Crypto Academy /Season 3 / Week 8/ - Homework Post for Professor [@awesononso] || Mining and Block reward
(1) In your own words, explain mining and block reward.
What is Crypto Mining
Mining of crypto refers to the pocess of increasing the total circulating supply of a coin. Depending on the consensus mechanism that is being employed by the protocol, mining may or may not require special computers for their mining.
Take for instance Bitcoin that operates a Proof of Work algorithm. For mining to take place successfully, different miners all around the world have to validate a couple of transactions all in one block and then the block is added to the chain. What these miners inspect majorly are cases of double spending. Once they have verified these transactions, they then scrabble for one hexadecimal that will be used to validate the block. Mining in some protocol is an easy way of getting a coin without having to purchase it.
Block Reward
Of course no one does what he doesn't benefit from directly or indirectly. Block reward is why Crypto miners work day and night to validate and add blocks to the blockchain and thereby keeping the protocol safe from cyber attacks. Block Reward simply refer to the incentive given to miners or block Validators for the steady work which they do. This incentive multivates the the miners steadily since they are aware that a compensation and a good one at that waiting for them. On the bitcoin protocol, when a miner first discoves the hash for the block, he is rewarded with 6.25 BTC which is as of today equal to $278,750.
(2) What do you understand by the Bitcoin Halving?
Bitcoin halving refers to the reduction in the creation of new new bitcoins. Bitcoin halving usually occurs after every 210,000 blocks has been mined. This take a total time of 4 years and thus halving will continue until Bitcoin gets to its proposed 21 million total supply.
The first halving of bitcoin occured in 2012. It was then slashed from 50 BTC reward per block to 25 BTC reward per block. In 2016, the block reward was also cut into 2 making the reward to then become 12.5 BTC per block. In mid 2020, the reward was halved again to now be 6.25 BTC per block. The next halving has already been predicted to be sometime in mid 2024 and it will then leave the reward to become 3.125 BTC per block.
Effect of the Halving
Each time Bitcoin gets close to its halving there is usually some sort of turbulence in the crypto world. For Bitcoin itself, it does experiences a surge in its trading volume. People have now capitalized on the knowledge of bitcoin halving to invest in Bitcoin few months to its halving and after its halving to make some profits.
(3) What are the effects of the Halving on miners?
The having process is guaranteed to reduce the amount of Bitcoin miners.This is because the more the halving, the lesser the the amount of Bitcoin to be gotten as reward and thus. By theory, it is expected that the value of Bitcoin will continue increasing alongside the halving untill it is totally mined out. If this is the case, then miners would still continue their struggle but if the value of Bitcoin does not move up whenever it is halved, then more miners will be discourages because at a point the mining cost will become greater than the mining reward.
(4) What is the current block height on the Bitcoin blockchain? How many more blocks before the next halving?(Screenshots and Full working)
The block height of Bitcoin at the time of writing is
696,441
Since we want to find when the 4th halving will occur, then
210,000 × 4 = 840,000 blocks.
This simply means that at the 840,000th block of Bitcoin, it's 4th halving will occur. But we wish to find out how many blocks remaining before the 4th halving so;
840,000-696,441
= 145,559 blocks
(5) Do you think Steem’s inflation rate reduction can affect other coins? Why?
Steems inflation rate reduction cannot be able to influence other coins in anyway. This solely lies on the fact that the steem market dominance I very small and almost negligible. It's reduction rate wouldn't do a thing unlike Bitcoin who has a market dominance of 43.68% and could easy influence other currencies.
Steem market dominance
Bitcoin market dominance
(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)
The steem block height at the time of writing is
56,485,144 blocks.
For every 250,000 blocks produced, the block reward is decreased by 0.01%
Since the current block height is 56,485,114 then the reduction rate in the reward so far is
56,485,144÷250,000 = 225.94
So, taking the next whole number after the reduction , I have
225.94+1 = 226.94
Next,I multiply it by the standard blocks per reduction, then I have;
*226.94 × 250,000 = 56,735,000 blocks.
This block figure just above indicates the block height to be attained by the next block reward reduction. So, to find the amount of blocks remaining to get to the next reduction, the we have
56,735,000 - 56,485,114
= 249,886 blocks
So obviously, seeing the number of blocks remaining to get to the next reduction, it shows that there has just been a reduction some blocks ago.
(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,(1 satoshi = 0.00000001 BTC)(Show full working and correct to 3 s.f)
The price of Bitcoin at the time of writing is
$44,843.44
a.) how many satoshis would you have?
So, in an investment of $30 I would have
67,000 satoshi
b.) what is the value of a satoshi for that day?
The value of a satoshi is
$0.000448 on this day.
(8) 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)(Show full working and correct to 3 s.f)
The price of BNB at the time of writing is
$398.25
a.) how many Jagers would you have?
In an investment of $30, I would have
7,540,000 Jagers
b.) what is the value of a Jager for that day?
The value of Jager on this day is
$0.00000398
Regards to professor @awesononso