Miners, as one can imagine, stand to be impacted the most when the next halving event takes place.
In the white paper, Satoshi explains that the addition of bitcoin comes at the expense of CPU time and electricity. Miners have special-purpose pieces of hardware that are constantly running in a bid to discover the next block, using a constant flow of electricity along the way.
They make money when the revenue generated through mining those bitcoins exceeds the cost of running the mine, which in addition to electricity also includes personnel overheard, insurance and any other charges that come along with powering a high-intensity data center.
But with the halving, miners stand to see their revenue fall by a commensurate amount, bringing with it a significant impact on their business.
According to the CoinDesk Bitcoin USD Price Index, the price of bitcoin averaged $577 as of 12PM EST on 10th June. If the 420,000th block were to have been sealed with the market at that price, the amount of revenue denominated in US dollars that a miner could expect to receive would have fallen from $14,425 to $7,212.50 in an instant.
Losing 50% of revenue could result in some bitcoin miners having to shut their operations down. At least one miner has moved to pull the plug ahead of the halving.
However, there has been rigorous debate over how much of a concern the halving will be, given that the event is pre-programmed in the code and miners have likely been preparing for the event. Unlike with gold or another precious metal where a new, big discovery can happen at any time, miners know exactly what to expect and when.
Some argue that miners don’t necessarily have to lose 50% of their revenue simply because their income is going to drop by half. As the argument goes, prevailing demand for bitcoins will stay constant, forcing the price higher once fewer bitcoins are being generated on a day-to-day basis.
For example, if miners were selling all 25 of their bitcoins per block to pay their bills, this would be an introduction of 25 new bitcoin into the market roughly every ten minutes (though this can fluctuate depending on network variance).
If the price were to stay constant at $577 even with these new bitcoins being added, that means there is $14,425 of available demand for every given block.
If the number of available bitcoin released every ten minutes were to fall by half to 12.5 BTC, the price of bitcoin will have to increase to make up for the $14,425 in available demand. Therefore, just because a miner sees its subsidy drop from 25 bitcoin to 12.5 doesn’t mean the revenue in USD will drop as well.