Mining Bitcoin Just Halved

Bitcoin just experienced a major milestone in its short little life-span. The reward for mining a block (a block = a ledger of transaction data) was just cut in half from 25 bitcoins to 12.5 bitcoins.

This means that assuming a price of $650 per coin, going forward miners will make ~$8,125 per block they mine, compared to $16,250 before the halving.

But, this is supposed to happen. 

When the code for Bitcoin was written, it was designed to be a currency with no more than 21 million bitcoins ever in circulation. And to encourage people to mine (which is what validates and supports the entire bitcoin network), Satoshi created a reward that went along with each block.

When Bitcoin was first created, the reward was set at 50 bitcoins per block mined. And, the code specified that every 210,000 blocks mined that reward would be cut in half, until it eventually is reduced to zero after 64 halving events.

This exponential halving means that even though the last halving won’t occur for over 100 years, 75% of all bitcoins have already been mined and distributed.

So, this effect was the second ever halving in the history of Bitcoin. The first halving (when the reward was cut from 50 to 25 bitcoins) was back in November of 2012, when the price was around $12 dollars.

You probably just want to know how this will affect the price of bitcoin.

In a perfect market the USD/BTC price would have simply doubled, to compensate for half as much bitcoin being rewarded. This logically would make sense, since the cost of mining isn’t changing at all, and without a doubling of price miners are instantly seeing their revenue cut in half.

But we all know markets aren’t perfect. So the best we can do it guess. And the most logical conclusion is that any pricing effect from the halving has most likely already happened due to the market anticipating it, and is probably one of the main reason for the huge price increase over the past 6 months.

Blockchain Revolution Review

Proposed in 2008 and launched the following year, bitcoin – a “peer-to-peer electronic cash system” – was initially viewed by many as the preserve of geeks and criminals. Yet it has subsequently taken giant strides towards the mainstream. There have been various high-profile attempts to unmask the “real” Satoshi Nakamoto, the pseudonym used by bitcoin’s inventor(s). And in the immediate aftermath of the Brexit vote, some hailed bitcoin, surging as the pound plummeted, as “digital gold”.

It is now recognised that the still-mysterious Nakamoto did more than invent a currency. He also solved a longstanding problem in computing, to do with date and networks. His solution was complex, but it involved the use of an infrastructure comprising “blocks” of confirmed transactions that form a chronologically linked “chain”. As other digital currencies, and other Blockchains, have emerged, banks and some governments have begun to pay attention, and investment is rocketing. The World Economic Forum predicts that, within a decade, 10% of global GDP could be stored on Blockchains.

To comprehend the scale of this innovation, it is necessary to understand the extent to which data has until now been held in silos, available to only one authority. The blockchain allows any individual to verify that a transaction existed in a particular form at a certain time.

Both the potential and the risk are only gradually becoming evident, as is illustrated by the recent case of the Decentralised Autonomous Organisation known simply as the DAO. The idea, in a nutshell, is a company in which funders initially invested in return for voting rights, but which would then operate simply through “smart contracts” running on a blockchain and implemented via software. 

The DAO was recently launched to considerable excitement, having raised more than $150m in a digital currency known as “ether”, but it was almost immediately hacked, with approximately a third of the ether taken. It is a cautionary tale. Yet in the scale of its ambition, it also helps to explain why some see blockchain technology as almost on the scale of the world wide web.

Don and Alex Tapscott got in early on this “revolution”. The father and son team are well positioned: Don Tapscott’s 15 books include The Digital Economy (1994) and Wikinomics (2006); Alex Tapscott is the CEO and founder of an advisory firm building blockchain companies. Their book features interviews with leading figures in tech, business and academia, presented in a highly accessible form.

The new book Blockchain Revolution aims to provide a broad overview of changes the technology could bring about. Since the Tapscotts have a penchant for numbered lists, I’ll give four of their examples. 

First, they suggest, blockchain technology could transform remittances, the largest flow of funds into the developing world; transfers could take place in an hour rather than a week, and with greatly reduced commission. 

Second, the technology could provide immutable land title registration for the estimated 5 billion people in the world who have only a tenuous right to their land.

Third, it could overhaul online identity, allowing us greater privacy but also the ability to gain value from those aspects of our data we are prepared to share. 

Finally, blockchain technology could help artists and musicians claim ownership of their work and receive a fair share of its value – no mean feat in the digital era.

Overall, the shift the Tapscotts envisage – from hierarchies to networks, and towards a new era of “distributed capitalism” – sounds appealing. But each of the four examples mentioned above, like the numerous others in the book, raises the same two questions. Is this blockchain revolution likely? And is it actually desirable? 

In answer to the first question, the Tapscotts acknowledge barriers to adoption, particularly in the chapter on “showstoppers”. As regards the second, they allude to the possibly dystopian consequences as well as the utopian: at one point they suggest that blockchain technology could, if we get it wrong, allow institutions to entrench their wealth, provide a platform for a new kind of surveillance society, and even, together with related technological advances, get out of control and turn against humans. 

There are other books on the subject but Blockchain Revolution is a highly readable introduction to a bamboozling but increasingly important field. Whether or not the revolution comes about, and if it does, whether or not the effects are entirely pretty, there is huge potential in the distributed ledger invented by Satoshi Nakamoto – whoever lies behind the name.

TechCrunch:         Guardian

« Major Privacy Win For Microsoft in 'free for all' Data
ISIS Warn That London 'next to be attacked' »

CyberSecurity Jobsite
Perimeter 81

Directory of Suppliers

The PC Support Group

The PC Support Group

A partnership with The PC Support Group delivers improved productivity, reduced costs and protects your business through exceptional IT, telecoms and cybersecurity services.

NordLayer

NordLayer

NordLayer is an adaptive network access security solution for modern businesses — from the world’s most trusted cybersecurity brand, Nord Security. 

Alvacomm

Alvacomm

Alvacomm offers holistic VIP cybersecurity services, providing comprehensive protection against cyber threats. Our solutions include risk assessment, threat detection, incident response.

ZenGRC

ZenGRC

ZenGRC - the first, easy-to-use, enterprise-grade information security solution for compliance and risk management - offers businesses efficient control tracking, testing, and enforcement.

XYPRO Technology

XYPRO Technology

XYPRO is the market leader in HPE Non-Stop Security, Risk Management and Compliance.

Council on Foreign Relations (CFR)

Council on Foreign Relations (CFR)

CFR is dedicated to better understanding the world and the foreign policy choices facing the USA and other countries. Cyber security is covered within the CFR topic areas.

Karlsruhe Institute of Technology (KIT)

Karlsruhe Institute of Technology (KIT)

KIT is a leading research and education institutions with strong capabilities in information systems and security.

GuardSquare

GuardSquare

GuardSquare is the global reference in mobile application protection. We develop premium software for the protection of mobile applications against reverse engineering and hacking.

Cybersprint

Cybersprint

Cybersprint's Digital Risk Protection platform continuously monitors your digital footprint so you can make informed decisions on exposure to online threats, identify vulnerabilities and take action.

Checksum Consultancy

Checksum Consultancy

Checksum Consultancy specializes in Information security, Risk management, and IT governance.

Hack The Box

Hack The Box

Hack The Box is an online platform allowing you to test your penetration testing skills and exchange ideas and methodologies with thousands of people in the security field.

IEEE Cyber Science and Technology Congress (CyberSciTech)

IEEE Cyber Science and Technology Congress (CyberSciTech)

CyberSciTech provides a platform for scientists, researchers, and engineers to share their latest ideas and advances in the broad scope of cyber-related science, technology, and application topics.

Upfort

Upfort

Upfort (formerly Paladin Cyber) unifies award-winning security and robust cyber insurance to deliver comprehensive cyber risk solutions.

JupiterOne

JupiterOne

JupiterOne is the security product that is changing how organizations manage and secure their software defined assets.

Technology Innovation & Startup Centre (TISC)

Technology Innovation & Startup Centre (TISC)

TISC is a startup incubator at the Indian Institute of Technology Jodhpur (IITJ) and we back deep-tech startups.

Secmation

Secmation

Secmation are an agile engineering services firm providing advanced DoD level security design and consultation services for both commercial and defense hardware and software applications.

Mission Critical Partners (MCP)

Mission Critical Partners (MCP)

Mission Critical Partners is committed to delivering innovative solutions that help our clients enhance and evolve their critical-communications systems and operations.

Salus Cyber

Salus Cyber

Salus is a provider of world-class cyber security services, enabling our clients to identify and manage their cyber risks proactively and effectively.

Silverse

Silverse

At Silverse, we specialize in building a comprehensive cybersecurity journey, anchored by our extensive experience, industry expertise, and an ecosystem of trusted partners.

RunReveal

RunReveal

RunReveal's mission is to make sure no breach goes undetected. That means having a product that is accessible and effective for companies of all sizes.

eGeneration

eGeneration

eGeneration is one of the leading technology solutions and system integration companies in Bangladesh.