A post by Vitalik Buterin in Bitcoin Magazine (@BitcoinMagazine) describes the upcoming block reward subsidy halving. Excerpts:
"Projected to take place on Wednesday [November 28, 2012] at around 18:00 UTC, for the first time ever in Bitcoin history, the rate at which new bitcoins are generated will permanently be cut by a factor of two,"
"[The block reward earned by miners is] the only way that new bitcoins come into existence. Any bitcoin that you send or receive was at one point somebody’s block reward."
"Bitcoin has a monetary policy that was coded into the system right from the start that reduces the rate over time. […] There will still always be one block coming out every ten minutes, but the number of bitcoins handed out as a reward in each block will come down in sharp steps."
"The event that will happen on Wednesday is exactly this; after block 210,000 hits, every block thereafter will have a reward of only 25 BTC instead of the original 50 [for approximately the next four years]"
"The second hypothesis is actually the one attacked more frequently: that the supply shock has not yet been priced into the market. [Detractors believe that] even if the supply of bitcoins coming into the market from miners will soon cut in half, the supply from traders [who’ve always known this was coming] will make up for it, and the price will remain roughly the same."
"There is also another very profound change that will soon take place in the Bitcoin mining ecosystem: the introduction of the ASICs. ASICs, or ‘application specific integrated circuits’."
"Thus we are going to see not just a reduction in revenue for Bitcoin’s miners, but also a shift in who Bitcoin’s miners are."
- http://bitcointalk.org/index.php?board=57.0 (Further discussion of this topic)
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