Bitcoin Halvenings and its Effects on Hashrate Security

The First Halvening

Bitcoin’s Price 2012
Bitcoin’s Hashrate 2012
Bitcoin’s Blocktime 2012
Bitcoin’s Mining Profitability 2012

The Second Halvening

Bitcoin’s Price (2017)
Bitcoin’s Hashrate 2017
Bitcoin’s Mining Profitability 2017
Bitcoin’s Hashrate 2018
Bitcoin Profitability 2018
Bitcoin’s Blocktime 2018


  1. Bitcoin’s price is not immediately affected.
  2. Mining profitability is reduced significantly.
  3. Miner drop out is to be expected in light of this.
  4. Blocktime fluctuation is minimal as difficulty readjusts.
  5. An immediate drop of 35% in hashrate did not result in a mining death spiral.
  6. A 50% drop over a month period did not result in a mining death spiral.
  7. Hashrate can be sustained and even grow through the introduction of new mining hardware, reinvestment of funds earned during times of high profitability, and a willingness to mine at a loss in the hopes that the price will grow in the future.

Looking Forward

  • In a post-block reward era, Bitcoin will rely on fees to pay miners for its network security.
  • As block rewards get smaller, the halvening schedule of approximately every 4 years will allow time for the fee market to develop and hashrate to stabilize around fee discovery.
  • Reduced block rewards will also make the financial impact of the halvenings insignificant to miners. For example, a drop of block rewards from 596 satoshis to 298 satoshis won’t be that large even if a single Bitcoin is worth $1 MM.
  • There is historical precedence of transaction fees becoming comparable to block rewards. From 12/21/17–12/24/17, Bitcoin consistently had 8–11 BTC in fees or $128,000–$176,000 per block. There was even one block that had more in transaction fees than block rewards.
  • Moores law has been slowing down significantly. Barring new methods to offset chip development, new efficient mining hardware will not help mitigate against times of low profitability. Therefore the stability and growth of the hashrate and blocktimes will be subject to the money management of miners. This includes the pursuit and development of cheaper sources of energy.




Call me "E" for short. I write to learn. Follow me on Twitter: @ecurrencyhodler

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Call me "E" for short. I write to learn. Follow me on Twitter: @ecurrencyhodler

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