Modelos de halving para bitcoin: un acercamiento desde la simulación

Halving models for bitcoin: an approach from simulation

Julián Alberto Uribe Gómez

Bitcoin has been the subject of debate, multiple opinions and controversies since its creation as a cryptocurrency 10 years ago, not only because of its attractiveness as a digital asset with high returns but also for its uses, which include, among other illicit activities.

Bitcoin is the first and main currency created by a group or person called Satoshi Nakamoto, which aimed to develop a way to make online P2P payments without the need for intermediaries such as financial institutions (Nakamoto, 2008), likewise, to demonstrate the creation of value without relying on central organizations.

Bitcoins like any financial asset must be generated, as in the case of gold, that is, it must be exploited and subsequently negotiated in supply and demand processes in a specific market to obtain value, so this process of generating supply in the market Cryptoactive is known as mining, the only way in which new cryptocurrencies can be generated, this is done by solving increasingly complex mathematical problems, where thousands of mining nodes around the world compete to obtain new bitcoins.

Initially, the bitcoin protocol created by Satoshi Nakamoto included a total production or fixed offer of 21 million cryptocurrencies, this with the sole purpose of avoiding asset inflation, much of the attractiveness of bitcoin lies in the promise of convertrise into a product scarce and with a value that climbed up to 20 thousand dollars per bitcoin at the end of 2017, so chasing a deflationary model will generate its value gradually. The intensive mining of this asset and the imposed production protocol has generated a reduction process, as shown in Figure 1, a little more than 17 million bitcoins have been produced and mined, approximately 83% of the total bitcoins.

This process of reducing bitcoin mining is known as halving, which is an automated process of halving bitcoins delivered to miners as a reward for the creation of new blocks, so every 210000 blocks mined or which is equivalent to approximately every 4 years, the amount of bitcoins delivered per block is reduced, so, in 2009 the process began delivering 50 bitcoins per block, then 25 bitcoins per block, currently, 12.5 bitcoins are being mined per block, until the quota of zero bitcoins per block is reached. Estimates of when this will happen will be in the year 2140.

From the system dynamics modeler for the NETLOGO platform, some approaches to the behavior of halving or reduction processes for bitcoin can be explored, illustration 2 presents an approach mostly calculated according to the ideal behavior of the bitcoin reduction system, where As mentioned before every 4 years the number of bitcoins is reduced by half.

The behavior of these models is known as exponential decay and goal search, both behaviors can be observed in illustration 3. It is observed that theoretically through the model, in halving 34 0 bitcoins will be rewarded, time in which the offer of The cryptocurrency will have stopped.

However, this reduction process also depends on additional factors to operate, it is also a more comprehensive process within the cryptocurrency system. Mining bitcoins requires suitable locations to carry out this process, mining nodes and even equipment with specific characteristics to create the bitcoins and obtain the reward. A halving process that includes more comprehensive features can be proposed as seen in illustration 4.

The result of this model, which is represented in Figure 5, resembles the behavior observed in Figure 1, where it begins with a smooth, less steep growth and not with a slope so steep in the amount of bitcoins mined, where the total is gradually reached.

Finally, bitcoin and in general all the cryptocurrencies developed to date have managed to focus a precedent and change the way of seeing the economy, through decentralized proposals. The cryptocurrencies operate and will continue to operate because their innovative, technical and technological development has been gaining strength, all this has developed a market and the exploration of new possibilities.