Subject: Re: [Bitcoin-development] death by halving

From: Alex Mizrahi <[email-masked]>
Date: Sat, 25 Oct 2014 22:53:57 +0300

> We had a halving, and it was a non-event.
> Is there some reason to believe next time will be different?
>

Yes.

When the market is rapidly growing, margins can be relatively high because
of limited amounts of capital being invested, or introduction of more
efficient technologies.

However, we should expect market to become more mature with time, and a
mature market will result in lower margins.
The halving can do much more damage when margins are relatively small.

Besides that, there is a difference in ecosystem maturity:

1. Back in 2012, miners weren't so focused on profits, as Bitcoin was
highly experimental: some were mining for the hell of it (it was a novelty
thing back then), others wanted to secure the network, others did it
because it was hard to obtain bitcoins by other means. But now miners are
mostly profit-motivated: they buy expensive dedicated mining equipment and
want to maximize profits. As you might know, at one point ghash.io reached
50% hashrate, and miners didn't care about it enough to switch to a
different pool.

2. Back in 2012, we didn't have multipools. Multipools automatically
switches between mining different alt-chains to maximize miners' profits.
Miners who use multipools do not care how their hashrate is used as long as
they profit off it.
Particularly, check https://nicehash.com/ -- you can easily buy hashrate to
attack a smaller alt-coin, for example.

If the halving will result in a significant hashrate drop (and we did
observe hashrate drop in 2012, although it wasn't that big), it might be
possible to buy enough hashpower to attack Bitcoin.