The bitcoin halving draws closer to the epic halvening. This week. In 4 days (at the time of this writing),
|Not a live feed - 07/05/2016|
After 4 years of getting a 25 bitcoin reward for each block mined, the mining community will have to make due with only 12.5 per block. Don't' cry too many tears for miners, that's close to $8,500 every 10 minutes to 1 hour at current market rate ($675-ish).
There's already faster and more efficient miners for the taking now to soften the blow. The S9 from Bitmain is currently the most viable miner offering for smaller mining operations and hobbyists and for the big boys it's the 16nm chips (which are on-board the S9).
You can buy them now: Antminer S9 ~14TH/s @ 0.10W/GH 16nm ASIC Bitcoin Miner
It's predecessor the S7 is being practically given away. Antminer S7 ~4.73TH/s @ .25W/GH 28nm ASIC Bitcoin Miner for around $400-$500 bucks. That's nearly 15 TH for under $500 dollars which has been pretty much unheard of.
It will only be profitable for a short period of time however, so best bet is to go with the S9.
The Miner Band-aide
As impressive as the S9's stats are however, it's not double the speed or half the efficiency and it isn't going to to make an operations productions a seamless transition from the 25 to 12.5 reward transition. More efficient operations will do that and the companies who have streamlined and deploy their own technology won't feel much of a squeeze. The smaller miners, however, likely will.
Rest assured however, where the S9 arose the S10 is surely not far behind as well as offerings from other mining hardware providers.
What About The Price?
Bitcion, and many AltCoins, decrease in production and limit supply to help control inflation and this will happen again just as it happened 4 years ago. In 2020 the reward will go down to 6.25 bitcoins (about $4,200 at current market rate).
The issue is that it's not just the reward that goes down, the production of coins cuts in half as well, and the difficulty continues to go up.
For those unaware of what the difficulty is, we'll explain briefly.
As the number of miners increases and more powerful systems enter into production as they are manufactured from the latest designs, the easier and faster the latest technology is able to mine bitcoins. When a miner "mines" bitcoins it actually does math. However, it's more like winning the lottery than it is solving math problems. What it is actually trying to do is more like throwing a million darts at a dart board from 100 feet away. Whomever hits the bulls-eye first gets the block reward.
This is done by an algorithm that runs through plazzilions of possibilities to find a nonce. The difficulty makes it harder to determine that nonce. Figuring all of that stuff out requires the math and depending on the difficulty flavor of the day, quite a bit of computing power to do it.
The difficult is automatic and serves additional purposes such as spam control and brute force attack prevention. It is adjusted every 2016 blocks so in a perfect world, 10 minutes per block would equal 2 weeks. If the 2016 blocks take longer, the difficulty is reduced, shorter, the difficulty will rise.
This is why mining companies are on the constant search of "better, faster, cheaper" mining gear. It simply doesn't get easier.
What to expect?
What are people to expect and what is this epic event going to sound and feel like? The short answer ... nothing.
Most likely nothing at all.
The average Joe won't notice a damn thing initially. There are plenty of bitcoin floating around right now, however, in a couple months there may be some pressure on the supply compared to the demand and that's where the price may see additional increases.
It will be interesting to see how the markets adjust themselves, last time we did this things were relatively quiet and it went unnoticed for the most part unless you were mining or actually cared at the time. There weren't many of us around back then and you could still mine on a normal computer.
So What About the Price?
That's easy. We predicted 30% better earnings on an investment made back in March. It's already there. Already done.
The price went up. You're welcome.