Crypto Academy / Season 3 / Week 8 - Homework Post For Professor @awesononso

IN YOUR OWN WORDS, EXPLAIN MINING AND BLOCK REWARD

In a blockchain, it is important to note that all information is stored in blocks. The information stored in these blocks are arranged and validated by a number of miners that are located around the world. Mining has to do with creation and validating of new blocks and this is done by the miners. Now how do they do this? For a new block to be created, all miners go into random search to discover a complicated code that will be the identification of that block.

Once any miner is able to discover it, all the others confirm it, and the code becomes the hash of that block. Because of the complexity of this code, to be a miner, you must be highly skilled or acquire the right skills. Now, the discovered hash will be placed at the end of the block which will form the header of the next block linking it together and the process is repeated as new blocks come into existence in the chain.

Because a lot is required to be a miner, for example, apart from having a highly computational skill, you need mining equipments like storage disc as well as continuous power supply and constant maintenance. So, to compensate the miners for these expenses including their time, any miner who discovers the code of a block is rewarded with some coins. Currently in Bitcoin blockchain, the reward is 6.25 Bitcoins. The miner will also get some commission that come from transactions carried out in that block.

WHAT DO YOU UNDERSTAND BY THE BITCOIN HALVING?

Bitcoin halving is actually one of the ways of checking the inflation rate of Bitcoin. It is a method that controls the amount of Bitcoin in circulation to ensure that the coin is not overly supplied. This helps to protect its value. At any time that Bitcoin halving occurs, the reward for mining a block is cut into half. This halving occurs every 210,000 blocks.

The last one took place in 2020 when 630,000 blocks were reached and the number of coins dropped to 6.25 Bitcoin.

WHAT ARE THE EFFECTS OF THE HALVING ON MINERS?

I can say that halving affects the miners directly because it means that their reward has been cut to half, having in mind that this is a major incentive to be a miner. However, because the value of the coin is preserved and it appreciates, this will also benefit the miners because it means that the coins in their possession has more purchasing power and this will accommodate the downside of this process.

WHAT IS THE CURRENT BLOCK HEIGHT ON THE BITCOIN BLOCKCHAIN ? HOW MANY MORE BLOCKS BEFORE THE NEXT HALVING?

At the time of carrying out this task, the height of the Bitcoin blockchain is 696,775 as gotten from https://www.blockchain.com/explorer

source

Well, it has been noted that the halving occurs every 210,000 blocks and so far 3 halves have occurred, this means that the next halving will be the fourth one.
Block height for next halving = 210,000*4 = 840,000
Current block height is 696,775
Therefore, number of blocks until next halving = 840,000 - 696,775
= 143,225 blocks

DO YOU THINK STEEM'S INFLATION RATE REDUCTION CAN AFFECT OTHER COINS?, WHY?

It is good to note that the reduction inflation rate of steem has been efficient. However, I do not really think that steem's inflation rate can affect other currencies. This is because steem has not gotten market dominance like Bitcoin. And even if it does, it will not necessarily affect other currencies.

WHAT IS THE CURRENT BLOCK HEIGHT ON STEEM BLOCKCHAIN? HOW MANY BLOCKS BEFORE THE NEXT 0.01% REDUCTION?

At the time of performing this task, the height of the block in the steem blockchain is 56,547,823 blocks as seen from https://steemscan.com.

source

Steem inflation rate is reduced at a rate of 0.01% every 250,000 blocks and that the current block height is 56,547,823,
We then calculate
Number of reductions so far is 56,547,823/250,000 = 226.191
This indicates that there have been 226 reductions so far.
I will now take the next whole number to calculate the block height for the next reduction.
Block height for next reduction= 227*250,000
= 56,750,000
Therefore, number of blocks until next reduction = 56,750,000 - 56,547,823
= 202,177 blocks

CONTINUATION OF LAST WEEK'S WORK

WHAT IS THE CURRENT VALUE OF BTC ON THE DAY YOU ARE PERFORMING THIS TASK? IF YOU MAKE A PURCHASE OF $2,500 THEN (a) HOW MANY SATOSHI 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)

At the time of carrying out this task, the price of BTC from coinmarketcap page is 1BTC = $48,693.55

source

Now we calculate the price of the satoshi
1 Satoshi = 1/100000000* 1 BTC
= 1/100000000*48,693.55
=$ 0.0004869355
= $0.000487( to 3 S.F)

Now we solve this
$2,500/$0.000487
=5,133,470.225
= 5,130,000 Satoshis (to 3 S.F)

So,
(A) $2,500 = 5,130,000 Satoshis
(B) 1 Satoshi = $ 0.000487

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. (1 JAGAR = 0.00000001)
At the time of carrying the assignment, the price of BNB from Coinmarketcap is 1BNB = $456.26

source

Now we calculate the price of the jager
1 jager =1/100000000* 1BNB
1BNB = $456.26
Therefore, 1 jager = 1/100000000*456.26
= $0.0000045626
1 jager = $0.00000456(to 3 S.F)

Now let's solve the following
$30/$0.00000456
= 6,578,947.369
= 6,580,000 (to 3 S.F)

Therefore,
(A) $30 = 6,580,000 jager

(B) 1 jager = $0.00000456

CONCLUSION

This lecture is very wonderful and enlightening, and it is filled with mathematical analysis. It is indeed worth it.

I am grateful to Professor @awesononso