In just a couple days, the Bitcoin community will celebrate its next block halving. Every four years, as coded by its pseudonymous creator Satoshi Nakamoto, the Bitcoin network is scheduled to reduce coin supply by 50%. In 2012, it went down from 50 bitcoins per block to 25 bitcoins per block, and in a few days, it will become just 12.5 coins per block.
Given the coded eventual limit on all bitcoin (the max is 21 million), and this reduction in supply approximately every four years (more precisely, every 210,000 blocks), you might think this means Bitcoin is now even more rare... after all, miners who solve a block will only be awarded 12.5 coins, not 25 as they are today.
Yet just days away from this momentous hurdle for the world's largest cryptocurrency, the price is not skyrocketing. On popular US-regulated exchange Coinbase, Bitcoin is down US $30 over the last 24 hours.
Why isn't it skyrocketing in anticipation of permanently lower new coin supply?
I don't know for certain, but some in the community are taking a contrarian view of the block halving - they don't like it at all from a technical viewpoint. As Coindesk reported recently:
"One miner ... has expressed serious concern that, when the drop in the block subsidy occurs, it could trigger a chain of events that could lead to an inevitable hard fork.
Chandler Guo is the founder of Bitbank, a China-based digital currency company that runs one of the largest mining operations in the world, BW. On average, BW.com accounts for approximately 10% of the total hashrate, an impressive feat considering it launched only two years ago.
Guo said he fears that if the price of bitcoin does not appreciate significantly before or immediately after halving, too much hashrate will drop off the network due to unprofitable mining, making transaction verification virtually impossible.
As you can probably deduce, Guo is an influential miner due to the sheer amount of hashrate he commands, so his view on this should not be casually dismissed without reflection.
Even if this nightmare scenario miner drop-off doesn't occur after the halving, sending the price of a non-functional Bitcoin network to $0, there are problems in the community worth thinking about.
It's become a toxic place, for one. Posts are routinely censored or deleted from the leading reddit community dedicated to Bitcoin discussion, causing less censored alternates to spring up.
A string of passionate Bitcoin advocates and technical engineers have been replaced by a largely anonymous chorus of troll accounts on reddit and Twitter, where everything from blocksize proposals, to Bitcoin accepting businesses, to media types like little old me get pounded over the rocks relentlessly.
Even the community-driven podcasts and shows have taken on a darker turn, leading to interviews where the guest is often mocked or grilled over their technical knowledge of the blockchain.
Some in the community have even quietly speculated as to whether Bitcoin has been a sustained victim of some kind of bizarre astroturfing campaign to make cryptocurrency seem illegitimate. I don't know why any governments or banks would want to make a technology where people mine money in their basement or dorm room seem goofy... I have no idea at all why they would want to discredit such an idea! Hm.
All of this matters only because currency is, in part, a social network and an acceptance network... and a community.
And more recently, I find myself getting drinks with the Ethereum guys, not the Bitcoin worriers. They tell better jokes. Well, okay, they tell jokes. They explain things when you have a technical question, rather than shooing you away or questioning your loyalty to the project. They aren't yet obsessed with the price of their currency, ether.
They aren't snobs. This makes them better at proselytizing their product and their vision of where this industry might venture.
A broad overview in today's Guardian, entitled "Blockchain: the answer to life, the universe and everything?", did a phenomenal job of exploring how Ethereum's blockchain - yes, a blockchain completely outside of bitter libertarian Bitcoin loyalist land - might just be able to solve many of society's and many of the business community's lingering problems in the years ahead.
Bitcoiners made it about a movement and a lifestyle and a set of values outside the traditional financial system, but I remain resolute in my belief that one day soon the major coin markets will be driven mostly by utility buys, not by ideological buys or speculative buys.
You'll buy a cryptocurrency because you need to insert it somewhere to get a machine to do something for you or to go somewhere, which is more or less the reason you work for fiat coins and bills today, isn't it?
I do still own some bitcoins, and I don't actually expect the price to drop to $0 after the halving. I also own some ethers.
But the future of Bitcoin is far from certain, their technology is far from the crowned winner - so a little humility in the face of the unknown would be charming. And if they can't say anything nice about the Ethereum community, maybe they can take the high road and choose to say nothing at all. That'd be my preference.