Halving is a part of the nature of bitcoin.
It's bound to happen.
The effects of it though are of course arguable.
IMO, it will only benefit the value of bitcoins if bitcoins are already in a high demand.
If not, the halving will just make it worse.
Topic: Bitcoin halving to be canceled? - page 29. (Read 33718 times)
In my opinion, a constant money supply model have 2 difficulties:
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
Though I agree with this (in general), the always decreasing money supply is not actually much better, since it is just another extreme (and I would say, of a higher order). Economy expands and contracts in cycles, but cumulatively it still goes up in the long term. Therefore such a schedule of emitting new coins seems to be more potentially detrimental than the constant rate of new money supply...
But bitcoin isint a typical fiat currency subject to inflation, instead it promote interest into holding it by gradually reducing supply. The sole reason for this is attracting long term investors. If you remove the halving and even double it instead, you just create inflation which would stimulate dumping, devaluing, etc.
However counter-intuitive it may look, this is not a good thing long-term, since holding decimates the very base that Bitcoin is built upon. Its value is derived from Bitcoin's utility as a payment system, whereas bitcoins taken from circulation devalue it...
Why? What does it decimate? At worse it will deflate instead of inflate, which is not a problem with the infinite decimal Bitcoin can work on. (More decimal can be added) And then you're using uBTC instead of BTC.
If you get all the coins in the world, will you become super-rich? Nay, all your wealth will immediately become worthless. That's the crux and essence of the matter. And decimals are not a problem even in the fiat world...
A central bank can denominate its money as it sees appropriate
In my opinion, a constant money supply model have 2 difficulties:
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
Though I agree with this (in general), the always decreasing money supply is not actually much better, since it is just another extreme (and I would say, of a higher order). Economy expands and contracts in cycles, but cumulatively it still goes up in the long term. Therefore such a schedule of emitting new coins seems to be more potentially detrimental than the constant rate of new money supply...
But bitcoin isint a typical fiat currency subject to inflation, instead it promote interest into holding it by gradually reducing supply. The sole reason for this is attracting long term investors. If you remove the halving and even double it instead, you just create inflation which would stimulate dumping, devaluing, etc.
However counter-intuitive it may look, this is not a good thing long-term, since holding decimates the very base that Bitcoin is built upon. Its value is derived from Bitcoin's utility as a payment system, whereas bitcoins taken from circulation devalue it...
Why? What does it decimate? At worse it will deflate instead of inflate, which is not a problem with the infinite decimal Bitcoin can work on. (More decimal can be added) And then you're using uBTC instead of BTC.
In my opinion, a constant money supply model have 2 difficulties:
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
Though I agree with this (in general), the always decreasing money supply is not actually much better, since it is just another extreme (and I would say, of a higher order). Economy expands and contracts in cycles, but cumulatively it still goes up in the long term. Therefore such a schedule of emitting new coins seems to be more potentially detrimental than the constant rate of new money supply...
But bitcoin isint a typical fiat currency subject to inflation, instead it promote interest into holding it by gradually reducing supply. The sole reason for this is attracting long term investors. If you remove the halving and even double it instead, you just create inflation which would stimulate dumping, devaluing, etc.
However counter-intuitive it may look, this is not a good thing long-term, since holding decimates the very base that Bitcoin is built upon. Its value is derived from Bitcoin's utility as a payment system, whereas bitcoins taken from circulation actually devalue it in the long run (this is a counter-intuitive part)...
The very idea of bitcoin to me almost classifies as John Nash's ideal money concept because work is exchanged for proof of work trustlessly. Because of this now supply is controlled by real productiveness of society as a whole based on the efficiency of producing electricity (mining equipment efficiency). Any boom will lead to a miner that can mine faster and give more supply to that person(s).
How much one gets per round is different than the overall supply schedule which is set to promote a deflationary cycle which leads to network effect.
Ide
How much one gets per round is different than the overall supply schedule which is set to promote a deflationary cycle which leads to network effect.
Ide
Do you mean bitcoin can be manipulated?
This is not a secret, as soon as you get enough hashing power
Anywhere from 30%~ to 80% let you do increasingly crazy stuff over Bitcoin. Basically bitcoin is protected by the cost to attack. Even small attacks have a cost.
If someone wants to destroy Bitcoin and they have many millions to throw away to do it, it's entirely possible. I don't see Bill Gates deciding to make a mega center to destroy Bitcoin, or the military to research a super computer that have millions time the processing power of a standard unit. But it's definitively possible to do.
Just not economical.
Do you mean bitcoin can be manipulated?
This is not a secret, as soon as you get enough hashing power
To everyone concerned
Guys you seem to be missing the whole point I was trying to make. Please answer the following questions:
1) What is the purpose of Bitcoin halving
2) Does it contribute to the Bitcoin infrastructure and Bitcoin overall robustness in any positive way
3) Who profits most by this
4) If there were no such thing from the beginning, would it change anything in the long run (for the worse)
Guys you seem to be missing the whole point I was trying to make. Please answer the following questions:
1) What is the purpose of Bitcoin halving
2) Does it contribute to the Bitcoin infrastructure and Bitcoin overall robustness in any positive way
3) Who profits most by this
4) If there were no such thing from the beginning, would it change anything in the long run (for the worse)
1) To have a limited total money supply, and by doing so, to be on the opposite side of today's monetary system, where central banks rob the wealth of the currency user by printing more money. This is clearly indicated in the genesis block
The halving doesn't contribute to this in any viable way. You could just set the block reward lower from the start, and be done with that
2) The system will provide maximum protection for its users' wealth, thus get maximum support from its users and increase its robustness for the whole ecosystem
This still remains to be seen, since the last (and the first ever) halving had been in 2012, before Bitcoin started to get real momentum
3) Currency users are benefited most
I would narrow the beneficiaries to just holders and savers. Now we see that they are not the ones that could and would change the Bitcoin story. Enterprise would, but they are not interested in an ever appreciating currency and limited money supply. Kinda seems they are not very interested in cryptocurrencies at all
4) Bitcoin from the beginning can have many other reward halving schemes, or a constant supply, or even constant inflation rate like Milton Friedman suggested. But without forced circulation like fiat money, it is very likely no one will care about it if it does not have a clear benefit of limited total money supply
Then again, the halving scarcely contributes to this in any sensible way. I could even say it is the most risky and strange way of doing just this
Imagine that from the beginning bitcoin have constant supply 50 coins per block forever, then very likely another coin with reward halving will become more popular among users (due to stronger long term appreciation potential), attracting more capitals and eventually overtake bitcoin. Because the cryptocurrency are voluntarily used, if you don't have a good long term incentive mechanism for its users, no one will care
This is a weak argument since it can be countered by stating that you can always create another coin with a reward halving of every 6 months, for example
Suppose that in future the coin supply changed to 1 bitcoin per block forever, then the yearly coin supply is less than 0.25% of the total coin supply, thus will not be able to trigger any observable inflation. But I guess by that time the fees from transactions are already higher than 1 bitcoin per block, so that it does not make a lot of sense from miner's perspective
There are too many variables that cumulatively and non-linearly affect an inflation rate (inflation in the sense of money depreciation, to avoid further confusion), and yet greater amount of variables in the case of an exchange rate. The effect of annual money supply can be easily overridden by other factors, e.g. expansion of adoption, turnover rate, amount of coins burned, etc...
In short, taken separately from other factors, the annual money supply doesn't tell us much if we want to correctly gauge future inflation
2. It becomes difficult to differentiate from fiat money system, which also has unlimited total money supply. An inflative monetary system is what bitcoin tries to fight against. It seems to be an inflation or deflation question instead of a choice of specific parameters
You don't seem to quite comprehend the idea that in the long term it may work (and probably already works) against Bitcoin. I don't say that a massively inflationary currency would be any better. On the other hand, exponentially appreciating currency (for whatever reason) is self-limiting in the long run. My opinion is that the mass adoption of any coin (which is what they all strive for) should not depend on this, i.e. constant appreciation...
Since it will be a game-over one day, the day it crashes spectacularly and irredeemably
In my opinion, a constant money supply model have 2 difficulties:
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
Though I agree with this (in general), the always decreasing money supply is not actually much better, since it is just another extreme (and I would say, of a higher order). Economy expands and contracts in cycles, but cumulatively it still goes up in the long term. Therefore such a schedule of emitting new coins seems to be more potentially detrimental than the constant rate of new money supply...
But bitcoin isint a typical fiat currency subject to inflation, instead it promote interest into holding it by gradually reducing supply. The sole reason for this is attracting long term investors. If you remove the halving and even double it instead, you just create inflation which would stimulate dumping, devaluing, etc.
I'm not an expert, nor can i see in the future of eventualities, but regardless, i very much doubt consensus would be reached to reverse something that is accepted as a fact, hard coded in and even looked up by most people because of its alleged price raise that it will bring.
Basically if you removed this feature, you'd just be creating another bitcoin fork a.k.a. "Altcoin" and i very much doubt there's much interest in the main bitcoiners into jumping boat (as you can tell by the coin's market caps vs existing coin that went with your idea).
In my opinion, a constant money supply model have 2 difficulties:
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
Though I agree with this (in general), the always decreasing money supply is not actually much better, since it is just another extreme (and I would say, of a higher order). Economy expands and contracts in cycles, but cumulatively it still goes up in the long term. Therefore such a schedule of emitting new coins seems to be more potentially detrimental than the constant rate of new money supply...
I have a strong inclination to think that the capped money supply will be a huge disadvantage (or impediment) in the future that might end Bitcoin one day (unless this limit should be raised or canceled completely)
And we are still far from hitting the upper limit of Bitcoin supply, but we may already be on the verge of Bitcoin collapse (or major impediment) due to halving, though we might not yet fully realize it...
It might come as totally unexpected
I remember that during 2012 reward halving, there was a small team who made a "50 coins per block forever" fork, and Gavin even worried about that the fork might gain some momentum. But that fork died after some time, indicating that a coin of unlimited supply is of no interest to majority of the miners
So we could expect something of the kind happen again. Who knows, maybe, this time this "movement" will get some traction. Now that the Bitcoin XT fraud from the core developers seems to be over (haven't heard anything about it recently), it is the miners turn to show up and step forward with their "initiative", lol...
This topic is one of the more dumbest I've read. If canceling the halving is so easy why don't miners increase reward to 1,000 coins per block?
What?
Who has the most power over Bitcoin? Right, these are mining pools. Who is most interested in preserving the current block reward? The same mining pools...
Look at this way: The miner cartels fuck around with basic fundamentals of Bitcoin such as halving (and let alone other stuff such as total supply or whatever they have a say at) and everyone dumps in fear and all they get is a dead economy. So as you can see it doesn't benefit them.
So for the sake of simplicity, Satoshi went for model 3, which could give a very clear signal of limited total money supply
I have a strong inclination to think that the capped money supply will be a huge disadvantage (or impediment) in the future that might end Bitcoin one day (unless this limit should be raised or canceled completely)
I think a capped money supply is a response to the uncontrolled inflation of fiat money supply by banks at the time of bitcoin conception. It's some kind of political statement. There could be a huge disadvantage if the there isn't enough bitcoin to go around for every user. Bitcoin is different to other currencies being easily divisible. We are a long way from 1 satoshi being too indivisibly large to spend.
I was able to understand why bitcoin has capped supply. But for long time I do not understand why halving is scheduled for 4 years. Might be as you stated, at leats for 4 years people will hold it to gain some profit. Really Stsoahi, the master mind. He must be a technical Guru as well as Financial expert. Must deserve a Noble prize.
Bitcoin halving may actually turn out beneficial in the end, though I'm highly suspicious that it won't. But what I'm most certain of is that even if it is beneficial, it is far from being optimal. Since no firmly fixed parameters can ever be in any intricate and delicate system such as Bitcoin...
Look at how Fed's rate is determined and changed
FED constantly adjust their money supply because their money is created out of nothing and its value totally depends on inflation. High inflation will quickly destroy their paper money's value and confidence altogether. That's the reason when inflation picks up, they will immediately raise the rates, even they know that will kick the economy into recession and cause lots of people to lose their job. They don't care, because if the fiat money is crashed, then the whole game is over for them
Bitcoin is different, it has a constant cost that can be calculated easily, so even there is inflation (bitcoin's value going down), people still have a sort of anchor of its value through mining cost. And because the money supply schedule is known, the confidence that bitcoin will hold its value is easier to maintain than fiat money
I have a strong inclination to think that the capped money supply will be a huge disadvantage (or impediment) in the future that might end Bitcoin one day (unless this limit should be raised or canceled completely)
And we are still far from hitting the upper limit of Bitcoin supply, but we may already be on the verge of Bitcoin collapse (or major impediment) due to halving, though we might not yet fully realize it...
It might come as totally unexpected
I remember that during 2012 reward halving, there was a small team who made a "50 coins per block forever" fork, and Gavin even worried about that the fork might gain some momentum. But that fork died after some time, indicating that a coin of unlimited supply is of no interest to majority of the miners
In my opinion, a constant money supply model have 2 difficulties:
1. Economy always goes up and down, expanding, contracting, eventually getting slower and slower. So if the number of coins will always increase while the economy can not grow forever, the coin have a risk of losing their value in future for sure, thus give people a bad long term perspective
Because most of the coins were hold for the long term, the daily coin supply on market will be less and less in a progressively decreasing coin supply model, thus generating a positive expectation of future value increase. However in a constant coin supply model, the daily coin supply on market will be more and more, thus will not guarantee a future value increase even the economy also grows
2. It becomes difficult to differentiate from fiat money system, which also has unlimited total money supply. An inflative monetary system is what bitcoin tries to fight against. It seems to be an inflation or deflation question instead of a choice of specific parameters
Suppose that in future the coin supply changed to 1 bitcoin per block forever, then the yearly coin supply is less than 0.25% of the total coin supply, thus will not be able to trigger any observable inflation. But I guess by that time the fees from transactions are already higher than 1 bitcoin per block, so that it does not make a lot of sense from miner's perspective
I was able to understand why bitcoin has capped supply. But for long time I do not understand why halving is scheduled for 4 years. Might be as you stated, at leats for 4 years people will hold it to gain some profit. Really Stsoahi, the master mind. He must be a technical Guru as well as Financial expert. Must deserve a Noble prize.
Bitcoin halving may actually turn out beneficial in the end, though I'm highly suspicious that it won't. But what I'm most certain of is that even if it is beneficial, it is far from being optimal. Since no firmly fixed parameters can ever be in any intricate and delicate system such as Bitcoin...
Look at how Fed's rate is determined and changed
So the point of reward halving (among other things) was to attract users to this then entirely new technology. I take it, and it might have served well to this end, but I'm still suspicious that nowadays it wouldn't make more harm than good...
It is in fact a large topic about reward halving, I guess Satoshi must have put lots of consideration in this area
There are basically 3 types of money supply scheme:
1. exponentially increasing (fiat money)
2. linearly increasing (Dogecoin)
3. limited (Bitcoin)
In fact, 2 and 3 are almost the same from macro economy point of view: After some decades, the increase in total money supply in 2 will become so insignificant percentage wise, that it is almost like fixed (If the money supply increases 0.1% per year, then its impact on inflation is almost the same as limited total money supply)
Dogecoin initially also had an upper limit on money supply set that was later dropped in favor of increasing it by the same amount of new coins every year. I guess this was a right decision
So for the sake of simplicity, Satoshi went for model 3, which could give a very clear signal of limited total money supply
I have a strong inclination to think that the capped money supply will be a huge disadvantage (or impediment) in the future that might end Bitcoin one day (unless this limit should be raised or canceled completely)
If the reward drops too fast, it will reduce the late adopters' incentive thus might fail to attract enough support before it reach mainstream. If the reward drops too slow, it will be close to model 2 thus give large institutions enough time to control majority of the bitcoins. 4 years period is already a long time for any IT related projets, so let half of the coins distributed during 4 years sounds like a decent pace
And we are still far from hitting the upper limit of Bitcoin supply, but we may already be on the verge of Bitcoin collapse (or major impediment) due to halving, though we might not yet fully realize it...
It might come as totally unexpected
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