Quote from: rocanonz on February 08, 2016, 06:06:07 PM

In my mind, economics would predict the hashrate to halve as the reward halves. Essentially the argument would go if the price has not doubled the hashrate must fall."

Tim Swanson - Director of Market Research at R3CEV

Correct. If the price doesn't go up, the miners would jump ship, and the difficulty would fall, essentially creating price/reward equilibrium. The first halving of BTC was an interesting time, because you saw a shift in mining technology. I'm pretty sure it's safe to assume that everyone who was mining BTC with GPUs(myself included) before the halving pretty much stopped in the following months when the price was stable. But the price jumped like 15x shortly after that, and then ASICs hit chain. So it was a really interesting time for BTC market dynamics. However, this summer should be a true indication of the effect the halving schedule has on market dynamics. Even if the increase is gradual, it will be very sharp when looked at from a longer timeline. Yes, month to month it's not going to look crazy, but over a 3-6 month span I'm almost guaranteeing that you will see a considerable increase in price following the halving. I don't think you'll see enough of a decrease in mining to equalize the price/reward ratio. Time will tell though which way it will go.

But either way it goes, it's still disruptive. Sharp increases or decreases in price or hashrate aren't ideal, especially when we're talking about a daily use coin. I personally want to see things run as smoothly as possible for the foreseeable future.

I'm not an economist like some of the folks in the team or in this thread. I would think though that a gradual decrease in the inflationary rate would be better than hard halvings. I'd love to know why it wouldn't. The only reason I could see BTC using a hard halving is because it was easy to code and it was simple. That can't be the only reason why coins continue to follow the halving model started by BTC. If AUR is going to be the model for how a country coin replaces the fiat currency, lets get really serious about how the currency is modeled, and not just because BTC did it that way.

-Fuse