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Hellooooooo out there in the world of Ethereum and Crypto!
My name is Trevor and today I talk about...
The Ethereum Triple-Halving Event!
Halvenings or Halvings, or however you want to pronounce it, are one of crypto's most significant events.
Normally when experienced crypto investors hear the word "Halving" they think of Bitcoin.
So before I attempt to explain something as crazy as a TRIPLE-Halvening for Ethereum.
First I will explain a regular halving event that takes place for Bitcoin!
This is just a refresher for those that may already know about Halvings.
Traditionally, when a halving event occurs with Bitcoin.
It directly affects how much Miners are rewarded for completing a block on Bitcoin's network.
The reward that Miners' receive for mining Bitcoin gets automatically cut in half after every 210,000 blocks!
This turns out to be roughly 4-years and will continue to occur until the year 2140.
When things first started back in 2009, Miners were rewarded with 50 Bitcoins for solving a block on the blockchain.
After the first halving occurred, Miners' rewards were cut in half to only 25 Bitcoins for mining successfully.
After that, it was cut down to 12.5 and as of May 11th, 2020 which was the last halving.
Mining blocks cut the current reward down to just 6.25 BTC!
Since the reward is cut in half, that means the supply is also cut in half.
When the supply is cut in half that means demand also goes up!
Naturally, this makes the price of Bitcoin sustainably more valuable over a long period of time.
After each halving for Bitcoin, the price climbs and eventually falls back down.
However!
When the price falls back down it is significantly much higher in price than what it was before the halving occurred.
These halvings could easily be considered inflation killers since Bitcoin continuously and consistently produces remarkable year-over-year returns.
So if a single halving event has this much of an impact on Bitcoin's long-term price.
What would something like a Triple-Halving do to Ethereum?
One might be able to argue that Bitcoin goes through its own Triple-Halving event.
For Bitcoin, they argue this usually occurs around the same time a regular halving occurs.
While that may be true, we are nowhere near close to another Bitcoin Halving event to better dive into the subject.
On top of that, we are here to tackle the recent rumors and memes surrounding Ethereum's Triple Halving!
To be fully transparent here, however, it is important to keep in mind that when compared to Bitcoin.
Ethereum doesn't have a fixed supply!
There is technically an infinite supply of Ethereum so long as people are mining for it.
So on the skeptical side of the fence here with Ethereum, a halving can't apply to something that never runs out.
Right?
Not quite!
The traditional use of the word Halving when it comes to Bitcoin only applies to the rate at which miners are rewarded.
It does not apply to the overall fixed supply of Bitcoin in Circulation and only applies to how many get spit out into circulation over time.
Ethereum is no different!
There are also a lot of different factors that come into play here rather than a Mining reward just being cut in half.
The biggest factor of them all would be time.
When a halving occurs, the price does not automatically double instantly.
The halving is more like a signal that over time the price will easily double!
As you have probably noticed though, the price of Bitcoin after halvings doesn't just double.
It goes insane and jumps 5 to 10 times greater than it was during the time of its halving.
Why is that and why does that matter for Ethereum?
Well, let's look at the factors!
To start with, we all know Bitcoin moves the entire cryptocurrency market with it when it changes price.
So technically, when Bitcoin reacts to its own halving, Ethereum must follow!
Under those principles, Ethereum doesn't really need to have a fixed supply because things like Bitcoin already do it for them.
We could count Bitcoin's halving as a halving event for Ethereum too if you wanted!
What about Ethereum itself without Bitcoin?
Just like Bitcoin, people who mine Ethereum also get rewarded with more Ethereum.
The current rate for successfully mining Ethereum is a little bit different than Bitcoin.
Ethereum Miners currently get rewarded 2 ETH plus the number of transaction fees collected from the block that was solved.
That means the supply of Ethereum gets recycled and always differs depending on things like Gas Fees or Difficulty.
One block could reward a total of 32.642... Ethereum whereas with another block later it could only reward 23.781...
Thanks to Ethereum's unlimited overall supply, the amount of Ethereum in Circulation would be the overall supply.
You are still supplied Ethereum the same type of way Bitcoin is supplied.
Halving events for Ethereum are never guaranteed to occur like they are with Bitcoin.
If a halving were to ever occur with Ethereum it would cut the reward to 1 ETH plus the transaction fees collected.
These don't occur often with Ethereum and more recently, the reward was actually adjusted to 3 ETH instead of 2 ETH.
"What the heck, Trevor! Isn't that the opposite of halving?"
Yes, that would be the opposite of halving actually!
So now we have to look at another important factor to Ethereum that Is different than Bitcoin.
Decay!
When Ethereum miners vote together to govern the network behind Ethereum.
They vote on changes such as the rewards that get supplied for Ethereum.
Ethereum, unlike Bitcoin, has more flexibility due to its built-in ability to validate Smart Contracts.
What a lot of people don't realize is that when the Reward for Ethereum is increased.
It is increased because over time the maximum reward starts to decay.
The amount at which you are awarded slowly decreases over time!
So like with a Bitcoin halving where it occurs and then over time the price of Bitcoin increases.
With Ethereum, the halving occurs proactively and before the price starts to increase (or decrease).
Are you confused yet and do you want more confusing info?
Don't worry, I gotchu!
There is yet another event taking place that will completely change the way Ethereum use to function.
Since 2015, the Ethereum network has used Bitcoin's same Proof-of-Work protocol to work.
Since then, tech gurus have conjured up a better protocol called Proof-of-Stake!
It resolves a lot of the problems Proof-of-Work systems run into while also being more efficient.
The move from Proof of Work to Proof of Stake is infamously called Ethereum 2.0 and already underway.
As it continues to roll out, more and more Ethereum owners and miners will switch to Validating rather than Mining!
Validating is exactly like mining except that Bandwidth is more important than your Hashrate.
Since it runs more so on bandwidth to mine for solving blocks.
It makes the speed significantly faster at which Ethereum's entire network runs!
Faster speeds across the board effects every single factor of Ethereum's characteristics.
Over time it drastically lowers the cost of transaction fees while also speeding up the payment process.
In other words, the fees will be lower when working with Ethereum and the number of transactions people make will rise!
On a Proof-of-Stake system, you are no longer rewarded a flat fee of say 2 or 3 Ethereum that decays over time.
Instead, it focuses on rewarding Miners (or Validators) the number of transaction fees collected in a block.
This means that rewards will no longer be as predictable and with fees much lower.
Solving a block would eventually reward people with much less Ethereum than people currently get now.
Ethereum 2.0 is basically just one big giant halving being rolled out over the stretch of a few years.
Wait!
Yes, there is one more factor I wanted to mention before we end this here today.
Part of the Proof of Stake mechanism for validating blocks requires that Validators "lock up" Ethereum they already own.
Locking up your funds is considered Staking on the network as Proof for validation on the entire network.
Locking up the ability to interact with your Ethereum adds an important factor that a lot of people might overlook.
The more Ethereum gets locked up or staked, the less Ethereum there is circulating in the supply chain.
Staking or Locked Up Ethereum no longer circulates in the supply chain and becomes inaccessible until an owner unlocks their funds.
The more Ethereum gest locked up for validating, the less Ethereum there will be for people to transact with.
This factor alone would cause a halving of its own eventually driving the price up for Ethereum as demand goes up and supply decays away.
While it is easy to say "halving" we are really working with a lot of different factors that cause this effect.
There are other factors I didn't discuss here too!
Things such as mining difficulty, electricity costs, inflation, SA, Technicals, and the fact that something like Ethereum is connected to a whole catalog of side products that also strengthen (or weaken) these things.
If we were to break it down to just a few main things though.
I believe all of these things discussed today could be considered events that can be considered halvings.
If you added up all of these things it would actually be a quadruple halving but for the sake of the rumors going around.
We can be humble and chalk these events up to being a tall-tale sign that shows Ethereum actually is going through a Triple Halving of some kind.
Even more exciting, it is a Triple Halving that will have such a long-term effect on Ethereum's price.
People buying this rumor are estimating Ethereum's price could reach past $100,000 by January 2023.
One thing is for certain here whether we believe halvings occur for Ethereum or not.
Regardless of these factors, we know for certain the price will be much higher by 2023.
On top of that, Ethereum continues to roll out its upgrades and proves how useful it can be for real-world applications.
The number of people using Ethereum will easily triple and that right there is a Triple-Halving of its own.
What do you think about Crypto Community?
I would love to hear everyone's thoughts on the subject!
So be sure to Comment down in the Comments section below.
Thank you tons for reading, watching, and subscribing today!
Hopefully, this video helped, and hopefully, all of YOU have another BEAUTIFUL day in Crypto!
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