Crypto Academy Season Three Week Eight: Homework Post for @awesononso

Greetings steemians, in this homework task I would be talking on blockchain rewards, lets get started.

Question 1
In your own words, explain mining and block reward.

Mining

Mining in normal sense will mean digging deep down into the earth to find mineral elements like Gold, Diamond and bauxite with the use of sophisticated tools like excavators and the rest.

However in cryptocurrencies terms, Mining is the use of sophisticated tools to solve complex cryptographic or mathematical equations. These sophisticated tools range from mining tools like Ant Miners to more powerful computers. When mining is successful, it creates and brings new coins into circulation. Mining is carried out my miners on the blockchain.

The main reason for mining is to validate transactions on the blockchain and also prevent duplication of transactions between users. When miners are able to solve these complex cryptographic equations, they are rewarded with what we call the block reward. This brings us to the next question Block Reward

Block Reward
This is the way of appreciation of the efforts of miners. Block rewards are the coins miners earn when they successfully complete a mining operation. The block rewards are the new coins that are now in circulation after a mining operation. Block rewards motivate miners to keep on with their good works.

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Question 2
What do you understand by the Bitcoin Halving?

Halving in normal terms refers to the diving of an entity by 2 . Hence bitcoin halving the division of the block reward of miners by 2. Having in bitcoin occurs almost every 4 years or after 210,000 bitcoin blocks have been mined.

The first halving started after satoshi successfully mined the first bitcoin blocks in 2009, after he received a block reward of 50 btc. The halving then started to take place in the subsequent block rewards where the next block reward became 12.5 btc and thereafter 6.25 btc on 11th May, 2018. Hence the 4th halving of bitcoin, the block reward will be 3.125 btc and will continue in that trend until all the bitcoins are mined.

Halving plays a very crucial role in stabilizing the inflation rate of bitcoin. It has also seem to have a positive impact on the price of bitcoin. Over the years, after every halving Bitcoin prices seem to skyrocket with bitcoin prices surpassing $60k.

I think the reason for this price increases is that bitcoin is getting scarce as halving occurs. And since bitcoin has a limited supply of 21 million coins, investors tend to grab the remaining coins before the coin supply gets depleted. I believe this account for the price increases.

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Question 3
What are the effects of the Halving on miners?

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• When bitcoin halving occurs, the huge amounts of energy used by miners for mining operations are reduced

• Mining becomes less profitable for miners as block rewards become small, and after deducting all necessary costs, miners would be left with almost nothing.

• Some miners stop mining whiles some loose interest in mining because there is huge competition for meager block rewards, where their chances or probability of even earning the rewards are very low. Hence some miners quit in these situations.

• As halving causes some miners to quit, the total energy used for mining operations would be reduced drastically. This energy can be preserved and used for other useful purposes.

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Question 4
What is the current block height on the Bitcoin blockchain? How many more blocks before the next halving?(Screenshots and Full working)

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From the screenshot, the latest block height is 696,884. Halving occurs when 210,000 blocks are mined. Also the next halving would be the fourth, hence the next block for halving would be;

Next block Height for halving = Number of blocks needed for halving x 4
= 210,000 x 4
= 840,000 blocks

Therefore, the number of blocks needed for the next halving = Next block height of halving - Current block height
= 840,000 - 696,884
= 143,116 blocks

Hence the number of blacks needed for the next halving is 143,116 blocks

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Question 5
Do you think Steem’s inflation rate reduction can affect other coins? Why?

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I strongly disagree. Been in the cryptocurrency market for about three years now, I have noticed that for a coin to be able to control the price or value of other coins it must have dominance over the other currencies n terms of market volume, market cap and size.

The coin that I have seen over this years to possess this dominance and control prices of other coins is Bitcoin. It is ranked #1 on almost all cryptocurrency exchanges I know.
With a market cap of $885,093,044,416 and a current volume of $41,215,326,181.95, it has the capability of controlling the prices of other cryptocurrencies.

Considering Steem, it lacks this capabilities as its market rank is #181 with very low market cap, volume and market dominance compared to bitcoin, hence it cannot influence the prices of other cryptocurrencies.

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Question 6
What is the current block height on the Steem blockchain? How many more blocks before the next 0.01% reduction?(Screenshots and Full working)

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From the screenshot, the current block height of the steem explorer is 56,563,326. Steem inflation rates also depreciate every 250,000 blocks. Hence we calculate the reduction that has already occurred. Which is
= current block number/250,000
=56,563,326/ 250,000
= 226.253304
= 226
Hence the reduction that has already occurred is 266

The next reduction is the 227th reduction. Calculating the number of blocks needed for its occurrence
= 227 x 250,000
= 56,750,000 blocks

Number of blocks left for the next 0.01 reduction
= 56,750,000 - 56, 563,326
= 186,674 blocks

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Question 7
What is the current value of BTC on the day you are performing this task? If you made a purchase of $2,500 then,
a.) how many satoshis would you have?
b.) what is the value of a satoshi for that day?
(Show full working and correct to 3 s.f)
(1 satoshi = 0.00000001 BTC)

Bitcoin

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The current price of bitcoin is $49,364.53

Solution

$2500 into BTC will be
= 2500/ 1 BTC
= 2500/ 49,364.53
= 0.05064365
= 0.0506 BTC (3 sf)

i. Number Of Satoshis= 0.0506/ 1 satoshi
= 0.0506/ 0.00000001 BTC
= 5,060,000 satoshis

ii. Value of 1 satoshi = 1 satoshi x Price of BTC
= 0.00000001 x 49,364.53
= 0.00049365
= 0.000494 (3 sf)

The value of 1 satoshi= $0.000494

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Question 8
What is the current value of BNB on the day you are performing this task? If you made a purchase of $30 then,
a.) how many Jagers would you have?
b.) what is the value of a Jager for that day?
(Show full working and correct to 3 s.f)
(1 jager = 0.00000001 BNB)

BNB

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The current price of BNB is $454.58

####Solution

$30 in BNB equivalent
= 30/454.58
= 0.06599498
= 0.0659 BNB (3 sf)

i. Number of jaggers= 0.0659/ 1 Jager
= 0.0659/0.00000001
= 6,590,000 Jagers

ii Value of 1 jagger= 1 Jager x BNB price
= 0.00000001 x 454.58
= 0.00000455
= 0.00000455 (3 sf)
The value of one Jager is $0.00000455

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Conclusion

In conclusion, I would like to urge crypto investors to learn more about mining and also take responsibilities in validation future transactions to also stand chances of winning block rewards. My regards to professor @ awesononso for this wonderful lecture, I really enjoyed it.

We hope to learn more from you. My greetings to all the professors and members of this platform.
Thank you for your time.