Crypto Academy / Season 3 / Week 8 – Homework Post for [professor @awesononso] Blockchain Rewards
Am gladdened once again for yet another opportunity of this wonderful edition by the cryptoacademy. From the lecture offered by Professor @awesononso, reading through this lecture series have given me a better insight on Blockchain Rewards. To this, I will be writing based on the task given by the Professor.
In your own words, explain mining and block reward
In this context, mining has a different definition as to the normal day to day terminology which identifies it as extraction of raw natural resources from the subsurface.
Mining in crypto currency world has a different understanding which deals with getting new coins, it is not about just getting the coins, but when coins are created on blockchains, these coins are being mined on this blockchain which are digital ledgers or database where the daily transactions of the coins are stored and very open to the public’s view.
Miners adds these authenticated daily transaction details of users to the ledger (blockchain) by verifying it to know the transaction that is free of double spending before forming it block.
Before this blocks are added to the ledger by the miners, the right hash which matches with the new block created is discovered via Proof-of-Work using the ASIC app which helps them to discover the right hash of the new block.
The miners after a lot of struggling trying to add new blocks to the ledger cannot just go empty handed, and so this brings to what is known as Blockchain Rewards
Blockchain Rewards
After the long suffering of miners in trying to match the right hash to the new block created and a successful adding of the block to the ledger, they get rewarded with a prize via the blockchain. This prize of compensation given to miners is what is known as Blockchain rewards.
What do you understand by the Bitcoin Halving?
Bitcoin halving is an occurrence that aims at reducing the inflation rate of Bitcoin by dividing the mined blocks of Bitcoin into two or half as the word “halving” implies thus leading to a decrease in the supply and circulation of Bitcoin.
Bitcoin Halving takes place in every 210,000 blocks being mined successfully. After the first halving occurrence of Bitcoin in 2012, the block rewards tend to reduce to 25 BTC and after the second halving in 2016, there was also a reduction in the mined blocks from 25BTC to 12BTC, also after the third halving event in 2020, there was another reduction in the mined blocks from 12BTC to 6.5BTC and this reduction or halving event has led to a tremendous rise in the value of Bitcoin.
What are the effects of the Halving on miners?
The effect of halving on Bitcoin is an important one as it helps to reduce the rate of increase of Bitcoin in the crypto world and this reduction tends to increase the value of Bitcoin. In other words the halving of Bitcoin poses a positive effect as the value of Bitcoin increases, the price of Bitcoin as well increases.
Although the effect of halving might be favorable to small scale investors but the reverse case is applicable to miners because by time they mine larger quantities of blocks and there is an occurrence of a halving event, their mined blocks tends to reduce thereby reducing the larger rewards that they would have gotten or acquired.
Remember, when there is halving, the supply of the Bitcoin will reduce thereby leading to scarcity of Bitcoin thus a high demand for Bitcoin which will lead to a boom in price of Bitcoin. So therefore, as the price increases, the tendency of miners to access Bitcoin becomes difficult as the purchasing power increases.
What is the current block height on the Bitcoin blockchain? How many more blocks before the next halving?(Screenshots and Full working)
From the above screenshot, the height of Bitcoin block is 696762 blocks.
From the study, BTC has undergone halving for three times now, so the next will be its fourth halving, thus halving occurs after every 210, 000 blocks are mined.
Therefore, the total number of blocks needed to be mined for the next halving (fourth halving) = 210,000 x 4 = 840,000 blocks
The present block height which is 696762 blocks
Therefore, number of blocks remaining for the next halving to occur = 840,000 – 696,762 = 143,238 blocks
Therefore, for the next halving to occur, 143,238 blocks remains to be mined.
Do you think Steem’s inflation rate reduction can affect other coins? Why?
I don’t think the inflation rate of steem reduction can affect other coins because the decline in its inflation rate is irrelevant when compared to other cryptocurrencies as it is not paired with other coins, thus steem has a low market capitalization which shows that it is not dominance in the market as compared to other paired coins with higher market capitalization. So, as such will not have impact on other coins.
What is the current block height on the Steem blockchain? How many more blocks before the next 0.01% reduction?(Screenshots and Full working)
From the screenshot above, steem block height as at the time of this post is 56,543,885 blocks
From the study, we know that at every 250,000 blocks, the inflation rate of steem declines by 0.01%.
If the current block height of steem = 56,543,885 blocks
Therefore, the number of current reduction = 56,543,885/250,000 = 226.17554 = 226
Therefore, the block height for the next reduction = 227 x 250,000 = 56,750,000
Therefore, number of blocks that must be mined before the next 0.01% reduction is 56,750,000 – 56,543,885 = 206,115 blocks.
Continuation of last week’s work:
What is the current value of BTC on the day you are performing this task? If you made a purchase of $2,500 then,
I BTC at the day of this post is $48,861.59
If I make a purchase of $2500; then I would have…
Let’s take C to be the number of BTC
If 1 BTC = $48,861.59
Therefore, C BTC = $2500 (cross multiplying)
C BTC x $48,861.59 = 1 BTC x $2500
C BTC = (1 BTC x $2500)/$48,861.59
C BTC = 0.0511649334 BTC = 0.0512 BTC (3 s. f)
how many satoshis would you have?
Let M represent the number of Satoshi
If 1 Satoshi = 0.00000001BTC
M Satoshi = 0.0512 BTC (cross multiply)
M Satoshi x 0.00000001 BTC = 1 Satoshi x 0.0512 BTC
M Satoshi = (1 Satoshi x 0.0512 BTC)/0.00000001 BTC
M Satoshi = 5,120,000 Satoshi
Therefore, if I purchase $2500 worth BTC, I will have 5,120,000 Satoshi
what is the value of a satoshi for that day?
According to the current market value of a (1) Bitcoin, with reference to coinmarketcap, the value of 1 Satoshi will be calculated thus:
If a (1) Satoshi = 0.00000001BTC (a fraction of BTC)
1 Satoshi in the USD value = 0.00000001 x the current price of BTC
Therefore 1 Satoshi will now be = 0.00000001 x $48,861.59
1 Satoshi = $0.0004886159
Thus, the USD value of 1 Satoshi as to the current value is $0.000489 (3 s. f)
What is the current value of BNB on the day you are performing this task? If you made a purchase of $30 then,
I BNB at the day of this post is $448.12
If I make a purchase of $30; then I would have…
Let’s take L to be the number of BNB
If 1 BNB = $448.12
Therefore, L BNB = $30 (cross multiplying)
L BNB x $448.12 = 1 BNB x $30
L BNB = (1 BNB x $30)/$448.12
L BNB = 0.0669463537 BNB = 0.0670 BNB (3 s. f)
how many Jagers would you have?
Let K represent the number of Jagers
If 1 Jager = 0.00000001BNB
K Jager = 0.0670 BNB (cross multiply)
K Jager x 0.00000001 BNB = 1 Jager x 0.0670 BNB
K Jager = (1 Jager x 0.0670 BNB)/0.00000001 BNB
K Jager = 6700000 Jager
Therefore, if I purchase $30 worth BNB, I will have 6700000 Jager
what is the value of a Jager for that day?
According to the current market value of a (1) BNB, with reference to coinmarketcap, the value of 1 Jager will be calculated thus:
If a (1) Jager = 0.00000001BNB (a fraction of BNB)
1 Jager in the USD value = 0.00000001 x the current price of BNB
Therefore 1 Jager will now be = 0.00000001 x $448.12
1 Jager = $0.0000044812
Thus, the USD value of 1 Jager as to the current value is $0.00000448 (3 s. f)
Conclusion
It was quite a wonderful and interesting lecture on Blockchain rewards. Thanks Prof. @awesononso for these series of lecture, indeed I have learnt a lot.