/$20k. so they can afford to increase hashrate
D can increase 2x meaning 100exa total for him
C can increase 1.5x meaning 75exa total for him
where hashrate is 175exa (seems less then the 200exa before. but now you have to factor in the next gen asics that are more efficient where they can hash more hashes for same cost.)


there are a few different factors at play
ill leave you to play around with the math of that although i gave hints in previous post about the next gen asic hash/electric rate. difference(~double)

Exactly. There could be many different possibilities for this question and future of bitcoin in correlation with the halving. Block halving is big event for miner, the reward is halved from the current reward structure and this is happening since bitcoin was first mined. This means it’s continually halving each time, and by so far it’s reduced to minimal. Thus to keep up the race of mining profitable usually miners will increase the power of hashing (by adding more miners) and thus ROI shifts further. However they will always sell bitcoins prior to halving causing massive dump (so that miners can profit before it’s bearish). In the process world wide buying surge starts and bitcoin slowly pushes itself towards new arena of high price asset.

This is what can be seen from the historical charts. So price mostly will go up if that’s what you wanna know.

I don't know very much about Bitcoin mining, but from the little I know, I can say that... Well, to start from the base.
We all know that every halving reduces the amount of Bitcoins miner are able to mine per block, this makes Bitcoin scarcer for the miners in particular, this can actually influence the price of Bitcoin in the open market in several ways, and one of those ways is sentiment, that is investors or traders sentiments, they think that since Bitcoin has become scarcer for the miners, they probably would not want to sell their mined Bitcoins cheaply in price, then they begin to buy in anticipation for a bull run, I believe this explains why Bitcoin price always goes through the roof mostly when halving is approaching and sometimes, immediately after the halving too.

If bitcoin is the unit of account.

By "hard", I mean how much energy is needed to get 1 unit of bitcoin.

all other things being equal..
if the asics remained the same generation.. the hashrate, difficulty remained the same.. where only the coins halved...
still does not mean asics are getting half as much money to cover their costs(work)
.. the price could double meaning the miners get paid the same.

however change one variable and the paradigm can go in any direction

Very true. I am just asking ceteris paribus for understanding's stake.

even if the hashrate did not change.. asics can still get more efficient.

EG imagine a 200exahash rate.
2020 it was using 95thash asics of 3.25kwh  (29thash per kw)

in 2023 it will be ~300thash for 5.5kwh       (54thash per kw)

meaning half the cost to mine just by using better asics. so when there are half as many coins.. it still ends up the same.. cost per coin (roughly)

so its not as simple as saying half as many coins =double the cost

Actually, that's impossible to happen that you can see hashrate today will be the same until 2024. I'm sure if blockhalving is coming there are more people who will mine because they know the bull market is coming. And the result is not instant since 2024 is the year of blockhalving it will take months or a year to see the price increase due to demand and supply.

I think the question you actually want is that "if the demand today is the same after 2024 blockhalving, Bitcoin will be 2x more expensive than the last year ATH"?

If you talking about the hashrate and difficulty then the difficulty will stay the same but if hashrate increases the difficulty is also increasing. Like they said the higher the difficulty, the more secure.
And mining difficulty is maintained 10 minutes duration for finding new blocks if the network hashrate increases miner will mine blocks lower than 10 minutes duration if it happens then the difficulty will automatically adjust so it will increase just to maintain the 10 minutes duration in finding blocks.

No one can answer you that it is Yes or it is No because you are talking about future. Who knows what will happen in future?

You can check past halvings and Bitcoin makes its new all time highs after each of past three halvings. Future halvings, will Bitcoin repeat it? If it does as the past halvings, it will make new all time highs after future halvings. However, we can not say it will certainly happen. In addition, making a new all time high is probably but making new all time highs that are 2x of past all time high is harder. It is possibly too but harder to achieve.

It can be both. A currency, an asset, a payment tool.

My understanding of what happened on Reddit is that the misunderstanding was indeed due to the word "hard". Many in the Bitcoin community automatically associate this word with the difficulty of the SHA-256 problem one needs to solve in order to mine a block. Therefore, many of the answers were "no, the puzzle will only become harder if the hash-rate increases".

Expensive may be a better word, but that has connotations with market value, which, as said before, is not solely decided by miners. Perhaps "the cost of producing 1 bitcoin", is the best phrase.

Thank you for your help. I greatly appreciate it.

There's a good chance that your choice of words could have been the cause for so many contradictory answers you've got on Reddit? (I didn't look there for your post though, so I may be wrong).
I think that the word you were looking for may have been "expensive"? At least this is how I've read/understood your question "will bitcoin be 2x more expensive than now?"

By "hard", I mean hard Vs. easy money. Ammous talks about this.  I suppose the adjective "hard" in this context is synonymous with "difficult". I didn't use that word ("difficult") because, as you say, it has connotations with cryptography being solved, which is not what I am asking about.

Maybe I have misunderstood what hard means and I am using it incorrectly.