Block halvings, which happen every four years, form a key component of bitcoin’s code. Every 10 minutes, a miner on the bitcoin network receives a pre-set number of newly-created bitcoins after solving a given cryptographic block puzzle. These rewards are cut in half every four years, subsequently reducing the number of new bitcoins entering circulation.
Well-known quant analyst PlanB recently pointed out that BTC’s halving coincides with the presidential elections in the United States. Is this the crux of Satoshi’s brilliance or just a mere coincidence?
Bitcoin Halvings Happen At The Same Time As The United States Presidential Elections
The bitcoin protocol was designed such that it undergoes halving after every four years (or every 210,000 blocks). This event has already happened twice before in bitcoin’s existence. The first halving happened in November 2012. Four years later in July 2016, bitcoin underwent its second halving. The third halving is slated for around May 14, 2020.
Block rewards for miners on the bitcoin network started at 50 BTC per block in 2009. After the 2012 halving, they reduced to 25 BTC for each block discovered. The rewards were again halved to 12.5 BTC after the halving in 2016. In less than 40 days, these rewards will be slashed to 6.25 BTC.
The pseudonymous bitcoin creator, Satoshi Nakamoto, programmed BTC’s block rewards to reduce over time. This design makes the flagship cryptocurrency unique in comparison to the traditional financial systems where the money supply is primarily controlled by irresponsible central banks. Contrary to bitcoin’s ingrained halving, the supply of fiat currencies (read: USD) has grown exponentially over the years.
Interestingly enough, bitcoin’s halvings (in 2012, 2016 and now 2020) all happen the same year when the United States elects a new president.
Is It All A Big Coincidence Or Did Satoshi Intend It To Be So?
A good number of the crypto community on Twitter gave their opinions regarding this interesting fact. Some suggested that Satoshi intended for the bullish action associated with the BTC halving to fall on leap years.
Others explained that this is simply because financial crises almost always occur during an election year, for instance, the 2008 financial crisis. PlanB seconded this idea, adding that there is a lot of volatility during an election year where the weak hands are shaken out.
In short, the majority of the comments point to this being Satoshi’s genius – not just a coincidence.
But the truth is, we will never know if this was indeed part of Satoshi’s grand design. Satoshi Nakamoto, who may have been one person or a group of people, disappeared soon after releasing the bitcoin protocol into the world in 2009.
As such, he is not around to explain whether he really intended bitcoin’s halving to happen the same year as US presidential elections or if it’s just a simple coincidence.
What’s more important, however, is the fact that the halving event is historically bullish for the bitcoin price.