Compounded Effects of the Halving and Life

The Bitcoin halving occurred roughly two months ago on April 19th, 2024. When this happened, the amount of new Bitcoin added to the circulating supply when a new block was mined every ten minutes was cut in half.

The only thing that changed was the rate of issuance for new Bitcoin entering the market that comes from this predetermined cap of 21 million.

Before the halving, the mining reward was 6.25 Bitcoin for every new block (roughly every ten minutes). Now, it is 3.125 new Bitcoin being added to the circulating supply of Bitcoin for every new block that is mined.

Over the course of 24 hours, this means that what was once 900 new Bitcoin per day being added to the market is now 450 Bitcoin per day.

Over the course of 7 days, this means there is a difference of 6,300 new Bitcoin per week pre-halving compared to 3,150 per week post-halving.

Over 30 days (a typical month), this means it is a difference of 27,000 new Bitcoin per month pre-halving compared to 13,500 per month post-halving.

To simplify this idea further, this is as if someone is coming in and buying 13,500 Bitcoin every month that will never be sold on the market. This “buy” is happening daily, weekly, monthly, without stopping and will continue to compound how much Bitcoin this imaginary buyer holds. The entity behind this “buy” will continue buying this “supply” without fail. Every block they are taking “half” of the Bitcoin that prior to the halving, was there for the taking by the open market. I have put “buy” in quotes because this is merely an analogy for how you can picture the effect of what the halving does behind the scenes for Bitcoin on the market. In reality, there is no extra Bitcoin that is being bought because this extra Bitcoin I speak about doesn’t exist.

The halving has compounding effects that continue to grow behind the scenes with every block that is mined.

At a certain point, this compounded nature of Bitcoin’s perfect habitual action will reach a turning point where the loss of new supply every block can no longer be restrained by the demand of Bitcoin on the open market. The laws of supply and demand dictate that when there is more demand than supply, the price increases. With every block, every day, every week, and every month post-halving, the potential for this to occur increases as demand remains the same or increases while the Bitcoin supply on the open market continues to decline. When this happens, Bitcoin’s perfect habit will once again reach an outcome driven by its compounded effort.

I have already given the math behind the difference of what a month of pre and post-halving happens with Bitcoin. I want you to think about all of the changes in your life that you can make in one month of compounded focus and determination.

One month can change your life if that one month becomes an avenue for continued focus and effort.

You can form a new habit in a month of focused effort.

In one month, you can run 30 minutes a day and become a runner. The growth you will see in practicing this habit every day will be astronomical.

In one month, you can become a reader, a writer, someone practicing their faith, or someone who is learning a new language.

In one month, you can shed the habit of downing sodas all day, of eating fast food multiple times a week, and of ignoring your sleep quality.

The little actions you individually take over the hours, days, and weeks lead to the finished result of a block of a month. They all add up.

Bitcoin is the same way. Every ten minutes a new block is mined and these minutes lead to hours, days, and weeks, culminating in the result of the full month where one-half of the amount of Bitcoin pre-halving, was actually mined post-halving.

Now let’s do two months.

The life changes you made in month one start to become part of who you identify yourself as.

You aren’t someone who runs, you are a runner.

You aren’t someone who reads, you are a reader.

You aren’t someone who writes, you are a writer.

You aren’t someone who prays, you are someone who walks with faith.

You aren’t someone who overconsumes, you eat consciously and nutritiously.

You are a result of your habits and actions. Two months of practice help instill these habits into your life.

Bitcoin over two months has never wavered from its new habit of adding one-half of the mining reward every block. Roughly every ten minutes Bitcoin has never slipped up. It has continued to be perfect in this new habit.

Now let’s fast forward to six months.

You are a runner. You have signed up for a race and are actively training.

You are a reader. You have goals for how many books you want to read and talk about the books with those around you, thoughts of forming a book club fill your mind.

You are a writer. You have visions of a book and have started a newsletter you are passionate about.

You walk with faith. You find joys in life before your eyes you never saw before, you want to help people see the world the way you do.

You eat consciously and nutritiously. You have more vigor and energy than ever before and cannot understand how you consumed any other way.

Your life has changed as a result of your commitment to new habits and the focused effort it takes to build these habits.

Six months post-halving Bitcoin will have produced one-half the amount of new Bitcoin than if the halving had never occurred. The math for this is instead of roughly 162,000 new Bitcoin, there will only be 81,000 new Bitcoin. Bitcoin will have maintained this habit with perfect consistency.

Never changing.

Never slipping up.

Only continuing to perfectly act the way the code intends it to act.

Since the Bitcoin halving occurred on April 19th, it will take 210,000 blocks until Bitcoin has another halving event. The math equates to roughly four years of time. This means for four entire years, Bitcoin will never make a mistake where it suddenly reverts to the now-old habit of producing 6.25 Bitcoin. It will produce 3.125 new Bitcoin per mined block until the next halving occurs where that 3.125 Bitcoin is cut in half once again.

Imagine where you were four years ago.

Now imagine where you could be in four years from now if you adopted life changes that persist.

Bitcoin has already adopted its life changes for this next four-year cycle of time.

Now imagine where Bitcoin could go as it continues compounding its habits perfectly.

Stacks SATs.

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