Simply put Bitcoin halving is when mining rewards split in half (by 50%). Because scarcity drives pricing, many see this halving event as the tipping point. Most notably because from a production standpoint, Bitcoin will be as scarce as gold.
Currently Bitcoin halving is expected to happen on may 12th in the evening (HKT). However, the exact time is unknown as this is contingent upon Bitcoin block creation. The rate at which the blocks are mined is ultimately “timer” for the countdown to Bitcoin Halving.
Once the halving takes place, the amount of Bitcoin mined per Block will go from 12.5 to 6.25 BTC per Block. That means the amount of Bitcoin mined daily will decrease from around 1,800 to 900 BTC per day. From a fundamental standpoint the fewer Bitcoin that are produced the less accessible it will become.
Reduced Sell Pressure on Bitcoin
There will be significantly less sell pressure from Bitcoin Miners as the income they make from Bitcoin Mining will half. As it stands now, miners mint US$13,000,000 worth of Bitcoin per day. Which makes Bitcoin Mining a multibillion dollar industry.
Will Miners Shut Down After Bitcoin Halving?
When Bitcoin halves, the income from mining halves as well. This indelible change in BTC reward will drastically change the dynamics and profitability of Bitcoin Mining. For older Bitcoin Mining machines (ASICS), they will likely become obsolete very quickly. Because these machines will begin to produce negative profits and be forced to retire the machines. However, this is a common practice in mining and most other production based industries. When machines become old and ineffective, they are replaced with newer better models. Much like other tech hardware companies like server farms which require annual upgrades to hardware.
There is little to no risk that Bitcoin will run out of miners. Even after halving, 900 BTC per day will still be mineable. Miners will be looking to be more competitive and source cheaper electricity. Additionally, Bitcoin difficulty can drop if there is less hashrate on the network, meaning it will be easier to mine Bitcoin.
Hype, Expectations, and Predictions
Many industry leaders are projecting exponential growth. These figures vary wildly from US$20,000 to some projecting US$1,000,000. Many charts such as the one above have emerged projecting a “pump” in the price of Bitcoin. The chart Below shows the LOG price of Bitcoinover time, with an ascending trend indicating the potential rise to US$250,000 and even US$2,000,000 for the price of Bitcoin. It’s important to note that by nature Bitcoin and Cryptocurrencies are highly volatile and historical trends don’t necessarily predict future behavior.
Bitcoin Halving is regarded by many as a milestone for the cryptocurrency for many reasons. Scarcity aside, Bitcoin was created as a byproduct of the last financial crisis. Because of the current financial crisis many view this as a real test of Bitcoin’s effectiveness as a decentralized currency. We are beginning to see signs of decoupling, although it is still too early to tell if this is definitive or not.
STATS
| Total Bitcoins in circulation: | 18,346,588 |
| Total Bitcoins to ever be produced: | 21,000,000 |
| Percentage of total Bitcoins mined: | 87.36% |
| Total Bitcoins left to mine: | 2,653,413 |
| Total Bitcoins left to mine until next blockhalf: | 28,413 |
| Bitcoin price (USD): | $7,551.60 |
| Market capitalization (USD): | $138,546,090,165.00 |
| Bitcoins generated per day: | 1,800 |
| Bitcoin inflation rate per annum: | 3.65% |
| Bitcoin inflation rate per annum at next block halving event: | 1.80% |
| Bitcoin inflation per day (USD): | $13,592,880 |
| Bitcoin inflation until next blockhalf event based on current price (USD): | $214,559,835 |
| Bitcoin block reward (USD): | $94,395.00 |
| Total blocks: | 627,727 |
| Blocks until mining reward is halved: | 2,273 |
| Total number of block reward halvings: | 2 |
| Approximate block generation time: | 10.00 minutes |
| Approximate blocks generated per day: | 144 |
| Difficulty: | 15,958,652,328,578 |
| Hash rate: | 111.41 Exahashes/s |
| Current activated soft forks | bip34,bip66,bip65,csv,segwit |
| Current pending soft forks | |
| Next retarget period block height | 628992 |
| Blocks to mine until next difficulty retarget | 1265 |
| Next difficulty retarget ETA | 8 days, 18 hours, 50 minutes |
