This is not the first halving reduction built into protocol. Satoshi built into Bitcoin, and I realized it will have little effect on the upcoming price action, halving will continue into the year 2140 when all 21 million Bitcoin is mined and the miners are paid in transaction fees. The miner is part of the high-speed computer network matching all the trades, and when you make a trade on Coinbase or Kracken, some Antminer is searching to try and match the block and get paid. The miners are the size of a shoe-box and eat electricity making it prohibitive for the average Joe to mine Bitcoin.
The miner gets paid in a Bitcoin reward for solving the puzzle, and connecting the buyer and the seller, much like a trade matching engine that occurs in the stock or commodity market. The difference is that matching these blocks and having them transparent in a visible ledger is the life-changing nuance markets have needed. The block-chain for Bitcoin is a cheaper, faster, and more efficient way to match trades that all markets will adopt in the future, a brief overview of Bitcoin’s halving schedule shows:
- 2009: Bitcoin mining rewards start at 50 BTC per block
- November 28, 2012: The first Bitcoin halving takes place to reduce mining rewards to 25 BTC
- July 9, 2016: Second halving takes mining reward down to 12.5 BTC
- 2020: The third halving will see the reward fall to 6.25 BTC.
The last Bitcoin will be mined after the 64th halving event, which should take place around 2140. After the last Bitcoin gets mined, the miners will rely entirely on transaction fees as a means of revenue, instead of the block reward.
Bitcoin halving has never really affected the price so we don’t expect it can be the singular market driver to move the needle, Bitcoin is currently waffling between being a haven for investors and regulators are still debating if it is an asset or a stable token, or a currency. Bitcoin is the Mothership. It is the ESPN of information in the world of digital currency and will become the most important brand in the world as the price rises.
Where Bitcoin goes from here will determine how quickly the token enters the mainstream as a payment method and will do more as a unit of barter than any asset known to man. It will take time, and 2140 is plenty of time for the miners to perform the trade checking function and suck electricity as they compete for Bitcoin morsels.
Pay attention to Bitcoin, but the most important thing to watch with Bitcoin is the price, it tells you everything you need to know.