For people born on February 29, the leap year 2024 is the guarantee of beautiful gifts. For archers or field hockey players, 2024, the Olympic year, is a rare window of attention. For US political scientists, 2024 presidential year is an opportunity to display their knowledge on television sets.

Well, for those who love cryptocurrencies, 2024, the year of halving, is all of that at once. A lucrative year, where the “nocoiners” – understand the 89% of French people who have never bought crypto – are finally interested in you and where the media are lining up at your door for you to enlighten them.

Passion countdown

We were just waiting for our turn with Charles Guillemet, technical director (CTO) of Ledger, the world leader in cryptocurrency security, when our colleagues at World drew out their explanatory article. Closely followed by the AFP and its cohort of subscribing media.

Why, almost a week before the event, was there a rush to publish the bans? Why do some sites (like here) display a countdown on the home page separating us from halving ? Why does my neighbor, who has never invested in cryptos, ask me if this “alfing” might not be the martingale, the horse strap which was said to restrain chance?

“Because more mainstream media like yours are interested in cryptocurrencies on this occasion,” Charles Guillemet responds straight away. It creates activity for us too. People who already wanted to be interested in Bitcoin are finding out more. For example, they understand that securing their cryptos is really important and buy more of our products. THE halving, this is an opportunity to shine a light on Bitcoin. »

21 million bitcoins in lowercase

We haven't answered the question yet, but we're getting there. And indeed, it is time to talk about “corner”. Bitcoin, with a capital letter, is a blockchain, a chain of hundreds of thousands of blocks like so many pages of an accounting register.

At regular intervals, a new block is created, inside which new bitcoins appear, with a lower case since this time it is the currency. This will continue until approximately 2140, when all the bitcoins will have been created because unlike “classic” currencies, the issuance of which is fixed by central banks, we can say very precisely how many bitcoins will be put into circulation: 21 million.

The Lego of the Prince of Serbia

And this is where the famous halving. To explain it as best as possible, we contacted the greatest French teacher in the field. For five years, Laure Merlin has been crisscrossing the territory with Lego boxes to illustrate, brick in hand, how a blockchain works. Legend has it that she taught the son of the Prince of Serbia, then aged 4, the main principles of crypto. And in English. “His father was delighted because I gave him a little miner’s Lego, with the helmet and vest,” she confirms, smiling. Exactly the person we need…

“Bitcoin is an alternative monetary system that was designed to be safe from political decisions and all forms of manipulation,” begins the consultant. The inventor of Bitcoin planned to pay the people who were going to operate this system in two ways: with transaction fees and with the creation of new bitcoins. (Break)

At first, there weren't many participants, so there weren't many transaction fees. (Break) And so, there were more new bitcoins that were being created to pay the people who were serving this system. »

From the Tables of the Law to the salaries of nannies

If Laure speaks slowly, it's not (!?) because I'm a Teutau, but it's because she dictates to me the Tables of the law of Bitcoin, the very logic of this halving :

The inventor predicted that the more users there would be, the more transaction fees there would be and therefore the less people would want to create new bitcoins to pay the people who operate the system. Halving is this: approximately every four years, the creation of new bitcoins is halved.” »

We try an analogy: “Let’s say that miners are the nannies of the blockchain. There, it is decided that their salary is cut in half. Why would they continue to keep kids? »

Laure improvises: “Because there would be more transactions, therefore more children to look after… No, but your comparison doesn’t work. The amount of effort that goes into creating new bitcoins doesn't change. The number is fixed. Whereas if, for example, half the world's population suddenly started looking for gold with companies launching rockets to find asteroids full of gold, etc., obviously more would be found. This is not the case with Bitcoin. Nothing will change its rules. »

“From complexity comes chaos”

We leave without a figurine, but rather satisfied with the explanations. And then when writing the article, a doubt remains. “Nothing will change its rules. » Does this kind of certainty exist? Where is the immutable law engraved?

“In a distributed algorithm. What you need to understand is that Bitcoin is a distributed artificial intelligence that manages payments. It doesn't require a lot of creativity and the fact that it is limited is precisely what makes it interesting, because if it were sophisticated, it would become opaque. You know that chaos arises from complexity, Laurent? »

Absolutely, hence our anxiety. On the line, Pierre Noizat. In the crypto world, a pioneer is said to be an OG, an “original gangster”. And there is no more OG than Pierre Noizat. By creating Paymium, which he still chairs, he set up one of the very first companies in the world that allowed you to buy bitcoin.

The Bitcoin Cash hard fork

“Here, we are on something relatively simple to understand,” he reassures us. Every 210,000 blocks, we will divide the bitcoins that arrive by two. That is approximately every four years, since each block is separated by ten minutes. And so, dividing the quantity by two is what allows you to reach this famous asymptote of 21 million.

If someone decided to free themselves from halving, they could do so. Anyone can do it, you, me, except that we will create a new “corner”. It will be something else, what we call a hard fork, that is to say a non-consensual modification of the protocol. And in this case, we would create a new blockchain that would appear as a fork on Bitcoin. Blocks written from this point would be invalid on the Bitcoin network…” »

And has this already happened? “Yes, in 2017 with Bitcoin Cash. Today, if you look at its price, it is worth a small fraction of what a bitcoin is worth. I would say this is a good measure of how well people understand Bitcoin. As long as Bitcoin Cash has value, there are people who have not understood what I have just explained. OK ? »

Alice in the Land of Coconuts

OK ! But we would like a little drawing, despite everything. So before wrapping up, we launch a video with Daniel Villa-Monteiro. He has a doctorate in network algorithms and is an accomplished teacher, director of studies at the largest blockchain school in France, Alyra. A year ago, he published with Editions du Faubourg Alice in crypto land, a fascinating story around blockchains, in comic book form because… “Who wants to write yet another manual with boring diagrams? »

When we are interested in Bitcoin, Alice is obviously the beginner who falls down the white rabbit hole and dives ever deeper into knowledge of the sector. But she's also Bob and Charlie's friend, who we find at every technical explanation. It is true that “A gives to B and lends to C”, it is less pleasant to read than the troubles of the troop ofHASlists, Bob and VSharlie. Daniel knows this, and he also knows what intrigues us in this halving.

In fact, what is fascinating is that this is the first time in humanity that we have agreed to submit economically to a damn computer code. The code said: “We halve the rewards” and millions of users decided to follow the rule. »

“Bitcoin is a nation, it’s a religion, it’s a belief which consists of saying: we agree to halve our rewards because this is the only way to guarantee the value of our currency. And we make this sacrifice for the good of all. Damn, if that’s not coconut enough for you, I don’t know what you need…”

And here is the board he leaves us:

A page taken from "Alice in crypto land"the comic strip by Daniel Villa-Monteiro and Nicolas Balas.
A page taken from “Alice in the land of cryptos”, the comic book by Daniel Villa-Monteiro and Nicolas Balas.– Editions du Faubourg

We don't have time to be moved by Daniel's response. “Well, the miners are not completely stupid because they know that by playing the game, the price of bitcoin soars and the reality is that it has always more than doubled. »


AH!!! The money, here we come.

If a crowd of new investors become passionate about a detail of financial engineering, it is because they associate it, at least unconsciously, with the promise of profits. “Anyone who has a foundation in economics sees the opportunity,” confirms Daniel Villa. Tomorrow, we tell you that aluminum production will be halved, you will buy aluminum in anticipation”

Millions of satoshis will not be enough

And the movement doesn't stop there. Charles Guillemet warned us: “Bitcoin is the flagship of cryptos. We see that their valuation is directly linked to it. In my opinion, there is a quite psychological effect. New entrants who are interested in bitcoins say to themselves: “They are worth $67,000 each, that’s a lot. I will buy a crypto that is cheaper and I will be able to afford several” and this, even though bitcoin is divisible into 100 million satoshis. And there is also the idea that they missed the train. Bitcoin has already increased significantly so we will instead bet on a crypto that is just starting out, which has more potential. This is the mechanics that we saw in previous cycles and I think we will have the same this time. »

Be careful, however, specifies the CTO of Ledger, bitcoin prices have already soared a few weeks ago, driven by the creation of a financial instrument in the United States which allows a new audience to speculate on this crypto.

Miners' electricity bills

There is therefore no guarantee that prices will increase. Especially since, if there are mechanically fewer bitcoins issued from the halving, many miners must at the same time sell part of their reserves.

“What causes the price of a stock to vary is new information. It's not something you already know about a company, adds Pierre Noizat. There, you know: the quantity will be 21 million. There will be a small effect on supply at time t, because indeed, miners have to pay their electricity bill. This leads them to sell these new bitcoins. But they represent an increasingly smaller portion of sellers. In my opinion, the effect will be quite modest. »

Rise ? Drop ? To be sure, we will have to glue our eyes to the price of bitcoin and our nose to the countdown separating us from the event. The latest news is that it should take place early Saturday April 20. Maybe a little before because miners often redouble their efforts to get the last big rewards.

But that's another story that we'll tell you next time halving, in 4 years, if the US archers and political scientists don't steal the show. Until then, in crypto or elsewhere, only invest money you can afford to lose.

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