There is still 5 months to halve Bitcoin. Is there a causal relationship between the halving and the bull market?
Historically, in 2012 and 2016, Bitcoin halved and the bull market overlapped. Therefore, the currency circle concluded that the link between halving and the bull market.
Whether the halving of bitcoin brings a bull market, people in the currency circle are eager to the extreme, but there is almost no strict logic. People outside the currency circle laugh at us. And this year, the people in the currency circle, with 2019, bitcoin rose in the middle of the year, and it will start to stun, and it will also begin to self-doubt.
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- Vitalik: Ethereum 1.0 will become the subsystem of Ethereum 2.0, PoW will lose its meaning
In the computer world, is Moore's Law similar? Moore's Law is definitely not science, but it has amazingly consistent history.
Moore's Law: The performance of a computer for every dollar will double every 18-24 months.
Bitcoin halving effect: Bitcoin's output is halved every four years, and the price theory doubles.
To better align with Moore's Law, I changed the Bitcoin halving effect: the bitcoin that can be bought for every dollar will decrease exponentially over four years. We call this the Bitcoin halving hypothesis.
Bitcoin's halving hypothesis, is there any underlying support logic?
In economics, the law of supply and demand is an iron law and the cornerstone of economics. The Bitcoin halving hypothesis is ostensibly supported by the law of supply and demand.
Bitcoin production is halved, that is, supply is halved, and even if demand is constant, prices will double. But this is just what it looks like.
The supply of Bitcoin in the buying and selling market is not just mining output. More is the sell-off of historical inventory and the additional issuance of coins caused by some reserves in the lending market. However, these two types of selling pressure cannot be counted.
As for the mining output of bitcoin, as early as 2009, the historical stock of bitcoin started from 0, one block every 10 minutes, and an additional 50 BTC was issued, with a daily increase of 7,200 BTC. The proportion of additional issuances every day is very high. In 4 years, the issuance from 0BTC to 10.5 million BTC. By 2012, it was halved for the first time, each block was reduced to 25 BTC, 3600 BTC per day, and the total amount of bitcoin in 4 years increased from 10.5 million BTC to 15.75 million BTC. And now it has dug over 18 million BTC, producing 1800 BTC per day, which is still less than one ten thousandth of the stock.
In terms of price, before halving in 2012, the price of bitcoin was below $ 10, and daily digestion of 7,200 BTC required a maximum of $ 72,000, and a maximum of 7.2 * 365 = $ 26.28 million per year. After halving, the price of bitcoin has increased by more than 100 times, and once rose to the level of thousands of dollars. Most of the time it was in the hundreds of dollars, calculated as 500 dollars. On average, the selling pressure of miners in one day is 1.8 million US dollars, and one year is 657 million US dollars.
Now the price of bitcoin is $ 7,500, and the market's largest amount of funds to be mined by miners requires $ 13.5 million a day = $ 113.5 million, and $ 4.92 billion a year. This is a very huge amount.
If it is halved after May, the market's demand for coin buying by miners will remain unchanged, that is, there will still be 49.2 billion US dollars of admission funds for one year. Assuming other conditions are unchanged, the price of Bitcoin should at least double, because miner output has been halved to 900 BTC per day.
This is to verify the Bitcoin halving hypothesis from the law of supply and demand.
But obviously, this explanation requires too many premises. The most false one is to assume that the supply of the bitcoin market is composed of mining output, which obviously does not fit the facts. With the halving, more and more bitcoin's historical stock, mining output as a percentage of the total, and the market supply will mainly change from mining output to other.
We can change the perspective to test the Bitcoin halving effect hypothesis. The two halvings in 2012 and 2016 succeeded in testing the hypothesis, and were explained in accordance with the laws of supply and demand, which are more general. But halving in 2020, considering that the supply of the bitcoin market is no longer derived from mining output, the law of supply and demand cannot be used this way.
Considering that the final total amount of Bitcoin is 21 million, it is now close to the total amount. But the number of users is almost unlimited. What if the entire Bitcoin system is moving towards promoting the number of users, in order to promote the re-testing of the Bitcoin halving effect hypothesis?
We may find some lessons from Moore's Law.
Moore's Law is so famous mainly because it is very historical and long, but it is so unreasonable and makes everyone feel incredible.
But we can deduce from Moore's Law why Moore's Law is so effective. Anti-Moore's Law was proposed by former Google CEO Eric Schmidt. He said: If an IT company sells the same amount of products today and 18 months ago, its sales will be halved.
Anti-Moore's law means, assuming that Moore's Law is right, if you don't keep up with Moore's Law, you will hang up. And Moore's Law is so famous, which forces all companies in the entire computer and Internet industry chain to advance around Moore's Law. All companies have to catch up with this Deadline in 18 months to improve their product performance, layout their user volume, and so on. When everyone did this, they spontaneously verified Moore's Law.
The only way we stopped was to run forward desperately. Painful realization.
The rise and fall of bitcoin mining companies in history has perfectly confirmed the "anti-Moore's law". As early as the end of 2012, the Avalon mining machine went into mass production, and Pumpkin Zhang directly possessed a 51% ability to attack the Bitcoin network. By 2013, 51% of Bitcoin's fear objects were replaced with Ghash.io, and the currency circle was still noisy about revising consensus. Next is the roast cat standing on the historical stage. In 2013 and early 2014, the roast cat became a myth in the Bitcoin circle. In 15 years, the myth changed to Bitmain. Bitmain has always dominated the mining industry's position and persisted until 2018. In 18 and 19, Bitmain encountered a crisis and began to give up its market share in the mining machine. In 2019, Avalon went public.
In the currency circle for ten years, no company has achieved the foundation Changchun. The exchange was also at this moment, and the earliest Mt.gox, which was like the sky, was already finished. Chinese exchange Sanxiong bitcoin China, ok, huobi, once occupied the head of the world. Binance was sealed after China's 94 policy. After the compliance of the US coinbase, all the currency circles were left behind. In 2019, matcha is the best?
Perhaps the hypothesis of Bitcoin halving effect will be verified from the law of supply and demand, and will be verified by the anti-Bitcoin halving effect.
Anti-bitcoin halving effect hypothesis: If a currency company maintains the same market size today as it did 4 years ago, its turnover will drop several times.
4 years is the Deadline of a currency company. You must catch up with the market growth rate stipulated by the halving effect hypothesis, or you will die.
In 4 years, all enterprises need to be fully prepared, mining machines need to be replaced, exchanges need to increase customer service, wallet vendors need to add servers … Everyone must increase resource allocation around this time, and in turn promote The halving effect was verified.
If you mix in the currency circle, your turnover and wealth for four years have not increased according to the bitcoin halving effect hypothesis, you are a Loser.
I am, 5 years ago, I was writing an article, no one read it, and could not make money; now I am still writing an article, no one reads, and I ca n’t make money, and the cost has increased a lot. This year I was anxious and didn't know what to do. So I stopped in May and thought about life. After thinking about it for half a year, I found that I didn't know what I could do. Can I only accept the fate of Loser?
Hey, verifying the hypothesis of Bitcoin's halving effect, it's up to you, colleagues.
Author: Huang Shiliang
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