[AUDIENCE] What is your personal view on the halving this year, and its impact on the difficulty?
[ANDREAS] Sorry, what was the question? [AUDIENCE] The Halvening. [ANDREAS] The Halvening.
Yes, the great Halvening of 2016. For those of you who are not quite familiar with this,
every four years, the amount of subsidy in each Bitcoin block decreases by 50%.
We started with 50 bitcoin per block; we are now in the era of 25 bitcoin per block.
We will enter the era of 12.5 bitcoin on approximately July 22nd 2016.
One of the interesting things about Bitcoin is, we know what the monetary policy will be in 2140.
With the Federal Reserve, we don't know what the monetary policy will be this Friday. [Laughter]
Or with any of the other central banks. Although, I have a premonition that it will probably involve...
more stimulus and printing money, because that hasn't worked yet, but it probably will on attempt #101.
What happens in the Halvening? As I said, miners pre-pay for electricity in many parts of the ecosystem.
It is not universal, but it is one of the [common choices] of miners which has some really serious implications...
for their decision-making process, as sunk capital.
Secondly we have now [gone through a series of changes] from CPU to GPU, FPGA to ASIC,
with performance increases of one hundred or thousand-fold,
until we accelerated straight into Moore's Wall.
[We have reached] 16 nanometers, done. Now where do we go? We will slow down...
to a [doubling] in performance every eighteen months.
Everyone can [access] the same chip; there is no advantage in pre-ordering.
You no longer need to [cycle through] new chips every three to six months.
Therefore, capital connections to silicon fabrication and centralization of purchasing matter [less].
This started at the beginning of this year. We will go into the Halvening with haves and have-nots:
those who have 16 nanometer chips and those who don't have them.
Those who do not have 16 nanometer chips will find themselves unprofitable very quickly.
The rest will not. We will see. I predict the price will go up... and down. [Laughter]
Then it will probably go up and down again. The primary driver of price is still sentiment.
"The Halvening is coming. I think that bitcoin's price will go up. Buy! Buy! Buy!"
"Everybody buy! This is great!" "Oh, no. I'm not too sure. I'm a bit worried."
"Sell. Sell. Sell! Sell! SELL!" Up and down we go. The bitcoin price will be a roller coaster.
Volatility will probably increase. We are in a period of pretty low volatility for at least a year now.
The volatility of 2011 and 2013 is in our past.
We have been relatively stable for a tiny, $6 billion global currency.
But we will see increased volatility [around the halving]. My suggestion is: take a deep breath and relax.
Don't try to play the casino unless you are an experienced gambler, in which case: good luck!
Sit back and relax, watch the fireworks. Read the news about how Bitcoin is dead or about to die (again),
because of the halving.
Then wait until right after the halving, when Bitcoin is not yet dead (again).