Bitcoin Halving Does Not Necessarily Mean Miners Will Earn Less

With the Bitcoin halving right around the corner, there will be a change coming to how much miners can earn every single day. Although a lot of people will feel the Bitcoin mining process will become a lot less profitable, that will depend on the Bitcoin price by then.

Bitcoin Halving And Mining Rewards

TheMerkle_Bitcoin Price Halving Mining

It does not take a mathematical genius to figure out what the Bitcoin halving will mean. The block reward, currently sitting at 25 BTC, will be cut in half, which means fewer coins generated on a daily basis. It only seems logical this will reduce the mining rewards itself too, as the amount of Bitcoin to be distributed will indeed decrease.

Then again, determining miner earnings is not subject to most traditional rules either. Although they will mine less amount of Bitcoin per day, there is no reason why the Bitcoin price would be the same as it is right now. No one is saying the Bitcoin price will go up immediately when the halving happens, but it is a factor to take into account for sure.

This is what makes Bitcoin so interesting compared to central bank-issued currency. With a very limited supply and a distribution model that grows scarcer over time, there will be some price movements down the line. With fiat currency, there is a constant supply, and additional money is dumped on the market in big batches.

It is impossible to tell what kind of effect the Bitcoin halving will have on mining rewards. A lot of people feel the Bitcoin price will go up to compensate for the reduced number of additional coins brought into circulation every day. Others feel the price will be stagnant or even go down, which would force some miners to halt their operations.

While it certainly is fun to speculate as to what will happen, most of these discussions are quite a mood in the end. It is impossible to predict the future, particularly when Bitcoin is concerned. Free market models do not react as most people would come to expect, and it will be interesting to see what happens.

Source: The Conversation

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2 Comments

  1. jay April 26, 2016
  2. HairyHerry May 8, 2016

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