Can someone explain to me why cutting the rewards for bitcoin mining in HALF is a good thing ? I…
Can someone explain to me why cutting the rewards for bitcoin mining in HALF is a good thing ? I dont get it. Why would cutting the rewards for mining bitcoin be good for miners ? AND why wouldnt miners just switch to another crypto currency ?
Take a look at the glut of ASIC miners for sale on Kijiji for your answer
There are a number of reasons – let’s go broad and then narrow it down Firstly , bitcoin works on a supply and demand mechanism. A more fancy way to say it would be stock to flow. But let’s keep it simple Once mining halves , supply reduces. The assumption is that demand remains , and with the decrease run supply , price of bitcoin will go up. I assume you are asking from an investment return POV. So that is good Q2: it’s not technically good for miners unless the price increases. The assumption is that miners probably have their past mined BTC , increase in value. The point of halving is not to keep miners happy , but to maintain scarcity and in turn increase value 3. The miners can switch. But BTC has such a strong recognition now and so much liquidity. That spurs demand. Which other cryptocurrency has that? Switching is potentially a risk to the miner ( the crypto they mine might have no buyers )
Mike ) ask this question during the Q&A session of our event https://facebook.com/events/s/online-bitcoin-brunch-halving-/547868579204205/?ti=icl You’ll get an answer and could win 100 usd
https://www.bitcoinsuisse.com/research/decrypt/block-reward-halvings-and-the-rational-miner good article regarding the topic
I see alot of people I. the comments saying things that are totally wrong. This is definitely not the page to be on yo learn about crypto.
If alot of miners stop mining due to the halvening, the difficulty drops after maximum 2 weeks. Then its more profatable to mine again, and the miners who stopped mining, will turn it on again. That is why the difficulty go up and down all the time. Well, that and more effektive asics
This mini video explain you what’s halving. https://twitter.com/grayscaleinvest/status/1252679099404955658?s=21
Miners do move, it happens everytime. They give up and sell equipment or mine something more profitable. The thing to keep in mind is when bitcoin crashes so do alts… so where are you going to move your asics to? This is why there’s usually a harsh crippling drop of 40% ish after a halving for capitulation, the mining difficulty drops drastically and people slowly creep back in and start the cycle over.
more demand less supply increases prices, so less amount of bitcoins does not effect mining rewards, already happened twice in the history of bitcoin since its inception.
this price mechanism is built in, so as to appear the opposite of what happens to fractional reserve fiat. any cut in reward is imo made up for with the gradual increase in price.