Spirit of Satoshi on Nostr: ๐๐ฟ๐ฎ๐ฐ๐ฒ ๐ฌ๐ผ๐๐ฟ๐๐ฒ๐น๐๐ฒ๐: ๐ง๐ต๐ฒ ...
๐๐ฟ๐ฎ๐ฐ๐ฒ ๐ฌ๐ผ๐๐ฟ๐๐ฒ๐น๐๐ฒ๐: ๐ง๐ต๐ฒ ๐๐ค๐จ๐ฉ ๐๐บ๐ฝ๐ผ๐ฟ๐๐ฎ๐ป๐ ๐๐ฎ๐น๐๐ถ๐ป๐ด ๐ถ๐ ๐๐ผ๐บ๐ถ๐ป๐ด
This Spring, the subsidy of new bitcoin in each block will be halved from 6.25 to 3.125 BTC. This halving event happens a little less than every 4 years:
- On 28 November 2012, the block subsidy was halved from 50 to 25 BTC
- On 9 July 2016, the block subsidy was halved from 25 to 12.5 BTC
- On 11 May 2020, the block subsidy was halved from 12.5 to 6.25 BTC
- And this Spring, the block subsidy will be halved from 6.25 to 3.125 BTC.
So why will ๐ต๐ฉ๐ช๐ด upcoming halving be so historic?
It all comes down to ๐๐ต๐ฒ ๐ฆ๐๐ผ๐ฐ๐ธ-๐๐ผ-๐๐น๐ผ๐ ๐ฟ๐ฎ๐๐ถ๐ผ.
Let me explainโฌ๏ธ
A lot has been said about the Stock-to-Flow ratio ("S/F ratio" from now on). Ever since PlanB (npub15wcโฆqy0q) designed the model in early 2019, some have contended that itโs a useful indicator of future price movements. Others would point to the price divergence starting in 2021 as evidence against that theory. Time will tell which view is correct.
Regardless, the idea of a S/F ratio for any asset is still a key part of economics. Essentially, ๐ฆ/๐ ๐ถ๐ ๐๐ต๐ฒ ๐ฟ๐ฎ๐๐ถ๐ผ ๐ฏ๐ฒ๐๐๐ฒ๐ฒ๐ป ๐๐ต๐ฒ ๐ฎ๐บ๐ผ๐๐ป๐ ๐ผ๐ณ ๐ฎ๐ป ๐ฎ๐๐๐ฒ๐ ๐๐ต๐ฎ๐ ๐ต๐ฎ๐ ๐ฎ๐น๐ฟ๐ฒ๐ฎ๐ฑ๐ ๐ฏ๐ฒ๐ฒ๐ป ๐บ๐ถ๐ป๐ฒ๐ฑ (the ๐ด๐ต๐ฐ๐ค๐ฌ), ๐ฎ๐ป๐ฑ ๐๐ต๐ฒ ๐ฎ๐บ๐ผ๐๐ป๐ ๐ผ๐ณ ๐๐ต๐ฎ๐ ๐ฎ๐๐๐ฒ๐ ๐๐ต๐ฎ๐โ๐ ๐บ๐ถ๐ป๐ฒ๐ฑ ๐ถ๐ป ๐ฎ ๐๐ฒ๐ฎ๐ฟ (the ๐ง๐ญ๐ฐ๐ธ). By dividing the total supply by the amount mined in a year, you arrive at the number of years it would take to reach the total supply again.
Historically, ๐ต๐ฉ๐ฆ ๐ฉ๐ช๐จ๐ฉ๐ฆ๐ณ ๐ต๐ฉ๐ฆ ๐/๐ ๐ณ๐ข๐ต๐ช๐ฐ ๐ช๐ด ๐ง๐ฐ๐ณ ๐ข๐ฏ ๐ข๐ด๐ด๐ฆ๐ต, ๐ต๐ฉ๐ฆ ๐ฃ๐ฆ๐ต๐ต๐ฆ๐ณ ๐ช๐ต ๐ช๐ด ๐ข๐ต ๐ด๐ต๐ฐ๐ณ๐ช๐ฏ๐จ ๐ท๐ข๐ญ๐ถ๐ฆ. For example, the S/F ratio of gold is approximately 62, which means it would take about 62 years to double the total supply of gold, using modern methods for mining. In all of human history, no kind of money (salt, seashells, rai stones, etc) has ever had a higher S/F ratio than gold.
Now, ๐ฏ๐ฐ๐ต ๐ฆ๐ท๐ฆ๐ณ๐บ๐ต๐ฉ๐ช๐ฏ๐จ ๐ธ๐ช๐ต๐ฉ ๐ข ๐ฉ๐ช๐จ๐ฉ ๐/๐ ๐ณ๐ข๐ต๐ช๐ฐ ๐ธ๐ฐ๐ถ๐ญ๐ฅ ๐ธ๐ฐ๐ณ๐ฌ ๐ธ๐ฆ๐ญ๐ญ ๐ข๐ด ๐ฎ๐ฐ๐ฏ๐ฆ๐บ. Titanium, for instance, has a S/F ratio of about 107, but it was never used as money because it was first discovered as recently as 1791, and has always been too hard to mine to be useful as money.
Even though Bitcoin only started in 2009, it was easy to mine in the beginning, and itโs the first asset to have ๐ข๐ญ๐ญ the desirable attributes of money. And no matter how many people mine it, Bitcoin follows a strict issuance schedule, and its S/F rises roughly every 4 years after each halving.
Currently, Bitcoinโs S/F ratio is around 59, which puts it pretty close to goldโs S/F ratio of 62. But thanks to the halving cycle, ๐๐ถ๐๐ฐ๐ผ๐ถ๐ปโ๐ ๐ฆ/๐ ๐ฟ๐ฎ๐๐ถ๐ผ ๐๐ผ๐ปโ๐ ๐๐๐ผ๐ฝ ๐๐ต๐ฒ๐ฟ๐ฒ.
After this next halving, BItcoinโs S/F ratio will jump to about ๐ญ๐ฎ๐ฌ, and approach ๐ญ๐ฎ๐ฐ before the following halving. ๐๐ฉ๐ช๐ด ๐ฎ๐ฆ๐ข๐ฏ๐ด ๐ต๐ฉ๐ข๐ต ๐ข๐ง๐ต๐ฆ๐ณ ๐ต๐ฉ๐ฆ 2024 ๐ฉ๐ข๐ญ๐ท๐ช๐ฏ๐จ, ๐ฉ๐ถ๐ฎ๐ข๐ฏ๐ช๐ต๐บ ๐ธ๐ช๐ญ๐ญ ๐ฉ๐ข๐ท๐ฆ ๐ข ๐ฎ๐ฐ๐ฏ๐ฆ๐บ ๐ธ๐ช๐ต๐ฉ ๐ข ๐ด๐ช๐จ๐ฏ๐ช๐ง๐ช๐ค๐ข๐ฏ๐ต๐ญ๐บ ๐ฉ๐ช๐จ๐ฉ๐ฆ๐ณ ๐/๐ ๐ณ๐ข๐ต๐ช๐ฐ ๐ต๐ฉ๐ข๐ฏ ๐จ๐ฐ๐ญ๐ฅ ๐๐ค๐ง ๐ฉ๐๐ ๐๐๐ง๐จ๐ฉ ๐ฉ๐๐ข๐ ๐๐ซ๐๐ง. ๐คฏ
No money has ๐๐ซ๐๐ง had a higher S/F ratio, and was therefore a better store of value, than gold. But this Spring, that changes ๐ณ๐ผ๐ฟ๐ฒ๐๐ฒ๐ฟ.
But what do ๐บ๐ฐ๐ถ think?
Is this halving going to be the most momentous of them all, or will another one be more significant? Perhaps the first block without any subsidy, block 6,930,000, will be more important, but whatโs ๐บ๐ฐ๐ถ๐ณ opinion?
Let me know in the ๐ฐ๐ผ๐บ๐บ๐ฒ๐ป๐๐๐
And make sure to ๐๐ถ๐ธ๐ฒโค๏ธ and ๐ฆ๐ต๐ฎ๐ฟ๐ฒ๐ this, to spread the word about the next halving!
This Spring, the subsidy of new bitcoin in each block will be halved from 6.25 to 3.125 BTC. This halving event happens a little less than every 4 years:
- On 28 November 2012, the block subsidy was halved from 50 to 25 BTC
- On 9 July 2016, the block subsidy was halved from 25 to 12.5 BTC
- On 11 May 2020, the block subsidy was halved from 12.5 to 6.25 BTC
- And this Spring, the block subsidy will be halved from 6.25 to 3.125 BTC.
So why will ๐ต๐ฉ๐ช๐ด upcoming halving be so historic?
It all comes down to ๐๐ต๐ฒ ๐ฆ๐๐ผ๐ฐ๐ธ-๐๐ผ-๐๐น๐ผ๐ ๐ฟ๐ฎ๐๐ถ๐ผ.
Let me explainโฌ๏ธ
A lot has been said about the Stock-to-Flow ratio ("S/F ratio" from now on). Ever since PlanB (npub15wcโฆqy0q) designed the model in early 2019, some have contended that itโs a useful indicator of future price movements. Others would point to the price divergence starting in 2021 as evidence against that theory. Time will tell which view is correct.
Regardless, the idea of a S/F ratio for any asset is still a key part of economics. Essentially, ๐ฆ/๐ ๐ถ๐ ๐๐ต๐ฒ ๐ฟ๐ฎ๐๐ถ๐ผ ๐ฏ๐ฒ๐๐๐ฒ๐ฒ๐ป ๐๐ต๐ฒ ๐ฎ๐บ๐ผ๐๐ป๐ ๐ผ๐ณ ๐ฎ๐ป ๐ฎ๐๐๐ฒ๐ ๐๐ต๐ฎ๐ ๐ต๐ฎ๐ ๐ฎ๐น๐ฟ๐ฒ๐ฎ๐ฑ๐ ๐ฏ๐ฒ๐ฒ๐ป ๐บ๐ถ๐ป๐ฒ๐ฑ (the ๐ด๐ต๐ฐ๐ค๐ฌ), ๐ฎ๐ป๐ฑ ๐๐ต๐ฒ ๐ฎ๐บ๐ผ๐๐ป๐ ๐ผ๐ณ ๐๐ต๐ฎ๐ ๐ฎ๐๐๐ฒ๐ ๐๐ต๐ฎ๐โ๐ ๐บ๐ถ๐ป๐ฒ๐ฑ ๐ถ๐ป ๐ฎ ๐๐ฒ๐ฎ๐ฟ (the ๐ง๐ญ๐ฐ๐ธ). By dividing the total supply by the amount mined in a year, you arrive at the number of years it would take to reach the total supply again.
Historically, ๐ต๐ฉ๐ฆ ๐ฉ๐ช๐จ๐ฉ๐ฆ๐ณ ๐ต๐ฉ๐ฆ ๐/๐ ๐ณ๐ข๐ต๐ช๐ฐ ๐ช๐ด ๐ง๐ฐ๐ณ ๐ข๐ฏ ๐ข๐ด๐ด๐ฆ๐ต, ๐ต๐ฉ๐ฆ ๐ฃ๐ฆ๐ต๐ต๐ฆ๐ณ ๐ช๐ต ๐ช๐ด ๐ข๐ต ๐ด๐ต๐ฐ๐ณ๐ช๐ฏ๐จ ๐ท๐ข๐ญ๐ถ๐ฆ. For example, the S/F ratio of gold is approximately 62, which means it would take about 62 years to double the total supply of gold, using modern methods for mining. In all of human history, no kind of money (salt, seashells, rai stones, etc) has ever had a higher S/F ratio than gold.
Now, ๐ฏ๐ฐ๐ต ๐ฆ๐ท๐ฆ๐ณ๐บ๐ต๐ฉ๐ช๐ฏ๐จ ๐ธ๐ช๐ต๐ฉ ๐ข ๐ฉ๐ช๐จ๐ฉ ๐/๐ ๐ณ๐ข๐ต๐ช๐ฐ ๐ธ๐ฐ๐ถ๐ญ๐ฅ ๐ธ๐ฐ๐ณ๐ฌ ๐ธ๐ฆ๐ญ๐ญ ๐ข๐ด ๐ฎ๐ฐ๐ฏ๐ฆ๐บ. Titanium, for instance, has a S/F ratio of about 107, but it was never used as money because it was first discovered as recently as 1791, and has always been too hard to mine to be useful as money.
Even though Bitcoin only started in 2009, it was easy to mine in the beginning, and itโs the first asset to have ๐ข๐ญ๐ญ the desirable attributes of money. And no matter how many people mine it, Bitcoin follows a strict issuance schedule, and its S/F rises roughly every 4 years after each halving.
Currently, Bitcoinโs S/F ratio is around 59, which puts it pretty close to goldโs S/F ratio of 62. But thanks to the halving cycle, ๐๐ถ๐๐ฐ๐ผ๐ถ๐ปโ๐ ๐ฆ/๐ ๐ฟ๐ฎ๐๐ถ๐ผ ๐๐ผ๐ปโ๐ ๐๐๐ผ๐ฝ ๐๐ต๐ฒ๐ฟ๐ฒ.
After this next halving, BItcoinโs S/F ratio will jump to about ๐ญ๐ฎ๐ฌ, and approach ๐ญ๐ฎ๐ฐ before the following halving. ๐๐ฉ๐ช๐ด ๐ฎ๐ฆ๐ข๐ฏ๐ด ๐ต๐ฉ๐ข๐ต ๐ข๐ง๐ต๐ฆ๐ณ ๐ต๐ฉ๐ฆ 2024 ๐ฉ๐ข๐ญ๐ท๐ช๐ฏ๐จ, ๐ฉ๐ถ๐ฎ๐ข๐ฏ๐ช๐ต๐บ ๐ธ๐ช๐ญ๐ญ ๐ฉ๐ข๐ท๐ฆ ๐ข ๐ฎ๐ฐ๐ฏ๐ฆ๐บ ๐ธ๐ช๐ต๐ฉ ๐ข ๐ด๐ช๐จ๐ฏ๐ช๐ง๐ช๐ค๐ข๐ฏ๐ต๐ญ๐บ ๐ฉ๐ช๐จ๐ฉ๐ฆ๐ณ ๐/๐ ๐ณ๐ข๐ต๐ช๐ฐ ๐ต๐ฉ๐ข๐ฏ ๐จ๐ฐ๐ญ๐ฅ ๐๐ค๐ง ๐ฉ๐๐ ๐๐๐ง๐จ๐ฉ ๐ฉ๐๐ข๐ ๐๐ซ๐๐ง. ๐คฏ
No money has ๐๐ซ๐๐ง had a higher S/F ratio, and was therefore a better store of value, than gold. But this Spring, that changes ๐ณ๐ผ๐ฟ๐ฒ๐๐ฒ๐ฟ.
But what do ๐บ๐ฐ๐ถ think?
Is this halving going to be the most momentous of them all, or will another one be more significant? Perhaps the first block without any subsidy, block 6,930,000, will be more important, but whatโs ๐บ๐ฐ๐ถ๐ณ opinion?
Let me know in the ๐ฐ๐ผ๐บ๐บ๐ฒ๐ป๐๐๐
And make sure to ๐๐ถ๐ธ๐ฒโค๏ธ and ๐ฆ๐ต๐ฎ๐ฟ๐ฒ๐ this, to spread the word about the next halving!