Steemit Crypto Academy [Beginners' Level] | Season 3 Week 8 | Blockchain Rewards
Hi steemians,
Glad to be part of another interesting class by @awesononso on "Blockchain Rewards". Below is my homework task.
1). IN YOUR OWN WORDS, EXPLAIN MINING AND BLOCK REWARD.
MINING
Mining in crypto technology is a process of harvesting cryptocurrency as a reward after the successful completion of solving complex cryptographic puzzles. Mining involves individuals called miners, who are well skilled to use sophisticated hardwares in solving mathematical problems, and the first miner to solve the problem gets rewarded with for their proof of work.
Mining is a process in which miners verify transactions of different forms of cryptocurrency and the verified transactions are added to the digital ledger of a blockchain. Mining requires lots of energy, quality time and use of expensive hardwares in solving the complex puzzle. The process of verifying and adding these transactions to the digital ledger is done by persons known as Miners. Before a block is successfully added to the ledger a miner must first show his Proof-of-Work by finding the right Hash for the new blocks in order for it to be linked properly into the blockchain.
BLOCK REWARD
Block reward is simply the reward given to miners for being the first to solve a complex mathematical puzzle and successful mine a block to verify transactions. The rewards given to the miners are in form of new bitcoin, otherwise known as incentives for a job well done(for mining a block).
In a nutshell, block reward refers to the amount of bitcoins a miner is being rewarded with after successfully mining a new block of cryptocurrency. The amount of block reward is being halved after every 210,000 blocks is created in the blockchain or roughly at the end of every four years.
WHAT DO YOU UNDERSTAND BY BITCOIN HALVING?
Bitcoin halving is a special event initiated by bitcoin protocol, which involves cutting the reward for mining bitcoin transactions into two(that is halves), after the halving of Bitcoin the amount of bitcoins in circulation in the ecosystem becomes halved too to boost the value of bitcoin in the market, as an excess amount of bitcoin in circulation will lead to a decrease in the price value of bitcoin and hence cause inflation.
Bitcoin Halving occurs once in every in every four years and also occurs after the creation of 210,000 blocks in the blockchain. Since the mining of Bitcoin, Bitcoin halving has occured three times and last bitcoin halving happened on 11th May 2020, at about 3pm EST, after the halving of the Bitcoin it resulted to a block reward of 6.25 bitcoin.
Bitcoin halving is one of the most yearned events for crypto investors and traders, as it helps reduce inflation among cryptocurrencies.
WHAT ARE THE EFFECTS OF BITCOIN HALVING ON MINERS?
Some effect of Halving on miners includes;
•Halving help reduce inflation rate of cryptocurrency through which the miners benefit from this.
•Miners are exposed new experience about cryptocurrency, as they may learn new techniques to enable them solve puzzles faster and mine more coins.
• Another effect of Bitcoin halving is that, as halving occurs the inflation rate of Bitcoin reduces leading to a decrease in supply of Bitcoin, and it's demand increases leading to a hike in price value of BTC. For example, in retrospect to 2016 when Bitcoin halving occured, it's price was about $650 but in the forthcoming months, the price hiked to $20000. This shows that, the halving of BTC affects it's price value in the market.
•Also halving can reduce the mora or zeal of miners to continue mining, because when halving occurs the reward of their efforts in mining is halved also, which is to say more effort equals less reward.
WHAT IS THE CURRENT HEIGHT ON THE BITCOIN BLOCKCHAIN? HOW MANY MORE BLOCKS BEFORE THE NEXT HALVING?(Screenshots and Full working)
From the screenshot above, the current block height of bitcoin blockchain is 696383, as at the time of writing this post.
Recall that, Halving occurs at every 210,000 block, and next bitcoin halving will occur in four years time, so we have;
= 210,000 × 4 = 840,000
Current block height = 696383
Therefore, 840,000 - 696383 = 143617
Therefore, we have 143617 blocks remaining before the next halving to happen, which is likely to come up in 2024.
DO YOU THINK STEEM'S INFLATION RATE REDUCTION CAN AFFECT OTHER COINS? WHY?
From my point of view, Steem's inflation rate reduction can't affect other coins in crypto market. This is because STEEM is an Altcoin which is not a major coin like Bitcoin, rather the inflation rate of STEEM is dependent on the inflation rate of Bitcoin. The Bitcoin is the king of coins and greatly influences the inflation rate of STEEM and other coins.
For instance, for the past 3months bitcoin inflation rate was reduced and it greatly affected STEEM's inflation rate, and of recent bitcoin inflation rate began to increase and so STEEM inflation rate is also gradually increasing. The reduction in STEEM inflation rate is almost considered insignificant compared to the inflation rate of other cryptocurrencies, as STEEM inflation rate decreases by 0.01% on every 250,000blocks mined. So STEEM inflation rate can't affect other coins, rather it affects the holders of STEEM.
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, The current block height on STEEM is 56,474,863 as at the time of writing this post.
Steem inflation rate reduces by 0.01% on every 250,000 blocks.
Total number of reduction= 56,474,863 / 250,000 = 225.899452
approximately 226(3 s.f)
•Calculating the block height for next reduction;
226×250,000= 56,500,000, is the number that must be mined before the next reduction.
Therefore, number of blocks remaining until next reduction = 56,500,000 - 56,474,863
=25,137blocks.
So 25,137 blocks must be mined before the next 0.01% reduction to occur.
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,
a.) how many Satoshi’s 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).
From the screenshot above, the current value of BTC on the day I performed this task is $45,843.32
So, if I make a purchase of $2500, then I would have;
= $2500 / $45,843.32
=0.0583521538
•Therefore, $ 2,500 equals 0.0583521538 BTC
A). HOW MANY SATOSHI WOULD YOU HAVE?
Recall from previous class, 1satoshi = 0.00000001 BTC
So Satoshi = 0.0583521538BTC
now divide: 0.0583521538 / 0.00000001
= 0.05453360
Approximately 0.0545(3.s.f)
Therefore, I would have 0.0545 Satoshi
B.) what is the value of a satoshi for that day?
(Show full working and correct to 3 s.f)
(1 satoshi = 0.00000001).
From the screenshot above, the current value of BTC when performing this task is $45,843.32
1satoshi = 0.00000001
Therefore, value of Satoshi = $45,843.32 × 0.00000001 = $0.0004584332
Approximately $0.000458(3.s.f)
2. WHAT IS THE VALUE OF BNB ON THE DAY YOU ARE PERFORMING THIS TASK? IF YOU MADE A PURCHASE OF $30 THEN.
From the screenshot above, the value of BNB on the day I performed this task is $396.46.
If I made a purchase of $30, I would have;
•Solution:
1 BNB = $396.46
Purchase of BNB = $30,
Divide purchased BNB from current value of BNB
= 30 / 396.46
=$0.0756696766 BNB
A.) HOW MANY JAGERS WOULD YOU HAVE?
1 Jager = 0.00000001 BNB
BNB = 0.0756696766
Therefore: 0.0756696766 / 0.00000001
= 7566967.66 Jagers
I would have Approximately 757 Jagers(3.s.f)
B.) WHAT IS THE VALUE OF A JAGER FOR THAT DAY?
1 Jager = 0.00000001BNB
1BNB= $396.46
So 1jager = 0.00000001 × 396.46
=$0.0000039646
Approximately $0.00000396Jager(3.s.f)
CONCLUSION
Mining is a process in which new block are mined, verified and transactions of the new block is added to the blockchain with its unique Hash. This process of mining is done by a miner, who is well skilled and requires the use of sophiscated hardwares and Bitcoin applications to achieve this.
Mining is difficult, time consuming and expensive, but the effort of the miners are rewarded with incentives. Block reward us the rewarded distributed to miners who successfully adds verified transaction to the digital ledger (blockchain) .
Thanks professor @awesononso for always bringing interesting ans knowledgeable lessons to us. Warm regards and Thanks for reading through.