Why do we need halving? | Bitcointalksearch.org

HeRetiK

legendary

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Quote from: WorldBiz project on April 24, 2018, 01:52:42 PM

Literally halving is translated as halving.

wut

Quote from: WorldBiz project on April 24, 2018, 01:52:42 PM

Today this principle is used in many crypto-currencies with POW-mining, because artificially limited emissions increase the value of each coin.

You pretty much answered your own question, but anyways. It is worth noting that limited supply does not apply to PoW coins only, and that there are PoW coins that do not limit their supply.

That being said: One effect of the halvings that often gets ignored, yet in my opinion is worth a mention, is that it ultimately keeps Bitcoin's power usage in check. Assuming Bitcoin's price finds a stable level, each halving will see miners drop off the network and power usage reduced as a new profitability equilibrium is found.

Another thing I find interesting about Bitcoin's halving is the 4 year cycle of sudden decreases instead of a more gradual schedule. My pet theory is that this 4 year cycle coincides with the public's attention span, causing upward price pressure and therefore media interest whenever the general public was just to forget about Bitcoin.

salterious

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We don't need it, but that is the incentive behind the system. That is why you have incentives to hold as opposed to spending it right now. Wait until the next halving that is when the game is going to get truly interesting, and one that might make McAfee's prediction come true.

ManaMan

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As others have stated main goal behind it is to limit the creation of bitcoins. However we could say for the next X blocks, every block will generate Y bitcoins and after this X blocks new blocks will stop with creation. By the introduction of halving you have longer time that is needed to mine all bitcoins and thus you slowly reduce the supply over time. We have yet to see what will happen when all of the bitcoins are mined, but so far we don't have to think much about it.

javadsalehi

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One of the biggest problems in fiat money is governments can easily print money. It causes inflation and has bad effect on economy. Bitcoin solve this problem by a limited supply. For this purpose the number of generated coins halves every four years.

leonair

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That's the general agreement of the developers of Bitcoin that must be followed and to control the production of all 21 million Bitcoins. If the miners since the existence of Bitcoin up to now are having the same difficulties in mining then there would be an inflation in price of it, the idea of halving is working great and it was created because it has a purpose.

skorupi17

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As I can see, halving exists as a protocol in order to prolong the mining duration of the complete supply of Bitcoin. Imagine if there's no halving at all. Maybe the entire supply is already in circulation by now and the miners have the most number of Bitcoin in existence. Many miners might stop mining by then, making the the mining of block be difficult due to the lack of power [to mine]. Prolonging the mining duration is not just limiting the supply, but, also, in order to sustain the "mining industry" needed by Bitcoin.

bitChipper

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To control inflation...

But it doesn't have to be a literal halving, many altcoins have different block reduction schedules, alot of people think it's more stable to do a block reduction that decreases more slowly overtime rather than an abrupt halving of the total reward.

Can't argue that halvings have a huge effect on price though, the bull run leading up to 20k starting at the halving in 2016.

ovcijisir

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If there was no halving, then number of Bitcoins would rise with every block.

The idea behind halving is to make limited supply of Bitcoins (maximum 21.000.000 Bitcoins).

If there were no halving then there would be unlimited supply of Bitcoins with time, and when there is big supply the prices would fall.

KingScorpio

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Quote from: WorldBiz project on April 24, 2018, 01:52:42 PM

This is a programmed limitation of the emission of crypto currency by reducing the number of new coins mined by miners for each block.

Literally halving is translated as halving. It appeared along with the first crypto currency bitcoin, in the code of which the reduction of the award to the miners is halved every 210,000 blocks, approximately every 4 years. Today this principle is used in many crypto-currencies with POW-mining, because artificially limited emissions increase the value of each coin.

The bitcoin network has already survived two halving in 2012 and 2016, when the reward for the unit was reduced to 25 BTC and 12.5 BTC respectively. The next halving will occur in 2020, and approximately from 2032 the reward for the block will be less than 1 bitcoin.

to limit bitcoin supply making it limited, is important for people thinking its valuable

WorldBiz project

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This is a programmed limitation of the emission of crypto currency by reducing the number of new coins mined by miners for each block.

Literally halving is translated as halving. It appeared along with the first crypto currency bitcoin, in the code of which the reduction of the award to the miners is halved every 210,000 blocks, approximately every 4 years. Today this principle is used in many crypto-currencies with POW-mining, because artificially limited emissions increase the value of each coin.

The bitcoin network has already survived two halving in 2012 and 2016, when the reward for the unit was reduced to 25 BTC and 12.5 BTC respectively. The next halving will occur in 2020, and approximately from 2032 the reward for the block will be less than 1 bitcoin.

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