Expected to take place in April 19th 2024, the supply will be cut from 6.25 to 3.125 BTC every 10 minutes.

Dear Bitcoiner and Friend:

If you have been following the news lately, Bitcoin appears to be on the minds of the big tech players, investors and nation states.

There are endless discussions on social media about what will happen when the supply will be cut in half on April 19, 2024.

If you hold Bitcoin, just keep holding because your bags will appreciate in value.

But if you are new to Bitcoin and wondering why the upcoming Bitcoin Halving is significant to bagholders, keep reading as I will attempt to explain it briefly and in direct, simple terms.

Decrease in Supply and Increase In Demand Means More Purchasing Power

A Bitcoin halving is a major event that occurs once every 210,000 blocks, or every 4 years.

It started off as 50 BTC rewarded to the miners to generate the next block and currently we are at 6.25 BTC per block. The upcoming halving will cut it down to 3.125 BTC.

The last halving is expected to take place in 2140 when no more Bitcoin will be rewarded to the miners. But without miners in the network, no transactions would get added to the blockchain, in which case the incentive to keep the rigs going will be through fees.

The significance of these event rests mainly on how it affects the price. As supply decreases and demand increases, the price of the asset goes up which can result in a bull run.

This gives you more purchasing power because when priced in Bitcoin you are able to buy more with your money. It also means greater savings and a secure future in a world of uncertainty because Bitcoin can’t be manipulated by centralized authorities.

The Scarcest Asset in the Universe

For thousands of years, humans have mined gold and given it value because it is scarce and difficult to mine.

But In June of 2023, Ugandan officials announced that approximately 31 million metric tonnes of gold ore had been discovered in the country. NASA is even talking about the possibility of mining precious metals on Asteroids, increasing the supply exponentially.

On the other hand, Bitcoin has a known quantity of** 21 Million coins**, unlike gold.

It is also exceedingly difficult to mine as new miners join the network with massive factory sized rigs to solve the SHA-256 consensus algorithm. This is known as Proof-of-Work and is the reason the network is so secure.

It requires an incredible amount of energy— about 155,000 kWh. By comparison an average american uses about 900 kWh.

A scarce asset is ultimately the best way to save money and secure a better future. Since Bitcoin is electronic, it can be moved around at the speed of light anywhere in the world where there is Internet access.

Though it is hard to predict what the price will be at any given moment, after 15 years we know that this commodity isn’t going anywhere About 1.9 million coins are still left to be mined.

Inflation Rises When There Is No Cap In Money Printing

The silent killer of all savings, and the reason recessions have become a regular phenomenon is because of the non-stop printing of money. Central banks flood the market with more fiat, causing the value of the dollar to go down.

Businesses are forced to increase their prices on goods and services since profits can’t keep up with inflation. Jobs are cut, the economy suffers which leads to more printing to stabilize the economy. It is a vicious cycle.

What makes this scheme particularly egregious is the fact that it is being controlled and manipulated by an unelected body: The Federal Reserve in America and central bankers around the world. Fiat currency is fundamentally worthless, but is given value by decree.

There is no limit in how much can be printed. With Bitcoin, we know the total supply and that the production of new coins is cut in half every 210,000 blocks. More importantly the supply cannot be manipulated which makes Bitcoin a great hedge against inflation.

The Future is Bright with Bitcoin

Bitcoin is a sound savings technology. Though the price may be volatile and there are many opponents who would rather see Bitcoin dead, it doesn’t change the usefulness of the asset. Or its fundamental properties of scarcity and decentralization.

Bitcoin has a secure future and the escape velocity away from fiat is only a matter of when, not if.

Let me know what you think in the comments below.

Yours Truly,

Jay Khan

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