Halving

Banks incapable, absent or directly in staging a dramatic drop in their currency

April 30, 2020 by Mr. Bitcoin

Wealth is never destroyed it’s transferred.

When countries devalue their currency just as Lebanon has done to there own people.

The people that worked day to day and year after year to save their money for the future for there children, cutting expenses, living frugally, being disciplined.

To see there own money lose 50% in value and only to see there blood sweat and tears to evaporate in front of there own eyes is sad.

This leads me to believe that inflating away the currency is a way to prevent people from getting to the top.

Banks ensure our accounts from losses of up 250k, but who ensures us when the federal government prints unlimited amounts of money and devalues our currently to zero.

You are always investing even if you’re just holding the US dollar because this is weighed against other assets.

Real estate, precious metals, and Bitcoin is a good hedge against fiat currency but this is not financial advice and invest at your own risk.

Bitcoin Halving 2020

April 13, 2020 by Mr. Bitcoin

What is a block halving event?

As part of Bitcoin’s coin issuance, miners are rewarded a certain amount of bitcoins whenever a block is produced (approximately every 10 minutes). When Bitcoin first started, 50 Bitcoins per block were given as a reward to miners. After every 210,000 blocks are mined (approximately every 4 years), the block reward halves and will keep on halving until the block reward per block becomes 0 (approximately by year 2140). As of now, the block reward is 12.5 coins per block and will decrease to 6.25 coins per block post halving.

Why was this done?

Bitcoin was designed as a deflationary currency. Like gold, the premise is that over time, the issuance of bitcoins will decrease and thus become scarcer over time. As bitcoins become scarcer and if demand for them increases over time, Bitcoin can be used as a hedge against inflation as the price, guided by price equilibrium is bound to increase. On the flip side, fiat currencies (like the US dollar), inflate over time as its monetary supply increases, leading to a decrease in purchasing power. This is known as monetary debasement by inflation. A simple example would be to compare housing prices decades ago to now and you’ll notice that they’ve increased over time!

Predictable monetary supply

Since we know Bitcoin’s issuance over time, people can rely on programmed/controlled supply. This is helpful to understand what the current inflation rate of Bitcoin is, what the future inflation rate will be at a specific point in time, how many Bitcoins are in circulation and how many remain left to be mined.

Who controls the issuance of Bitcoin?

The network itself controls the issuance of Bitcoins, derived by consensus through all Bitcoin participants. Ever since Bitcoin was first designed, the following consensus rules exist to this day:

21,000,000 Bitcoins to ever be produced
Target of 10-minute block intervals
Halving event occurring every 210,000 blocks (approximately every 4 years)
Block reward which starts at 50 and halves continually every halving event until it reaches 0 (approximately by year 2140)

Any change to these parameters requires all Bitcoin participants to agree by consensus to approve the change.

Past halving event dates

The first halving event occurred on the 29th of November, 2012 at block height 210,000. The second halving event occurred on the 10th of July, 2016 at block height 420,000.

The Rainbow Chart is not investment advice! Past performance is not an indication of future results. The Rainbow Chart is meant to be a fun way of looking at long term price movements, disregarding the daily volatility “noise”. The color bands follow a logarithmic regression (introduced by Bitcointalk User trolololo in 2014), but are otherwise completely arbitrary and without any scientific basis. In other words: It will only be correct until one day it isn’t anymore.

Past halving price performance

It is always a debate on what Bitcoin will do in terms of pricing for a halving event. Some people believe that the halving is already priced in by the market and thus there’s no expectation for the price to do anything. Others believe that due to price equilibrium, a halving of supply should cause an increase in price if demand for Bitcoins is equal or greater than what it was before the halving event. Below is a chart showing past price performance of the two halving events:

Top 12 Bitcoin facts

info provided by bitcoinblockhalf