Bitcoin Block Halving – July 2016 – What will happen?!
Opinion and Assumptions on the Bitcoin Block Halving
First of all, I want to say, that nobody can predict what will happen – and who ever say’s he can, is just bullshitting. This article covers my own opinion on Bitcoin halving happening July 2016. But first, let me just briefly explain what this halving means.
Explanation: Bitcoin Halving
The Bitcoin Halving is a coded event, which halves the numbers of Bitcoin per Block from 25 to 12.5. This event will happen on the 420.000 Bitcoin Block, which should be around the 10th of July 2016. This is the second time in Bitcoin history, where a halving will occur – first was on the 210.000 Bitcoin block – where no big price movements have been recorded.
The Meaning for the Bitcoin Market
What this means for the market is far from certain. Simple economics suggest that if the demand for BTC remains constant through the year while the supply is halved, then the price should rise until supply and demand is at a new equilibrium. Which is something nice for all of us who are already in the Bitcoin market.
Prediction after the BTC Halving
What I think will happen as soon as the halving hits:
- 50% decrease in mining profitability – for 2-4 weeks
- many smaller players wont be able to sustain and will quit mining bitcoin for that period of time
- Mining Difficulty will fall by ~50% at the next adjustment
- Until then we will have 50% less hash rate, this means that the transaction confirmation time will double to ~ 20 minutes.
- After the difficulty adjustment, earnings and hash rate will get in balance and only the small players will quit mining bitcoin.
How does Bitcoin Halving affect Mining?
At the moment of writing (30.05.2016), the Bitcoin price has reached 20-month-high (539$). Which is awesome for the bitcoin cloud miners! Of-course, only 12.5 BTC per Block translates to lower return rate. But hey, as stated above, this also translates to a reduction of mining difficulty. This and the higher price might be sufficient to make bitcoin mining still profitable.
Also, don’t neglect the chance of the cloud miners to change their mining currency. They can easily start mining any other profitable cryptocurrency at any given time! As long as you can easily mine it with ASIC hardware.
Fun fact, each time the block rewards gets cut in half, we get closer and closer to the end of Bitcoin production.
What do you think about the Bitcoin Halving in 2016?
Please let me know, i would like to discuss this further with you! Add your comment below.
Know more than others on any Blockchain Party!
Join more than 5000 others to receive the breaking news and weekly summaries! No ICO spam, we promise.
You have Successfully Subscribed!