Topic: Halving is Going to Cause a General Effect on all in the Ecosystem - page 2. (Read 467 times)

As others pointed out, it's not like halving's a mystery, a secret that miners are unaware of. Yes, the reward is getting twice smaller, but that doesn't mean that miners will feel discouraged because miners are expected to be interested in a potential profit coming from the future increase of Bitcoin's price. FOMO is can also be triggered prior to halving, with people suddenly becoming more aware that 6.25 now is 3.125 in several months. I don't think that halving has a negative effect on Bitcoin market, miners' motivation, transaction fees or anything like that.

Bitcoin halving has really effect the cryptocurrency market, because many new investors that came in during last Bull Run are feeling disappointed as the crypto market is on the Bear motion that seriously dropping most investors assets to zero dollar. Nevertheless, what need to know about Bitcoin is the nature of the business, base on research, after Bitcoin halving demand always high that skyrocket the price with that other alt-coins follow the uptrend in the cryptocurrency market.

Well, I must say that halving will be helpful for those miners who already know about it. There are many mining farms that will sell their ASIC miners for cheaper rates before and after the halving event, and the determined miners will get a chance to purchase those mining equipment for very cheaper rates. After halving event many of the current miners will stop mining due to less profits from mining operations and that's why the mining difficulty level will drop by significant levels.

But, I must say that those miners who sell their mining equipment and halt their mining operations are the naive ones. I'm calling them naive because they aren't aware of crypto market and the bull run that's going to take place after halving event. Those miners could earn a lot more profit during halving event if they don't sell their equipment right away, but I'm quite sure that most of those miners are just calculating their daily earnings from mining operations and they really don't care much about holding of their mined coins.

There won't be much impact on the general ecosystem of the Bitcoin, but surely difficulty levels will reduce to good levels for at least 2 to 3 quarters depending on some factors. Let's suppose that during the halving event some new and powerful mining equipment are announced and once the miners get those equipment in their hands then the mining difficulty may rise after some time when those ASIC mining equipment's become functional for miners.

What I also seem to be concerned about appears to be similar to your concerns.

So when block rewards decrease, it means that BTC income for miners will also decrease. The minimal BTC earnings should ideally be balanced by the rising BTC price against FIAT to ensure miners can continue to operate their nodes. Of course, it would be a significant concern if the Bitcoin price were to drop, and market demand were to decline, meaning some miners, I believe, would cease operations as they are no longer profitable.

This may leave only savvy miners who harvest their mining results with each new pump or ATH. I've always thought that the ATH formed after halving is the moment for miners to sell the BTC they own, while the subsequent price is the market price traded by everyone.

However, if a price pump doesn't occur after halving, the number of BTC miners could be severely threatened.

Right after the 2020 halving, there was a dip in Bitcoin mining difficulty. The network lost some trillion hashes in just a month's time. It was probably due to the halved block reward. Some miners might have been compelled to pause operations due to the decreased reward. But then it quickly recovered thanks primarily to the fast increase of Bitcoin's price. It only took around 6 months from the halving day for the price to double. So it balanced the halved reward. Miners must already be in profit. From then on, the difficulty climbed more or less continuously except when China announced a ban on Bitcoin mining.

So, there could also be a temporary dip in difficulty after the next halving takes place. But recovery will quickly follow.

As to the possible backlash in general, I don't think there will be any. This has been the design ever since. But regardless of a possible event where some miners stop operating because of losses, the difficulty would just adjust and the network continues to operate as always. And a significantly lower difficulty will eventually be enticing for those who want to mine. The price of Bitcoin will also play a vital role.

This is the reason why if you can see on every block halving we can see how the price of Bitcoin every block halving is pumping.
So for me, it's kinda of every block halving, Bitcoin is looking for price discovery, just take a look on chart and see every block halving in previous, you will see how price is reacting.

The swing between each having is calming down and there is not allot left of the scarcity left to mine. what 10% ish ish? 5-6 around our current price, not large percent of the market cap anymore. The US economy housing and market will be entering some bubble trouble near then negating any spike. If I do see a sharp FOMO rise I will take peoples money and wait for it to simmer back down.

Bitcoin is 75% To Halving, Here’s How Past Cycles Looked Like At This Stage

75% count down to a next halving and if we compare the on-going process with previous halving cycles, we would see some similarities. The market has similarities with each new cycle, new investors come, new capital joins, FOMO appears then panic occurs. It's a repeated psychology of market cycle.

Pyschology of market cycles

It's hard to know what phase we're currently in but Disbelief phase is going to complete in my opinion.

Please as simple as you can I'd love to get your explanation on this.[/quote]


There are cases in that Bitcoin halving can give a backlash on the general ecosystem of Bitcoin mining, and that is if the price fails to adapt to Bitcoin's block halving.  We will know that miners won't run their machines if it is unprofitable for them.  In case the price does not adjust, there will be a possibility that miners will stop mining and the possibility of mining difficulty will be reduced.  But if the price adapts on the Bitcoin halving and miners can see huge profits, then the opposite which is more miners diving into calculating the next block will join the process.

I believe miners have already acknowledged that the payout would be reduced by half following the halving. That is why the miners' moto would always be "today is the best day to mine Bitcoin." However, as the chart shows, Bitcoin prices always rise after the halving. That is, the investor would benefit greatly, but the miners would benefit a little bit. If a miner quits their job, I'm confident there will be another to take their place. So I don't think there's anything to be concerned about there.

From historic data, Halving has always lead to new ATH and this somehow counterbalance the reduced block reward. I believe miners already factor this in in their business that is why we still have investments in the mining business.

The people who will feel much of the effect of halving are those already buying now that the price is still low because if everything happens as usual in every halving year, then we night see very huge high prices.

The probable backlash OP mentioned is that if the block rewards are halved and the price doesn't do well enough to offset the costs of mining a bitcoin block. I had these concerns as well but I'm hopeful that miners will be able to make do and adjust to the new changes when the time comes. Miners definitely have to because when the block rewards get zeroed out, tx fees will be the only benefit for mining transactions.

First, we're all aware miners and not that halving causes their rewards to be halved or cut in half in other terms. Those that have experienced the other halving will continue to run their miners as long as it is sustainable as they'll get their expenses paid through what they mine.
If it turns out that it's no longer happening, they have an option to upgrade or just simply shut down the miners they're running. Basically, what everyone has said here is right and it's up to you on how you're going to extract all of them and how you're going to summarize the actual thing. But anyway, it's always about the adoption of the situation and no matter how many times halving we go through, there will always be those miners that will keep going on.

Thank you for your feedback! I've added the link as a source in my comment. I'll pay close attention to have the source present going forward.

Those for whom mining BTC is a serious business started to adapt for the next halving already after the last halving, because that's what professionals who protect their investments do - and those who are ordinary amateurs are, as always, doomed to failure, in any business. I don't know if you are aware that for the first four years the reward per block was 50 BTC, and now it is only 6.25 BTC - considering your thinking, the whole thing should have failed a long time ago.

It would be good if you could explain to us exactly what you meant when you said "possible backlash on general ecosystem", because I don't see any sense in what you wrote in relation to halving and Bitcoin.

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The use of capital letters has its own meaning, so it makes no sense for the title to be in that format in the future.

^ Technically, it's quite hard to understand those aspects when it comes to mining profit gaining because I am not a miner but from what I have understood, it could be miners experience a direct reduction in their income after a halving event because they receive half the number of new BTCs they used to for every block mined. This can be particularly challenging for miners who operate with slim profit margins, as their revenue is effectively cut in half. However, probably this how BTC was created and it is designed to control its supply and create scarcity. The long-term effects of halvings are often seen as positive for the overall BTC ecosystem or in the crypto world. So the effect would be good for us as crypto enthusiasts.

Bitcoin halving needs months to have effects on price because halving is only an event that has noise to help Bitcoin reaching to more people with halving noise effects. Very general, Bitcoin halving event will help Bitcoin expands its communities, bigger.

For Bitcoin miners, if they are short term miners who don't plan to hold their bitcoins a long time, but only mine and sell bitcoins after each week or month, they can feel shocks from halving. Fortunately after a few Bitcoin difficulty retargets, they will feel better with block rewards and if price rises because of halving, their mining ROI won't be affected too much.

If they are long term miners, with holding plans, they will feel very little pressure from Bitcoin halving.

Halving in mining rewards is predictable and all miners are aware of it. What is not predictable and what significantly affects the profitability of mining is the increase in the difficulty and price of BTC. Investing in mining equipment always involves a bit of gambling.

By the way, mining difficulty has nothing to do with halving. At least not directly. However, halving can have a secondary effect of reducing difficulty, as albert0bsd described.

It will be some cycle:
- Initially, miners experience a direct reduction in their revenue because they receive fewer coins for their mining efforts.
- Some miners may find that the reduced rewards make mining unprofitable, and they may decide to shut down their mining operations.
- The total computing power, or hashrate, of the network may decline as miners with higher operational costs exit the market.
- If the hashrate decreases significantly after a halving, the difficulty will decrease as well.
- A lower difficulty level may attract new participants to the mining industry only if the price of bitcoin rise and this may be the case, keeping the currect demand for bitcoin some constant but the new suply reduced this may lead to an price increment

This is more or less the cycle of th halvings with a lot of small details ommit or oversimplified

What possible backlash? All of the miners(or at least those with half a brain) are already aware of the past and future halving events. It's not as if block halvings are something that's sudden and unexpected.

Now, the question is: will it cause us to have more miners(due to potential increase in price) or less miners(some miners being less profitable due to halving of rewards). Time will tell.