EOS Kingpin Daniel Larimer: After Next BTC Halving, Bitcoin’s Mining Costs Will Exceed Rewards
Daniel Larimer: After Next Halving, Bitcoin (BTC)’s Mining Costs Will Exceed Rewards
Bitcoin (BTC) is set to have its halving in the block rewards next year. This means that the miners will only start receiving half of what they were so far as soon as 210,000 blocks are mined.
Now, the CTO of Block.one and founder of Steem, Daniel Larimer, has talked about the upcoming halving. According to him, the event would make Bitcoin mining unprofitable as the cost of mining would be bigger than the profits.
While he did not affirm exactly that the next halving will do what he promised, he did affirm that eventually, the block rewards will not be enough. This, he believes, would make the demand for the transactions to be the biggest factor for driving transactions.
According to the consensus created by Satoshi Nakamoto, the block rewards should be halved at around every four years. Initially, they started at 50 BTC. In 2012, they halved for the first time and the rewards went down to 25 BTC. In 2016, the event happened again, which got us to the current level of block rewards: 12.5 BTC.
At the moment, the next halving is set for next year, when the rewards will be brought down to 6.25 BTC. The cycle will continue for a long time. Some people have calculated that block rewards will be halved until around 2140 when the Bitcoin system is supposed to be very established already.
People Commented On Larimer’s Predictions
Many people on Twitter commented on what Larimer said. According to a user called Slipstream, the reduction in block rewards will make the transactions eventually run only on fees, which will change how everything works.
Another user called HotelCryptofornia has affirmed that Bitcoin mining was already out of reach in 2013 and that this will only get worse, which will eventually cause the concentration of the network.
Should Bitcoin Stop Halvings?
There is an ongoing debate on whether Bitcoin should just stop halving its rewards or not. While a minority argues that it should, most people would see this as some sort of heresy. Halvings prevent inflation, however, if you do not want inflation to grow, you will have to pay higher fees eventually.
However, some people agree that prices tend to go up when halving occur. Crypto traders like PlanB have already talked about it and created a model in which the next halving might be the catalyst for a new bull run in 2020.