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SATOSHI’S THOUGHT PROCESS
Have you ever wondered what it must have been like for Satoshi Nakamoto back in 2008 when he published the Bitcoin Whitepaper? Spending countless hours in solitude, meticulously writing the code that would bring the world its first-ever successful attempt at creating a truly decentralized monetary network, the first of which our species has ever had the privilege of experiencing. The pseudonymous creator’s thought process is one we can’t picture - laying out Bitcoin’s framework and ironing out the innovation that is the network’s distributed ledger, the complex mining process that secures it. And then, one of the most fundamental, yet underappreciated, pieces of Satoshi's design was the pre-coded, fixed supply schedule with a 50% reduction in new issuance that happens quadrennially - the Bitcoin halving.
Hard-coded into Bitcoin’s core, this deflationary event called “the halving”, which enforces the reduction in the supply of the bitcoins being introduced into circulation, is undoubtedly a crucial technical element of the protocol and was a foundational design choice. The creation of a digital currency that would maintain its scarcity and by extension its value, over the long term. A digital currency that would exist beyond the reach of central banking policies and the whims of the hands that control them. That was Satoshi’s idea. And to properly execute this, it had to have a pre-programmed finite supply of 21 million units, with an engineered supply compression mechanism that gradually slows down the rate of issuance of new coins in a four-year cycle. I’m not going to get into too much detail about the Bitcoin halving and its technical aspects, because a lot of brilliant minds have already talked extensively about it, so why reinvent the wheel? Rather, let’s take a few steps back in time.
15 YEARS AGO
Let's go back a decade and a half, back to those grueling hours Satoshi Nakamoto must have spent working on Bitcoin. Hunched over, working tirelessly on the code, integrating the halving and all it was meant to represent for the network as a mechanism that ensures the long-term scarcity of this new digital currency. Theoretically, he must have known the profound impact the halving would have on the fiat value of Bitcoin. I mean, considering basic economics and how scarcity inversely correlates with value, it couldn’t have been hard to derive that conclusion. However, is it possible that he could have anticipated the significant cultural influence this pre-programmed technical process would take on?
In those early days, the Bitcoin community was a tiny one, comprising merely thousands globally - a few cypherpunks here and there, coders, and a handful of libertarian idealists tinkering in home offices, basements, and dorm rooms, securing the network while earning those block rewards. Unaware, of course, of the frenzy and excitement that would one day surround each approaching halving.
And yet, that obscure, humble beginning, was about to birth a cultural phenomenon unlike anything those first few miners nor even Satoshi could have envisioned. With the gradual emergence of Bitcoin into mainstream consciousness over its 15 years of existence, the 4-year hard-coded algorithmic ritual morphed from mere technicalities of a program, into a global celebration - an event that unifies Bitcoiners worldwide, no matter their creed, race, and political ideology and all other superficial ethnocultural and socio-economic classifications we have created - eagerly anticipating, planning parties, that have now come to mark the progression of this monetary revolution.
FROM MACRO EVENT TO QUASI-HOLIDAY
The once arcane, behind-the-scenes process of miners receiving fewer freshly minted bitcoin, blossomed into a veritable quasi-holiday for Bitcoiners and Cryptography enthusiasts. With its gradual emergence from the fringes, from the darker corners of the internet back in the days when it used to be seen as a tool for hackers, unscrupulous individuals, and bad actors, Bitcoin gained mainstream awareness, enabling the halving to take up a seemingly mystical significance. It became not just a routine supply shock in BTC issuance, but a chance for Bitcoiners around the world to unite in their shared commitment to a monetary protocol that at its foundation, possesses the core principles of decentralization, limited supply, and independence from government manipulation.
As we approach the 2024 halving - depending on when you’ll be reading this - it has become curiously impossible to ignore the growing cultural significance of this event. Halving countdowns have now become a recurrent element on social media. Bitcoin and Crypto news platforms, as well as mainstream media outlets and other financial news platforms, have published reports about the halving over the past few months. And then there are events and parties scheduled throughout April 2024. At these events, Bitcoiners will gather for halving-themed parties and events across the globe - from a "Bit-Rave" festival in San Salvador to themed happy hours in the pubs of Bedford, UK, and even a lakeside gathering in the California desert. There’s even talks of a bitcoin halving festival being held in Calabar, Nigeria. It's a fair bet that there must be a bunch of other such events either already past, or scheduled to hold within the month somewhere in the world.
Though admittedly not all of them are exactly “halving parties”, but, the fact that they are all scheduled for April when we expect the confirmation of the 840,000th block, tells all.
CEMENTING SATOSHI’S VISION FOR SCARCITY AND DECENTRALIZATION
As we look ahead towards the 2024 halving considering what it has grown to be these past decade-plus, one question comes to mind; will this quadrennial event continue to hold such profound significance? Bitcoin’s identity seems to have formed its base around the halving. It seems to have been ingrained in such a way that Bitcoin, as we know it today, will not be what it is without the event. That much is clear. It creates a reliable, as well as a predictable cadence for Bitcoiners to gather in a shared celebration of the protocol's core ethos. Each iteration reinforces the network's commitment to true digital scarcity, decentralization, immutability, and censorship resistance - the very principles that drew early adopters to this monetary revolution in the first place. The very same principles on which Satoshi’s vision - not the flawed BSV fork though - is based.
The halving can be said to be a self-fulfilling prophecy - each supply squeeze is expected to drive up bitcoin’s price, thereby further cementing its place as a store-of-value asset that transcends time. This “prophecy” has enabled analysts, traders, and institutions to develop entire frameworks around the halving’s anticipated impact. Which further emphasizes the point earlier alluded to; that it is ingrained in Bitcoin’s identity. This weaves it into the cultural fabric of the digital currency in a way that transcends its origins as merely a technicality.
CONCLUSION
As the 2024 Bitcoin halving approaches, its ever enduring significance may lie in its ability to consistently remind Bitcoiners of the network's unwavering principles. In an era marked by rapid technological shifts and widespread social upheaval, the halving's reliability and unchanging nature provides a sense of stability - a guidepost - so to speak - for this movement.
The halving serves as a totem, a rallying cry that unites Bitcoiners in their commitment to this monetary revolution, regardless of the fluctuations and disruptions that are unavoidable in the world we live in today. It will remain a quadrennial occurrence that will continue to hold an honored place in Bitcoin culture, reminding us of each passing cycle of the network's unshakable principles and the unstoppable force of Satoshi's infallible creation.
This event, this beacon of hope in unsettling times, represents an enduring constant, a touchstone that reinforces the immutable foundations upon which the Bitcoin network is built. As the celebrations surrounding the 2024 halving reach a fever pitch once more, we can be certain that this tradition will remain a vital part of the Bitcoin movement, serving as a guidepost for adherents weathering the storms of a rapidly changing technological, social landscape, geopolitical uncertainties, and global economic maelstrom.
This is a guest post by Emeka Ugbah. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.