Steemit Crypto Academy|Season 3 Week 8| Blockchain Rewards- Homework Post by @giftye
INTRODUCTION
Good day professor,I've gone through the course and I find the topic very fascinating. I haven't been online for some while now,but I made out time to research on the topic of discussion that is "Blockchain Reward". Here are my findings so far.
1. IN YOUR OWN WORDS, EXPLAIN MINING AND BLOCK REWARD
For this particular task,I'm going to be defining mining with reference to the first and most popular cryptocurrency there is, Bitcoin
.
The process of entering new bitcoins into circulation is what is referred to as bitcoin mining .
Whenever we talk about mining,the first thing that comes to mind is extraction of coal , minerals or ores,etc from the earth. So mining I geographical terms can be classified as the the discovery and extraction of minerals which were hidden under the earth,and these minerals are usually gotten by excavation
.
So,in the case of cryptocurrencies,mining also requires extraction (production of new blocks)
and excavation. Bitcoin mining is performed by solving highly complex computational mathematical problems using sophisticated computers(this is likened to excavation).
Mining cryptocurrency is quite costly,it demands so much effort and also rewards in an irregular and an unpredictable way
.
- Miners are rewarded with bitcoin for the completion of blocks of transactions that have been verified and added to the blockchain.
- Rewards for mining are given to the miner who was able to provide a solution to a complex hashing puzzle before others. The probability of being the one to provide the solution is proportional to the portion of the network's total mining power.
- Mining enables miners to earn cryptocurrency without staking money for it.
- To set up a mining platform , you'll need either an application specific integrated circuit (ASIC) or a graphics processing Unit(GPU).
2.WHAT DO YOU UNDERSTAND BY THE BITCOIN HALVING?
When bitcoin was first released,it's miners had the privilege of earning 50 bitcoins(BTC) per block. Bitcoin is mined at a particular pace/rate,after every 210,000 blocks mined, or in a period of four years this pace is halved untill all 21 million bitcoins are mined completely
.
Bitcoin was introduced in 2008,and the first HALVING took place in 2012, slashing the reward for mining from 50 BTC to 25 BTC . In 2016,same cycle repeated,cutting down the rewards again to 12.5 BTC per block mined,then in May 11 2020,only 6.25 BTC is earned by mining a block
.
3.WHAT ARE THE EFFECTS OF HALVING ON MINERS?
Miners should make plans for the halving of Bitcoin because it brings about an inevitable drop in revenue. The HALVING has a way of reducing supply and promoting scarcity,which in turn pushes the price of bitcoin higher.
The first halving in Nov 28,2012 caused a price increase from $12 to about $1,207,this is definitely good for investors and miners. Same kind of increase took place during it's halving seasons.
IN GENERAL,MINERS ARE AFFECTED THUS:
Regardless of all these changes,the incentives for miners still remains, because the value of the coin is increased in the process.
SCREENSHOT OF BITCOIN'S CURRENT BLOCK HEIGHT FROM COINMARKET CAP
HOW MANY MORE BLOCKS BEFORE THE NEXT HALVING
CALCULATION
It is understood that Bitcoin halves after every 210,000 blocks have been mined. The next halving will make it the 4th time. Considering these informations,we have:
Block height for the next halving= 210,000×4 =840,000
SCREENSHOT OF THE CURRENT BLOCK HEIGHT ON THE STEEM BLOCKCHAIN FROM STEEM SCAN
AMOUNT OF BLOCKS BEFORE THE NEXT 0.01% HALVING
.
a.HOW MANY SATOSHIS WOULD YOU HAVE?
SCREENSHOT OF THE CURRENT VALUE OF BTC FROM COINMARKET CAP
b. WHAT IS THE VALUE OF SATOSHI FOR THAT DAY?
SCREENSHOT OF CURRENT VALUE OF SATOSHI FROM COINMARKET CAP
a.HOW MANY JAGERS WOULD YOU HAVE?
SCREENSHOT OF THE CURRENT VALUE OF BNB FROM COINMARKET CAP
b. WHAT IS THE VALUE OF JAGER FOR THAT DAY?
- The reward they get is halved .
- Available supply is lowered.
- Increased n demand.
- Price increase takes place.
4.WHAT IS THE CURRENT BLOCK HEIGHT ON THE BITCOIN BLOCKCHAIN? HOW MANY BLOCKS BEFORE THE NEXT HALVING?
A blockchain database is encrypted ,and it holds informations of transactions in structures of data referred to as blocks.
So,the block height shows the location of a completed transaction which is measured by the amount of completed blocks that precedes it. It also indicates a block's time in existence and it's current size
.
Bitcoin halving is very significant because it depicts a drop in the supply of bitcoin which dwindles finitely. Bitcoin's total maximum supply is 21 million. There were about 18,715,050 bitcoins already in circulation as at May 2021,which leaves 2,284,950 BTC more to be released through mining rewards
.
Current block height= 696504 blocks
Number of blocks until the next halving= 840,000 - 696504 = 143496 blocks
5.DO YOU THING STEEM'S INFLATION RATE REDUCTION CAN AFFECT OTHER COINS? WHY?
As concerning steem inflation reduction,new tokens are generated at a rate of 9.5% per year which started from December 2016,and at every 250,000 blocks created it decreases at a rate of 0.01% or about 0.5% per year.
This decrease in inflation will continue at this rate untill it reaches 0.95% in approximately 20.5years
.
Since the rate of inflation keeps going down,it can be thought of as a deflationary inflation. Steem makes use of a constant decrease in the rate of inflation which has no effect on the amount of activities on the platform.
Generally speaking,if it's inflation reduction is not tied to the activities on it's own platform,then I don't think it can affect other coins.
6.WHAT IS THE CURRENT BLOCK HEIGHT ON THE STEEM BLOCKCHAIN? HOW MANY MORE BLOCKS BEFORE THE NEXT 0.01% REDUCTION?
Inflation reduction rate of steem is 0.01% for every 250,000 blocks
Current block height = 56,498,216.
Number of reduction so far = 56,498,216/250,000 = 225.992864 = 226(rounded off)
Block height for next reduction = 226×250,000 = 56,500,000
Number of blocks untill next reduction = 56,500,000- 56,498,216 = 1,784 blocks.
CONTINUATION OF LAST WEEK'S WORK
. 1. WHAT IS THE CURRENT VALUE OF BTC ON THE DAY YOU ARE PERFORMING THIS TASK? IF YOU MADE A PURCHASE OF $2,500 THEN,
1 Satoshi= 0.00000001 BTC
1 BTC = $44,859.20
A purchase of $2,500 will give you = $2,500/$44,859.20 = 0.0557299.......= 0.0557 BTC(3s.f).
Converting to Satoshi= 0.0557 BTC/0.00000001 = 5,570,000.000 SAT (3s.f)
1 BTC = $44,859.20
1 Satoshi = 1/100000000 × 1 BTC
Therefore,1 Satoshi = 1/100000000×44,859.20
1 Satoshi = $0.000449(3s.f)
2.WHAT IS THE CURRENT VALUE OF BNB ON THE DAY YOU ARE PERFORMING THIS TASK? IF YOU MADE A PURCHASE OF $30 THEN,
1 Jager = 0.00000001 BNB
1 BNB = $403.23
A purchase of $30 will give you = $30/403.23 = 0.074399....= 0.0744 BNB (3s.f).
Converting to Jager = 0.0744/0.00000001 = 7,440,000.000Jagers(3s.f).
1 BNB = $403.23
1 Jager= 1/100000000 × 1 BNB
Therefore, 1 Jager= 1/100000000 ×403.23
1 Jager= $0.00000403
NOTE
Screenshot is inconsistent with some areas of the calculations because of the continuous change in the price of the coins during the tabulation of this homework,thank you @awesononso
Hello @giftye,
Thank you for taking interest in this class. Your grades are as follows:
Feedback and Suggestions
Good job on the calculations.
There are some points still missing in the work.
Thanks again as we anticipate your participation in the next class.
Thank you professor,will put in more effort next time