How to reduce the suite affects bitcoin

by Shepherd Moises

The half reduction takes effect when the number of “bitcoins” assigned to minors after its successful creation of the new block is cut in half. Therefore, this phenomenon will cut “bitcoins” awarded 25 pieces to 12.5. This is not a new thing, however, it has a lasting effect and we do not know yet if it is good or bad for “bitcoin”.

People who do not know “Bitcoin”, usually ask why half occur if the effects can not be predicted. The answer is simple; It is pre-established. To counter the question of currency devaluation, “Bitcoin” Mining was designed so that 21 million coins would have ever been issued, which are obtained by cutting the reward given to minors from half every 4 years. Therefore, it is an essential element of the existence of “Bitcoin and not a decision.

Recognizing the occurrence of half of the half is one thing, but the evaluation of the “repercussion” is a totally different thing. People who know economic theory, will know that one of the “bitcoins” will reduce as minors close the operations or the restriction of the offer will move the price, which will make the continuous profitable operations. It is important to know which of the two phenomena will occur, or what will be the ratio if both occur at the same time.

There is no central recording system in ‘Bitcoin‘ because it is built on a distributed book system. This task is attributed to minors, so the system works as expected, there must be a diversification between them. Having some “minors” will give rise to centralization, which can lead to a number of risks, including the probability of 51% attack. Although it does not happen automatically if a “minor” gets a 51% control of the show, but that could happen if such a situation is present. This means that anyone checking 51% can exploit the archives or steal all the “bitcoin”. However, it should be understood that if half of half occurs without a respective price increase and we get nearly 51% of the situation, “Bitcoin” confidence would be affected.

This does not mean that the value of ‘Bitcoin‘, that is, its exchange rate against other currencies, must double within 24 hours when half occurred. At least one partial improvement of “BTC” / USD this year is buying in anticipation of the event. Thus, part of the price increase is already at the price. In addition, the effects should be extended. These include a small production loss and initial price improvement, the clear track for a sustainable price increase over a period of time.

That’s exactly what happened in 2012 after last reduction. However, the risk element persists here because “Bitcoin” was in a completely different place, then compared to where it is now. “Bitcoin” / USD was about $ 12.50 in 2012, just before half of the half, and it was easier to mining coins. The power of electricity and calculation required was relatively small, which means it was difficult to reach 51% control because there were little or no barriers at the entrance of minors and dropouts could be replaced instantly . On the contrary, with ‘Bitcoin’ / USD to more than $ 670 now and no possibility of extraction of the house, it could happen, but according to some calculations, it would always be a prohibitive attempt. Nevertheless, there could be a “bad actor” that introduce an attack from motivations other than monetary gain.

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