Decoding the Halvening: Why Your Helium Rewards Got Cut in Half

The problem

Some of you with keen eyes may have already observed a significant change. As of August 1st, your rewards have taken a noticeable dip - and not just a slight decrease, but a drastic 50% reduction. Welcome to the Halvening.

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The Halvening

To begin, it is important to clarify that there are no issues with your hotspots, regardless of whether you are using LORA or 5G - both will be affected. This event occurs every two years, precisely on August 1st, leading to a 50% reduction in your rewards. This reduction is a deflationary characteristic shared by several cryptocurrencies, where all emissions are decreased by 50%. The process is expected to last for 50 years until August 1st, 2069, after which the halvening will no longer occur.

The halving of Helium is an integral part of the protocol's design, serving as a critical mechanism to control the introduction of new Helium into circulation. This reduction in the epoch reward plays a crucial role in mitigating excessive inflation within the Helium ecosystem. By slowing down the influx of new Helium into the market, this purposeful issuance process is strategically engineered to maintain the stability and long-term value of the Helium tokens.

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Pros and Cons

While the following perspective is entirely subjective, it's crucial to consider both the potential benefits and drawbacks of this event. Let's begin with the negative aspects. When individuals witness a 50% drop in their rewards, some may react with panic and start spreading messages across the internet, claiming that Helium is finished and no longer profitable. Hotspot owners might be disheartened to see their hotspot generating only half the rewards it used to per day, leading to a doubling of the ROI timeline or even making it seem nearly non-existent. While this fear may deter newcomers, it is just one possible outcome, and those who panic may be jumping to conclusions.

Now, let's explore the potential positive outcome. Consider this: emissions have just been halved, implying that if everyone was previously receiving 10,000 tokens per day, they now receive only 5000 tokens. What does this mean? The tokens have essentially become twice as scarce, requiring twice as much time to accumulate the same amount as before. This scarcity could result in a significant price increase to align with the newfound rarity. Let's remember the tokens in your wallet - they have now become twice as rare. Keep that in mind.

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Final Thoughts

While no one can accurately predict future prices, it is vital to conduct thorough research, especially regarding Helium 5G and its vision of becoming the largest MVNO (Mobile Virtual Network Operator) in the USA, with Helium Mobile. Personally, I am optimistic about the Mobile Token's potential for price appreciation because this project offers tangible real-world utility. Unlike other projects that remain stagnant with mere whitepapers, Helium's ambition and real-world implementation set it apart, making it a promising investment in my view.

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