# HODLING for at least 4 years has a minimum 18.9% APY.

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It just hit me last night while reading the intro to The Bitcoin Standard.

The value of the block rewards must on average exceed the cost of the electricity used to mine the blocks, with the difficulty adjustments keeping the cost and reward value near equilibrium as it fluctuates (With miners entering and exiting the pool).

When the block reward gets cut in half every 4 years, the value of the block reward (and thus the entire network) must at least double every 4 years to match or exceed the previous real world value before the halvening. Maintaining the value covering the cost of the electricity used to mine.

If you go to this website and compare literally any 2 dates exactly 4 years apart, the price will have grown more than 100%. Every single time. 4 years apart to the day.

https://www.in2013dollars.com/bitcoin-price

In essence, while the amount of BTC issued in the block reward gets cut in half every 4 years, the overall value over those 4 years must return to what it was, doubling the value of BTC like clockwork.

Also, some interesting math.

Future value ≥ Present Value + Time (4 years)

Future value -Time ≥ Present Value

-Time ≥ Present Value -Future Value

Time ≤ Future Value -Present Value. (Corrected inequality)

BTC is giving a direct monetary value to TIME ITSELF, converting time into money. This is deflationary. The value of the time is added to the network, and that value is no less than the difference between the present value and the future value it will be in 4 years. Which at least doubles, like clockwork, due the the havening. Brilliant.

Edit: Others have pointed out that the transaction fees will make up the majority of the block rewards long before 2140 which means as that time approaches my calculation of 18.9% as a minimum APY over 4 year cycles will be less accurate. As making up the value lost in the halvening will only get less as less influential on the price as time goes by. I hadn't considered that in my OP, and that makes sense. But this is good for adoption, the less volatile and less exciting it is the more stable and usable as a real store of value against inflation it will be.

Also, yes, nothing is absolutely guaranteed. The growth isn't guaranteed. But if the network continues to grow then I don't see BTC not doubling every 4 years until the block rewards are primarily transaction fees. As the network grows attacks will grow, and the miners that defend against these attacks need to be compensated to better secure the network. It's a cycle, as adoption grows the price grows, and more miners are needed for security, those miners need compensation to make it worth it but the amount of BTC compensation continually diminishes. A growing BTC network necessitates growth over time. By it's very nature this is deflationary. Which makes it better than FIAT. Who can say over time what it will be every year, but I'm going to treat it like it's 18.9% APY for my own buying and selling decisions.