Opinion by: Ken Alabi
Every four years, a few months after the Bitcoin halving, the blockchain ecosystem undergoes heightened public scrutiny. Typically lasting over a year, this period is driven by fundamental economic principles: When an asset’s supply is reduced while demand remains steady or increases, its value generally rises. Historically, this supply shock has triggered Bitcoin-led market appreciation, sparking increased interest and participation from users, developers, investors and policymakers.
During these post-halving periods, the blockchain industry has showcased its projects, technological innovations and potential utilities. None of the prior cycles have yielded a blockchain application that unequivocally eclipses existing technologies in any specific area. Yet, blockchain’s core strengths — immutability, data transparency and user asset sovereignty enabled by private key encryption — continue to attract innovators. These features have been creatively applied across numerous sectors, including borderless payment systems, DeFi, NFTs, gaming systems with recorded in-game assets, fan and loyalty tokens, transparent grants and charity disbursement systems, agricultural subsidies and loan tracking.
While past cycles have highlighted blockchain’s potential, the next period promises to audition new use cases, as detailed below.
Lessons from past halving cycles
The 2012 post-halving period highlighted the potential for non-mediated, borderless payment systems. Before Bitcoin, intermediated payments and sluggish cross-border transactions were the norm — international transfers took days and check clearances were equally slow. Bitcoin hinted at a future of seamless payments, and early adopters tracked the number of businesses accepting Bitcoin. Still, scalability issues and rising transaction costs limited this utility. Ironically, many blockchain networks penalized their success through fee structures that hindered growth. This cycle ended with security breaches, notably the Mt. Gox hack 20…
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