Perpetual Innovation

Category: Bitcoin

  • The World is Halving!

     The world is halving,
    the World is HALVING.
    …
    Q: Bitcoin is due to “half”. Explain what half means and how that might impact the price of bitcoin before and after? and … Q: Which bitcoin miners will be most impacted by the halving event this week? (See Answer below.) 

    ChatGPT or MS Copilot or Gemini …. nice answers… (See below)

    Summary of answer: Since inception in 2009, bitcoin has been designed to pay-out half the number of coins per block awarded to “miners”. It started at 50 coins per block. About every 4 years (210,000 blocks) the number of coins payout has halved. It is now down to 6.25 coins per block. Some time over the next day or so, the amount payout will halve again to 3.125.

    Miners use massive computing power to mine bitcoin, and gigantic amounts of power. Much of the power used is for cooling in order for the server farm to stay cool within operating ranges.
    If the price of bitcoin, up to $70,000 last week, doubles, then a miner can still make money… if not, marginal miners will drop off.
    Since the computing power might be used for multiple purposes, say gaming or AI, some miners might be diversified.

     Copilot (2024, April 18)

    Certainly! Let’s delve into the concept of Bitcoin halving and its potential impact on the price of Bitcoin:

    1. What Is Bitcoin Halving?

      • Bitcoin halving, also known as the halvening, is a programmed event that occurs approximately every four years within the Bitcoin network.
      • It is a built-in feature of Bitcoin’s code.
      • During halving, the block reward for miners is reduced by half.
      • In other words, the number of new Bitcoins created with each mined block decreases.

    2. Why Does Halving Happen?

      • The primary goal of halving is to control the rate of Bitcoin issuance.
      • Bitcoin’s total supply is capped at 21 million coins.
      • By reducing the reward for miners, halving slows down the creation of new Bitcoins.
      • This scarcity mechanism is crucial for maintaining Bitcoin’s value proposition.

    3. Impact on Bitcoin Price:

      • Historically, Bitcoin halving events have had a significant impact on the price:
        • Scarcity Effect: Halving reduces the rate at which new Bitcoins enter the market. As supply decreases, scarcity increases.
        • Increased Demand: If demand remains steady or rises, the reduced supply can lead to higher prices.
        • Anticipation: Traders and investors anticipate halving events, which can drive up demand and price before the actual halving occurs.

    4. Previous Halvings:

      • 2012: The first halving reduced the block reward from 50 BTC to 25 BTC.
        • Result: Bitcoin’s price surged from around $12 to over $1,000 within a year.
      • 2016: The second halving reduced the reward to 12.5 BTC per block.
        • Result: Bitcoin’s price increased significantly, reaching an all-time high.

    5. 2020 and 2024 Halvings:

      • The most recent halving occurred in 2020, reducing the reward to 6.25 BTC per block.
      • The upcoming halving is expected in 2024.
      • Different Context: Unlike previous cycles, Bitcoin has already hit new record highs before the 2024 halving.
        • Factors include institutional interest, regulatory developments, and broader adoption.

    6. Market Sentiment:

      • Opinions vary:
        • Some experts predict a bullish trend due to scarcity and increased institutional participation.
        • Others believe that the halving effect is already priced in, and external factors play a more significant role.

    In summary, Bitcoin halving reduces supply, increases scarcity, and historically correlates with price surges. However, the current market context and external factors may influence the outcome. 🌟🪙📈

    You:

    Which bitcoin miners will be most impacted by the halving event this week?

    1. Miners’ Revenue Decrease:

      • The halving will reduce the block subsidy for miners from 6.25 BTC to 3.125 BTC.
      • Miners’ immediate impact will be a considerable decrease in revenue due to the reduced reward.

    2. Hashrate and Miner Viability:

      • Less efficient miners may become unprofitable and exit the network.
      • The hashrate, a critical security measure for Bitcoin, might adjust along with difficulty levels to align with new economic realities.

    3. ASIC Pricing and Breakeven Points:

      • Post-halving, the profitability of different ASIC models will be crucial.
      • Only the most efficient machines will operate profitably if Bitcoin’s price does not see a significant increase.
      • Next-generation ASICs like the S19 XP and M30S++ might have breakeven power costs ranging from $0.07/kWh to $0.15/kWh.

    4. Custom ASIC Firmware:

      • Miners are turning to custom ASIC firmware (e.g., LuxOS, BraiinsOS) to improve hardware efficiency.
      • Custom firmware optimizes power usage and hashrate output, lowering the breakeven point for electricity costs.

    5. Miners at Risk:

    In summary, miners’ profitability and viability will depend on their efficiency, ASIC models, and adaptation to the new economic landscape after the halving. 🌟🪙⛏️

     

    Q: How does bitcoin and bitcoin mining fit into the world of blockchain?
    Sent by you: How does bitcoin and bitcoin mining fit into the world of blockchain?

    Gemini (2024, April 18) 

    Bitcoin and Bitcoin mining are foundational pieces of the blockchain world. Here’s how they connect:

    Blockchain: The Public Ledger

    Imagine a giant, public record of transactions. That’s essentially what a blockchain is. It uses cryptography to securely store information in a way that’s transparent and resistant to tampering. Transactions are grouped into blocks, chained together chronologically, creating a tamper-proof record.

    Bitcoin: The First Cryptocurrency

    Bitcoin was the first widely adopted cryptocurrency, and it runs on a specific blockchain. Each Bitcoin transaction is recorded on the Bitcoin blockchain. This blockchain relies on miners to validate and secure the network.

    Bitcoin Mining: Securing the Network

    Bitcoin mining is the process of verifying and adding transactions to the Bitcoin blockchain. Miners compete to solve complex math problems. The first miner to solve the problem gets to add the next block of transactions to the chain and receives a reward in Bitcoin.

    Here’s how they work together:

    • Security: Mining creates a secure and decentralized network. Miners constantly verify transactions, making it nearly impossible to tamper with the blockchain.
    • Decentralization: There’s no central authority controlling Bitcoin. Anyone can participate in mining, which distributes the power across the network.
    • Scarcity: Mining also controls the creation of new Bitcoins. The halving event, where the mining reward gets cut in half, creates a limited supply of Bitcoins, similar to precious metals.

    Impact on Blockchain Technology

    Bitcoin’s success has popularized blockchain technology. The core principles of blockchain security and decentralization are now being applied in various fields beyond cryptocurrency, such as supply chain management, voting systems, and secure document sharing.

    In essence:

    • Blockchain provides the secure and transparent infrastructure.
    • Bitcoin, secured by mining, is the first application running on this infrastructure.
    • The success of Bitcoin has driven innovation and exploration of blockchain technology across various industries.

  • PetroCoins, Oil Sands Extraction and Blockchain.

    Oil sands are seriously back in play with patented technology. Combine that with blockchain tech, and you have an investment that you simply gotta get into, or not!…
    Petrotech Energy Inc. is touting both patents and blockchain in a penny, over-the-counter, stock (PQEFF).
    Well, maybe not investing, but here is a hyped-up “sponsored” Ad that looks slightly like an article over at OilPrice.com: https://oilprice.com/Energy/Energy-General/This-New-Technology-Could-Transform-The-Oil-Industry1.html
    Two things that are interesting in the penny stock that’s now up to $1.50 level. It has patented tech on oil sands extraction that is a closed loop system that sounds interesting. With the dry sands of Utah it apparently has the ability to extract 99% of the heavy oil and leaves only sand as the byproduct. That is pretty cool because oil sand extraction has historically been a very, very dirty and expansive business. They want to expand their patents to the countries where lots of (dry) oil sands deposits live and make a fortune. Unfortunately, two of the biggest candidates are Kazakhstan, Venezuela, Russia and China — not exactly the worlds heaven of intellectual property (IP) protection countries.
    In fact, the bitcoin IP (ICO) backed by oil reserves by Venezuela in an interesting ploy. We thought the initial coil offering should more aptly be called an IKO, for Initial Kleptocurrency Offering.
    A cybercurrency like bitcoin is, however, an interesting way to do business in any world, especially a kleptocratic country. And blockchain is the underlying transaction technology. So the marriage of blockchain to this company has real merit (they call their technology PetroBLOQ). However, bitcoin and blockchain technology are publicly available — open source — technologies.
    Petrotech says that they can produce oil at $22 per barrel. Maybe even as low as $18. That’s impressive for oil sands. Transportation and the extra costs of processing heavy (“dirty” vs “sweet” West Texas type crude) change that dynamic some; but still impressive.
    What’s somewhat funny is this statement: “It extracts over 99 percent of all hydrocarbons in the sand, generates zero greenhouse gases and doesn’t require high temperatures or pressures.”
    Generates “zero greenhouse gases”? It has to be transported, refined, transported to the pump and then burned in a vehicle where it produces between 19 and 20 pounds of carbon dioxide per gallon, depending on the type of gas/diesel.
    Yes, more green than the tar sands of Alberta, but certainly not as green as wind or solar. 
    Look, as well, at the trillions of barrels of oil in sands around the world. Even if we could extract it all and burn it, does not mean we should burn it.
    Check out a sister blog on the scenarios associated with the demise of oil (excluding any discussion about greenhouse gas issues).


  • Venezuela's 'Petro' Token Launches in Pre-Sale – CoinDesk

    Venezuela’s ‘Petro’ Token Launches in Pre-Sale – CoinDesk:

    Is it an ICO or an IKO. There has been a new trend that is catching fire, to do an initial public offering (IPO) in cyber/cryptocurrency coins, or ICO. Venezuela, with a failed currency in a failed state, is doing a very novel approach their new ICO offering is to be backed by a small portion of their vast oil reserves. And the coin will be called a Petro, which is equivalent to a barrel of Venezuelan (sour) crude in the ground. It is generally better that the collateralization of the Petro is oil in the ground because kleptocracy government can’t steal it, privatize it or transfer it to friends and family. (See Wikipedia’s article on the Petro, great because it is dynamically updated.)

    Given the kleptomania of the country, it probably should be called a IKO, for klepto currency. There is some genius involved here. Government employees have not been paid for months. And there is only government employees, since the private sector has been taxed, squeezed, arrested and otherwise squeezed out. No one wants to lend money or invest in capital investments because the government has a way of lying, stealing, cheating and privatizing.

    The Bolivar currency is a klepto nightmare. The preferred exchange rate is about 10 to the US$ so friends and family get a spectacular subsidy. But hyper inflation has about 25,000 Bolivar to the US$. Of course, it is hard to get US dollars, and bolivars are useless.

    When it was announced that Russia was going to “help” Venezuela with this Petro IKO, it was an obvious in for Russia to meddle in Latin America. The Petro, will obviously supersede all other (worthless) Venezuela Debt and liabilities. It is very clever. Venezuela can move to a new currency for some things, and leave the worthless currency for other things (like paying off debt).

    Other countries and other dictators will be watching this closely.

    On the other hand, a collateralize ICO has lots of potential. Troubled, or failed states can offer an ICO to keep mining their diamonds, oil, gold and lithium. Hmmm…???

    While you are thinking about Oil-collateralized-ICOs, check out our scenario discussion on the death of big oil at our sister site here at ScenarioPlans.com: http://delphiplan.com/2018/02/20/scenarios-of-stranded-oil-assets/ 

    Notes. The Petro “white paper” discusses opaquely the intermix of the Vz Goverment, the oil-collateralize instrument, and more. (Check bitcoin news on Petro.) Here’s a summary and link to the white paper at Medium. There are soooo many issues with this ICO. The gov makes out here, there and everywhere: about 17% of the allocation, a discount to entice usage, a ICO price of $60 per barrel. Venezuela has  (dirty) heavy crude, so it should be discounted something like $7 per barrel… Oh, and the oil is still in the ground!

    ‘via Blog this’