 Why the sudden halving every four years? I understand that the Bitcoin reward per block has to be a decreasing function, such that the sum of all rewards would be finite, like 21 million after 100 years. But why not choose a simple, decreasing function that would smoothly go to zero? Isn't it inconvenient that every four years the profitability of miners suddenly decreases, or otherwise fees suddenly have to increase in order to compensate? That is a question that has been asked many times, why Satoshi did it that way. Why not have a smoothly decreasing function instead of having a step function? Currently, the production of Bitcoin, the issuance of Bitcoin on the blockchain every ten minutes, is twelve and a half Bitcoin, so twelve and a half for four years. In 2020, boom, it goes down to six and a quarter, and gets divided by half, this halving function. Part of it is, that is the way Satoshi built it. Once it was built and in progress, there is very little incentive for miners to change that. There is very little desire for anyone to change that fundamental function. Obviously, by postponing the pain of a step function all of the four years up to that step decrease, you are getting the full amount, so you are not getting a gradual decrease. Which means that it does give an early advantage to those who are mining now versus in the future. One way to look at it is that, despite the fact that it is a step function, because it is broadly known that the profitability will drop by exactly half every four years, and because that is known well in advance, we know exactly how that step function is going to work out all the way to the year 2140. Miners effectively build their operational models to account for that. No one is surprised by this. The market already prices in that consideration years before it actually happens. From an operational perspective, miners are already adjusting for the profitability that is going to happen after the halving, up to a year before the halving. Investments in infrastructure, operational costs, electricity costs, etc. are all taken into consideration, knowing that this is going to happen. The market ends up pricing this in so that when it actually happens, not much changes, because the network was already ready for it. That is the fundamental difference between the halving of Bitcoin, for example, and a sudden change in the interest rate of a fiat currency, which is unexpected, and the market has to adjust. In that scenario, the market does not know there is a probability, and that probability is appropriately accounted for, in the pricing of a currency. In Bitcoin, it is not a probability, it is a certainty. It is a certainty that is known well in advance, and therefore people can plan for it. Why did it not happen this way? That is not how Satoshi did it. Once it was done, it was done. Could it have been better with a stepped decrease? Well, there are the blockchains where that is the case. It is a mixed bag. I do not know that this is a particularly big disadvantage of Bitcoin. So far, what we have seen is that the two halvings that have happened have been largely uneventful, if anything, they have caused an increase in the value of Bitcoin right after the halving. It does not seem to be a problem. Vladimir asks, what trends in the Bitcoin ecosphere do you think will be emerging in the long run? As the block reward will be getting smaller and smaller, will there be less miners? Will security be compromised as a result? Will transaction fees skyrocket to support miners? Honestly, none of the above. I think that as block rewards get smaller, as Satoshi predicted, in both the paper and many of his writings, fees are going to have to replace the reward. However, those fees may come from more transactions or bigger transactions that aggregate things on the second layer. The value of Bitcoin may be very different than it is today. That may mean that miners can be compensated through that. Quite honestly, if we have less mining than we have right now, if we have less proof of work, that does not make the system insecure. We have been growing at such a ridiculously exponential rate in terms of the total mining power, that Bitcoin was secure two years ago, and 90% of the mining we have today did not exist. We have been going at an order of magnitude increase every two years. At that rate, making the network ten times more secure does not mean that it was not secure before. If we did have a reduction of miners, there are levels of security with proof of work that we had in the past that are perfectly capable of maintaining the security of the network. I don't think we have any major problems. Historically, every time there has been a halving, that has affected the long-term price by increasing the price of Bitcoin. It has mostly been a non-event. The halving is something that you can predict with certainty, but not accuracy, years in advance, and with somewhat accuracy as you get closer and closer to the event. Then, of course, it does happen on the exact block you expect it to happen. The entire market prices that in with increasing level of accuracy as you get closer to the event, and so do the miners in their operating models and profit models. It becomes a non-event in the end. I think it will continue to do that.