Topic: Next Halving in 2016 Mining consequences ? - page 2. (Read 5544 times)

i believe that point 2 would happen.
after the reward halving some more people need to buy bitcoin, that increases the demand. (assuming that they need bitcoin!)
because it would be less profitable for the most to run a miner efficient.

Very, very difficult to predict, but this is a very reasonable guess.

No,i get it the miners are the ones who make the bitcoin or I should use the term "generate".

Just like how the federal reserve prints their currency.
It was awesome in the beginning and everything but now people are just milking the system out of greed.
And it shows,look at bitcoin as it stays low 300s like a B list pornstar. This is terrible.

I don't think that you understand what miners are doing-they are basically transaction validators.
Without mining there is NO BITCOIN.

i just want to say that all the miners are ruining bitcoin just like how the federal reserve ruined the dollar.

Good summary. The next halving in 2016 is definitely bullish for the price but the effect will be integrated in advance to the price

There will be no noticeable difference immediately after, as it will already have been priced in.

It will ease up the sell pressure so that might help the prices. But 2016 is a long time off and much bigger factors in play would have acted to change the price in an unpredictable manner by then.

No answer is good because the price will be pushed higher by the next halving but the market will anticipate it way before it happens, it even anticipates it now

I used to think this way as well, in fact, I think a lot of us did, but the evidence shows that the difficulty before, during, and after the halving stayed about the same (on a grander scale) for at least two months. Only after ASICs starting coming out in late February did the price and difficulty significantly change.

Check the chart if you don't believe it:

Price increase would almost certainly be a result of it. But that factor can't be accounted for now, as its still almost 2 years to go .
And we don't know what the price at that particular time be.

I would expect any bitcoin price increase due to the halving to be small, and to occur before the halving based on people expecting the increase.

There are about 3,600 bitcoins mined and possible sold each day. I am not convinced a fall from 3,600 to 1,800 bitcoins will be significant in terms of the total number of bitcoins transacted each day.  Currently it would represent less than 10% of all daily bitcoin transactions.  

By 2016 the volume of bitcoins moved each day will be higher than it is today and sales of freshly mined coins may be a smaller part of all transactions.  

In summary I am not certain that a fall in 2016 from selling 3,600 to 1,800 mined bitcoins per day is going to make much of a long term difference to the bitcoin price.  By 2016 bitcoin could be transacting a million bitcoins per day.

The fundamental question is - what actually sets the value/price of bitcoins?

Bitcoin price will definitely increase. Currently around 3-4K is dumped daily by miners.
Once the number goes down, dump will decrease, hence price will be expected to increase.

I believe it will be scenario 1).  Everyone knows the change to mining revenue is coming so it is something people can include in planning.

BTC prices may rise slightly before the halving and fall afterwards, as been mentioned by others.  I would be surprised if there was a massive change in bitcoin price.

It is also worth remembering that by 2016 almost all mining will be done in large mining farms in areas with cheap electricity.  These people plan ahead and will plan for the revenue change.

But mining will be greatly affected.  

1) The value of the mining industry will halve overnight.  Suddenly there is half the revenue.   So mining farms will keep marginally profitable miners running up to the halving date and then turn them off.  

2) Difficulty will fall as uneconomic miners, and mining farms, are turned off.  In theory difficulty will fall to half the value before the halving.

3) Sales of new miners will collapse in 2016. People will want to see how the new mining world stabilizes.  In particular people will want to see how fast miners turn of older miners, and the effect on difficulty.  Some mining farms may even run at a loss for a period in the hope that others go under first.  Those left standing after the shakeout will get the spoils.  In the second half of 2016 there may be a glut of cheap uneconomic second hand miners.

How did you come up with those % figures?

The other scenario re price is that since everyone will expect it to go up, there will be a lot of buying pressure shortly before the halving. Therefore, the price may actually go up before, and drop after the halving.

That means its more advanced for everyone, end result less bitcoin being produced.

The mining technology will advance exponentially by 2016 and the halving will be a non event, IMHO

The thing with cloud mining is that it just passes the buck and you're not guaranteed a profit any more than if you bought your own hardware; you (and mostly the manufacturers/hosters) are just saving on shipping, support, etc.  Cloud mining in and of itself barely does anything for profitability, except for those manufacturers/hosters where each contract adds up.

The Gen4 chips are slated for 'soon' or mid-2015.  While that's great for that period, imagine the market gets saturated with those more efficient miners.. it's just back to the current situation, where there's certainly smaller miners already calling it quits.  Halving come mid-2016 isn't going to help that any.  It would have to be offset by even more efficient miners, higher exchange rate, what have you.
And thus it's back to crystal ball gazing and discussions that have been had many times before.  All I know for certain is that it'll be a completely different landscape from the last halving; whether that's for better or worse is something for future history books

Hah - Libreoffice; I didn't even bother saving the file.  However, sources are:
1. Block 210000 at blockchain.info to get the timestamp of when that block occurred.
2. Bitcoin Price Index at coindesk.com, just because it's a bit of an average across exchanges and they have a decent CSV export you can work with.
3. Bitcoin Hash Rate at blockchain.info, again because of CSV export.
The graph was then generated using a simple X/Y plot chart.

That time we experienced ASIC boom. This time it'll be the rise of Gen4 chips and hosted mining aka cloud mining.

ohh