Bitcoin News
Daily diary of what's happening with Bitcoin.
A post by Vitalik Buterin in Bitcoin Magazine (@BitcoinMagazine) describes the upcoming block reward subsidy halving. Excerpts:
“Projected to take place on Wednesday [November 28, 2012] at around 18:00 UTC, for the first time ever in Bitcoin history, the rate at which new bitcoins are generated will permanently be cut by a factor of two,”
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“[The block reward earned by miners is] the only way that new bitcoins come into existence. Any bitcoin that you send or receive was at one point somebody’s block reward.”
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“Bitcoin has a monetary policy that was coded into the system right from the start that reduces the rate over time. […] There will still always be one block coming out every ten minutes, but the number of bitcoins handed out as a reward in each block will come down in sharp steps.”
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“The event that will happen on Wednesday is exactly this; after block 210,000 hits, every block thereafter will have a reward of only 25 BTC instead of the original 50 [for approximately the next four years]”
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“The second hypothesis is actually the one attacked more frequently: that the supply shock has not yet been priced into the market. [Detractors believe that] even if the supply of bitcoins coming into the market from miners will soon cut in half, the supply from traders [who’ve always known this was coming] will make up for it, and the price will remain roughly the same.”
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“There is also another very profound change that will soon take place in the Bitcoin mining ecosystem: the introduction of the ASICs. ASICs, or ‘application specific integrated circuits’.”
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“Thus we are going to see not just a reduction in revenue for Bitcoin’s miners, but also a shift in who Bitcoin’s miners are.”
- http://bitcoinmagazine.net/block-reward-halving-a-guide
- http://bitcointalk.org/index.php?board=57.0 (Further discussion of this topic)
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Bitcoin Money blog (@BitcoinMoney) gives a monthly wrapup on Bitcoin for the month of June, 2012. Exerpts:
“For the month of June, 2012 the closing price of $6.69 was a dollar and a half above the previous month’s close giving a 28% gain for the month. The first quarter had closed at $4.90 so the closing price for 2Q2012 shows a gain of 36%. For 2012, where the price opened at a $4.72 level, the price rise from January 1st now exceeds 41%.”
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“Unlike previous rallies for Bitcoin, this one occurred without there being a major story or significant level of media attention.”
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“The Bitcoin exchanges offering BTC/EUR trading all saw record monthly trading volume levels and most of the other European currency markets such as the BTC/GBP (British sterling pound) and the BTC/PLN (Polish zloty) broke monthly volume records as well.”
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“The upcoming drop in the block reward (expected to occur in early December) is likely one reason [for the price rise]. When that event occurs, the rate of currency inflation will drop from the 25% per-year level to just 12.5%.”
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“The most significant conversion of funds out of bitcoin occurring today happens to be coming from those who are, ironically, enthusiastically showing their trust in Bitcoin’s future.”
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“Miners took in the 226,750 bitcoins that were issued (also referred to as being “mined”) during the month. Using the average daily valuation of $5.99 the value of these bitcoins issued totals a little over $1.35 million.”
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“A speculator unloading bitcoins generally has one option — to cash out at an exchange, whereas smaller investors and consumers holding bitcoins can cash out by spending their coins on goods and services.”
- http://www.bitcoinmoney.com/post/26295113993
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A post on Bitcoin Miner (@BitcoinMiner) looks into whether this is the end for the GPU used for mining. Excerpts:
“In less than six months, block 210,000 will be reached and with that event the block reward will drop by half, to the level of just 25 BTC.”
“Mining operators are preparing by either switching over to more efficient mining equipment or are liquidating operations outright — oftentimes due to the higher capital requirements needed to acquire the modern forms of mining hardware.”
“Even though the GPUs from this post’s photo are offered for sale as being used previously for mining (presumably for many months) they still have a relatively high market value compared to the price when they are purchased brand new.”
“There will be a rotation of hashing equipment. GPUs are being decommissioned where power is expensive and those same cards remain a valued commodity to those with access to power that is relatively cheap.”
A post on Bitcoin Miner blog (@BitcoinMiner) describes how in about a year the quantity of bitcoins issued to miners will drop suddenly by half — something that will impact decisions today. Excerpts:
“For the bitcoin currency itself, that drop has been known since its inception and would already be priced into the exchange rates. To miners, however, that drop will be felt suddenly. One day the income that each Ghash/s earns will be at one level, and the next day that revenue will drop 50%”.
“Anyone evaluating whether or not to buy a mining rig or to add capacity to an existing mining operation today should be keeping this block reward drop in mind in the decision process”.
