The Bitcoin Halving is estimated to happen very soon. In fact whilst I am writing this it is due in just 2 days. See the countdown here.
So firstly, what is the block reward halving?
As there will only be 21 million BTC created ever Satoshi Nakamoto designed the Bitcoin mining reward to decrease over time. The reward that is currently received for finding a block is 25BTC. In approx 2 days that will become 12.5BTC. Simple economics suggests that if the supply falls and demand stays at least the same, the price will rise. I don’t personally see that the world would immediately stop using Bitcoin in the next 2 days so this is a very likely scenario. The Bitcoin halving takes place every 210 000 blocks and happens approximately every 4 years.
Worst Case Scenario?
There are also some other possible outcomes. If the price doesn’t rise enough (which it sort of almost already has compared to the beginning of this year) a lot of smaller miners might need to move on to other ventures as it is unlikely anyone would be mining at a loss just for the sake of it. This would give more power to the huge mining pools. 70% of mining is already done by huge mining pools in China. And this might lead to a different problem that might affect the decentralization causing the trust into Bitcoin to decline. Coinbase published quite an insightful article yesterday on a possible threat to the survival of Bitcoin. It reads:
Perhaps the most infamous potential attack, known as a ‘51% attack‘, would find a single entity introducing a version of the blockchain that it controls and is accepted as valid. While academics have argued attacks can be carried out with a smaller percentage of the network, at 51% of the hashrate, such an attack would be almost guaranteed to work.
This is however a rather unlikely outcome as the mining companies would essentially be shooting themselves in the foot.
Get some coins!
I reckon we will see the price rise back over $1000 mark after the Bitcoin halving, hence I am stacking them away patiently. The price has done a little pullback just today so this is a great buying opportunity. I am buckling up for an awesome ride. I’ve also just recorded a video on the topic of bitcoin halving. I will do my best to edit it tonight and have it up and posted tomorrow 🙂
If you too want to get your hands on some Bitcoin before the halving you could try these options:
- Buy from an exchange
Nowadays a pretty easy process. Get an account, deposit some cash and buy your coins. You can then withdraw your coins to your wallet or some exchanges also provide you with a wallet.
Like Coinbase for example (they’ll give you $10 worth of free BTC if you purchase $100 of coin through my link. Super awesome!)
- Buy from someone who has coins
Ideally should be someone you know and trust because Bitcoin transactions are irreversible. Or you culd use a third party or escrow service. I’ve tried a few of those and my best experience has been with localbitcoins.com.
What are your thoughts on where the Bitcoin price might be going after the halving? Let me know in the comments!