Why the Bitcoin Halvening May Be a Big Deal

tl;dr: the 3rd Bitcoin Halvening is slated to take place on Monday, May 11th. Some thoughts on why it matters…and it’s not about price.

In the midst of the tsunami of disruption that the coronavirus is bringing upon the world, the pre-programmed, scheduled reduction in the Bitcoin block reward might not seem like such a big deal.

The so-called “halving” or “halvening,” (because of the 50% drop in the amount of Bitcoin awarded to miners following the successful validation of a block), is a core feature of the Bitcoin protocol (here’s the code).

In some respects, it’s about as eventful as a Swiss train arriving on time in Zurich Hauptbahnhof. We all know it’s going to happen.

Yes, there are all types of analyses and speculations about what the reduction of new supply will mean for the price of Bitcoin, but it’s anyone’s guess.

This time around, however, the “quantitative hardening” of Bitcoin, the leading crypto asset, stands in stark contrast to the unlimited quantitative easing of central banks.

That’s definitely noteworthy. But I think think there may be a bigger story here, for a few reasons.

Once, You’re Lucky. Twice, You’re Good….

Though it may feel like Bitcoin has been around for a long time, we’re talking about an innovation that is 11 years old.

Bitcoin hasn’t even had its Bar Mitzvah yet.

I wasn’t around for Halvening #1. I was introduced to Bitcoin a little bit after that. But I do remember Halvening #2, four years ago.

At that point, Bitcoin was still very fringe (though not as fringe as before, of course).

It was a relatively unknown asset. I was involved in conversations about crypto industry PR initiatives to “raise the awareness of Bitcoin globally.”

Well, the escape velocity that I chronicled at Consensus in May 2017 and which carried through the end of that year took care of that problem.

Bitcoin went from “never heard of it” to “of course I’ve heard of it.”

But, as any marketer will tell you, there’s a big difference between “awareness” and “perception.”

2017 solved the “awareness” challenge for Bitcoin, but not the perception challenge.

Perception gets changed more slowly, over time, as a product or brand delivers consistently against its value proposition.

With no circuit breakers, no downtime, no hacks, and no violation of the core promise (including the 21 million coin hard cap), the Bitcoin blockchain has delivered the equivalent of a financial pulse every 10 minutes (roughly) for the last 11+ years.

That’s remarkable in and of itself.

Now, after having proven itself through a crazy period of turbulence, Bitcoin will demonstrate that it is servant to no government and no banker.

It will deliver, for the third time, on another key element of its value proposition…the halvening.

From a brand building perspective, this is as good as it gets.

Deliver on your future promises and keep delivering.

Once, you’re lucky. Twice, you’re good. But, third time? Well, that’s the charm.

Global Coordination in an era of Global Disharmony

All of that is great, but I think there’s another really stark contrast that Bitcoin’s halvening might offer to the world in the midst of coronavirus.

Within a ridiculously short timeframe, the nodes in the Bitcoin network will all arrive at consensus about the new monetary policy of 6.25 coins per block post halvening.

Think about that for a moment.

Across every single country, time zone, and language, there will be agreement.

There won’t be policy discussions or votes. No Twitter blowback or efforts at regulatory capture by lobbyists trying to carve out special protections.

Everyone will just accept it and move on because that is the deal.

In an era where getting along between countries-even European ones that are supposed to be buddy buddy with each other- is becoming increasingly fraught with tension, the process through which Bitcoin evolves will be incredibly smooth.

It is THAT fact that I think, deep in the subsconscious, will help push more people towards the Bitcoin Enlightenment or Reformation, as Tuur Demeester has called it.

Our new report “The Bitcoin Reformation“ is out. Read here: https://t.co/LA3ccXGsRL pic.twitter.com/yPIwAXydSK— Tuur Demeester (@TuurDemeester) November 7, 2019

Just like people have begun to realize that working from home can be better than sitting in traffic for 2 hours each day, they will start to ask themselves, in so many words,

“hey, how come Bitcoin can coordinate globally so quickly, but the ‘regular’ world cannot?”

It probably will not happen immediately on May 12th, but when paradigms shift as rapidly as they are doing right now, people are more open to new ideas.

Bitcoin, I believe, will be one of them. The Halvening will be part of the new story.

In the End, It Doesn’t Matter

All of this may be wishful thinking on my part.

More than ever, imho, and for the 100s of reasons I’ve already documented on this blog, the world needs decentralized markets and decentralized economies that work.

Personally, I want them here yesterday, but that’s not how it works because Bitcoin is a meditation.

As Wences said

“Bitcoin is patient. Bitcoin has all the time in the world.”

Stay safe and sane and healthy.