A day later, the reward for the Bitcoin block will fall by half.
Why does this happen and why does it matter?
Bitcoin emission is limited . The maximum possible number of cryptocurrency units in the Bitcoin system is 21 million coins. In addition, Satoshi Nakamoto during the formation of the system provided for a drop in remuneration for a decided Bitcoin block by 50% every 210 thousand blocks. About 6 blocks are created within an hour. It takes about 4 years to generate 210 thousand blocks and a fall in remuneration twice.
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In practice, this means that if from 2012 to 2016, the miner received 25 bitcoins per block, after a fall in the amount of remuneration for him, he will receive only 12.5 bitcoins. In this case, we assume that the power of equipment for mining remains the same. Why Satoshi Nakamoto imposed this restriction?
The main reason for introducing a restriction of remuneration is the need to control inflation. Here you can use the example from the sphere of traditional finance: the central banks of countries, if necessary, can print as much money as they want. If the issue is too high, inflation occurs, the value of the currency drops.
In a day (at the time of publication of the article). View detailed information about the status of the Bitcoin system here .
Current system status
Some representatives of the cryptocurrency market think that the day after tomorrow, due to the output of a number of miners from the system, the total mining capacity will fall. In particular, Chandler Guo , one of the most well-known owners of mining farms from China, thinks so. This may adversely affect the verification of transactions in the network - some will be impossible to track. This situation will lead to a drop in confidence in digital currency.
C this opinion does not agree Bobby Lee, CEO Bitcoin exchange BTCC. He argues that the drop in capacity can be 5-10%, up to a maximum of 30% . But this will not have too much impact on the operation of the system.
How changes affect the price of Bitcoin? Optimists say the community is ready for a change in remuneration, and there will be no problem. Pessimists believe that the decline in the profitability of mining will affect the popularity of Bitcoin and its attractiveness for investors, therefore, the rate of cryptocurrency against the US dollar will fall.
The only drop in rewards in the past happened on November 28, 2012. At that time, 50% of bitcoins from the maximum possible number were already in the network: 10,500,000 cryptomonetons. Then the market was also afraid that the mine cryptocurrency would be already unprofitable, since the remuneration for the decision of the block drops by half. But this effect was compensated by the appearance of ASIC miners - specialized devices for mining cryptomonet. ASIC is an integrated circuit that is specialized for solving a specific task, in our case, only for bitcoin mining. These schemes are many times more profitable than video cards, since with more computing power, they consume much less energy. The first orders for ASIC began to take the company BFL .
The course of Bitcoin remained the same until the beginning of 2013. Then bitcoin began to become very expensive against the dollar. The main influence on the growth rate was the recognition of cryptocurrency by large organizations such as Wordpress. Also affected by the financial crisis in Cyprus and the desire of investors to find a “safe haven” for their funds. This harbor and became Bitcoin.
Nicolas Courtois , a cryptocurrency specialist, believes that it is necessary to increase the frequency of changes in the block reward. In his opinion, the reward should change not once in 210,000 blocks, but once in 336 blocks. The optimal period for changing this parameter, according to Courtois, is 2016 blocks. But 210,000 for 2016 is not divisible, which will worsen compatibility with the old scheme, if you start making changes. Therefore, it was decided to use a period of 336 blocks - this is the largest common divisor for 210,000 and 2016. In this case, changes in the amount of remuneration would occur 3 times a week.
Courtois suggested using the following mechanism for changing the size of remuneration:
1. The reward is not halved after block 420,000;
2. Instead, the award is resized every 336 blocks;
3. For blocks 0 - 209,999 the reward is 50 bitcoins;
4. For blocks 210,000 - 419,999, the reward is reduced to 25 bitcoins;
5. For blocks starting from 420,000, the reward is reduced by the following formula: for a block t = 336 * k, the reward will be r (t) = 25.0 * (625/624) 1250-k for all k> = 1250.
UPD. Yes, it happened, the remuneration for the decision of the block was halved. Experts say that now there are more enthusiasts involved in Bitcoin mining than ever before. But not everyone knows that the remuneration has fallen - some continue to work at a loss, not realizing this.
4 years are left till the next spasmodic fall, it will happen on July 6, 2020 at 23:27:51. During these four years, the market is quite able to adapt to the new realities. So far, the miners continue to work. After the changes, the Bitcoin rate did not fall. Moreover, he even grew a little.
Now Bitcoin is known to many, a number of companies accept cryptocurrency for payment (Microsoft, Uber, Canonical, Wordpress and others). Perhaps the course will continue to grow - after all, mining is becoming more and more complex and costly process. The system provides for remuneration for increasing the complexity of the decision block. I wonder if the Bitcoin ecosystem will have time to prepare for the next fall in 2020? At that time, the system will handle almost the maximum amount of cryptomonet.
Bitcoin emission is limited . The maximum possible number of cryptocurrency units in the Bitcoin system is 21 million coins. In addition, Satoshi Nakamoto during the formation of the system provided for a drop in remuneration for a decided Bitcoin block by 50% every 210 thousand blocks. About 6 blocks are created within an hour. It takes about 4 years to generate 210 thousand blocks and a fall in remuneration twice.
')
In practice, this means that if from 2012 to 2016, the miner received 25 bitcoins per block, after a fall in the amount of remuneration for him, he will receive only 12.5 bitcoins. In this case, we assume that the power of equipment for mining remains the same. Why Satoshi Nakamoto imposed this restriction?
The main reason for introducing a restriction of remuneration is the need to control inflation. Here you can use the example from the sphere of traditional finance: the central banks of countries, if necessary, can print as much money as they want. If the issue is too high, inflation occurs, the value of the currency drops.
When will the reward drop?
In a day (at the time of publication of the article). View detailed information about the status of the Bitcoin system here .
Current system status
- Total Bitcoin in the system: 15,745,300
- Maximum possible number of Bitcoin in the system: 21,000,000
- Bitcoin Production Percentage: 74.98%
- How much is left to mine: 5,254,700
- Rate Bitcoin / USD: $ 642.25
- Volume of the Bitcoin market in USD: $ 10,112,418,925.00
- Bitcoin generated per day: 3,600
- Average block decision time: 10 minutes
- How many blocks are solved per day: 144
- Difficulty: 213,398,925,331
- Hashrate: 1.47 Eksaheshey per second
Some representatives of the cryptocurrency market think that the day after tomorrow, due to the output of a number of miners from the system, the total mining capacity will fall. In particular, Chandler Guo , one of the most well-known owners of mining farms from China, thinks so. This may adversely affect the verification of transactions in the network - some will be impossible to track. This situation will lead to a drop in confidence in digital currency.
C this opinion does not agree Bobby Lee, CEO Bitcoin exchange BTCC. He argues that the drop in capacity can be 5-10%, up to a maximum of 30% . But this will not have too much impact on the operation of the system.
How changes affect the price of Bitcoin? Optimists say the community is ready for a change in remuneration, and there will be no problem. Pessimists believe that the decline in the profitability of mining will affect the popularity of Bitcoin and its attractiveness for investors, therefore, the rate of cryptocurrency against the US dollar will fall.
The only drop in rewards in the past happened on November 28, 2012. At that time, 50% of bitcoins from the maximum possible number were already in the network: 10,500,000 cryptomonetons. Then the market was also afraid that the mine cryptocurrency would be already unprofitable, since the remuneration for the decision of the block drops by half. But this effect was compensated by the appearance of ASIC miners - specialized devices for mining cryptomonet. ASIC is an integrated circuit that is specialized for solving a specific task, in our case, only for bitcoin mining. These schemes are many times more profitable than video cards, since with more computing power, they consume much less energy. The first orders for ASIC began to take the company BFL .
The course of Bitcoin remained the same until the beginning of 2013. Then bitcoin began to become very expensive against the dollar. The main influence on the growth rate was the recognition of cryptocurrency by large organizations such as Wordpress. Also affected by the financial crisis in Cyprus and the desire of investors to find a “safe haven” for their funds. This harbor and became Bitcoin.
How can you solve the problem of an abrupt drop in the value of remuneration for a solved block?
Nicolas Courtois , a cryptocurrency specialist, believes that it is necessary to increase the frequency of changes in the block reward. In his opinion, the reward should change not once in 210,000 blocks, but once in 336 blocks. The optimal period for changing this parameter, according to Courtois, is 2016 blocks. But 210,000 for 2016 is not divisible, which will worsen compatibility with the old scheme, if you start making changes. Therefore, it was decided to use a period of 336 blocks - this is the largest common divisor for 210,000 and 2016. In this case, changes in the amount of remuneration would occur 3 times a week.
Courtois suggested using the following mechanism for changing the size of remuneration:
1. The reward is not halved after block 420,000;
2. Instead, the award is resized every 336 blocks;
3. For blocks 0 - 209,999 the reward is 50 bitcoins;
4. For blocks 210,000 - 419,999, the reward is reduced to 25 bitcoins;
5. For blocks starting from 420,000, the reward is reduced by the following formula: for a block t = 336 * k, the reward will be r (t) = 25.0 * (625/624) 1250-k for all k> = 1250.
UPD. Yes, it happened, the remuneration for the decision of the block was halved. Experts say that now there are more enthusiasts involved in Bitcoin mining than ever before. But not everyone knows that the remuneration has fallen - some continue to work at a loss, not realizing this.
4 years are left till the next spasmodic fall, it will happen on July 6, 2020 at 23:27:51. During these four years, the market is quite able to adapt to the new realities. So far, the miners continue to work. After the changes, the Bitcoin rate did not fall. Moreover, he even grew a little.
Now Bitcoin is known to many, a number of companies accept cryptocurrency for payment (Microsoft, Uber, Canonical, Wordpress and others). Perhaps the course will continue to grow - after all, mining is becoming more and more complex and costly process. The system provides for remuneration for increasing the complexity of the decision block. I wonder if the Bitcoin ecosystem will have time to prepare for the next fall in 2020? At that time, the system will handle almost the maximum amount of cryptomonet.
Source: https://habr.com/ru/post/395811/
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