Steemit Crypto Academy [Beginners’ Level] | Season 3 Week 8| Blockchain Rewards.
1) In your own words, explain mining and block reward.
Blockchain is basically a digital ledger where transactions on the blockchain network are stored. Mining refers to the process of inputting the records of the transactions onto the blockchain ledger.
Mining is normally wrongly limited to making new coins only, however mining includes;
1) Verifying the information entered on the ledger. Miners verify information on the ledger of transactions by making sure that information is up to the intended block size to make a whole block.
2) Validating the information entered into the blockchain ledger. Miners have to make sure that double spending does not happen. Double spending refers to the process of spending a coin twice.
The people that do mining in blockchain are called miners. For their work, miners normally receive a reward. Miners earn in two ways;
1) In the blockchain system, transactions are stored on a digital ledger and through this process blocks are formed and these blocks are joined together by hash.
Whenever, a miner is the first one to make a block, new bitcoins are mined and given to that miner. Therefore the block reward refers to the number of bitcoins mined whenever a block is formed.
2) The second way miners earn is through being paid transaction fees for all the transactions on a block. Miners really do important work for the blockchain system because they have to verify and validate the transactions being entered into the transactions ledger and make blocks by clamping transactions together which form a block.
The blocks have to be joined using hash and the miners have to show proof-of-work so that the right hash can be discovered and then used.
2) What do you understand by Bitcoin Halving?**
Bitcoin Halving in simple terms is the process by which the Bitcoin mined for every 210,000 blocks is halved. This is said to happen approximately every 4 years. Therefore if 24 coins were being mined for each block the coins will be halved down to 12.
This process is very helpful because it helps to fight high inflation rates. Inflation is where a currency be it fiat or crypto loses its value or it decreases due to a high supply of that currency in the market. Therefore, whenever the Halving process happens, less coins are minted therefore the supply is controlled.
Bitcoin Halving furthermore, helps to increase or maintain the value of the Bitcoin. The less the supply of something is, the more valuable it is considered, therefore less bitcoins are supplied in the Bitcoin Halving process which decreases the volume on the market therefore increasing its value.
3) What are the effects of Halving on miners?
Mining reduces the rewards that go to miners for making blocks and this affects their work in the sense that they may to cover their own costs for power and machinery used.
This in a sense also pushes some miners out of business if they are unable to cater for operating costs like power.
To be the first miner to create a block you need a very fast machine which easily finds the right hash for the block. Therefore when the Halving process happens miners with faster machines are more advantaged as the miners with old machines either have to upgrade or put a hold on mining.
The Halving process also ushers in new miners because some miners quit, established mining firms also cut down on their numbers and machines therefore it is easier for new miners to enter the market.
Though Halving has positive effects on the market and the coin, it affects miners negatively because the amount earned for their hard work is reduced. Though one could argue that at least the coins received are of high value, as what would be the use if they earned the actual amount though of low value.
4) What is the current block height on the Bitcoin blockchain? How many more blocks before the next halving? (Screenshots and full working)
The current block height on the Bitcoin blockchain is 696077 as highlighted in the image above.
It is important to notice that the next halving with be the 5th.
Number of blocks before the next halving
Block height for the next halving = 210,000 x 5
= 1,050,000
Number of blocks before the next halving
= (height for the next halving) - (current height)
= 1,050,000 - 696077
= 353,923
353,923 blocks are needed before the next halving.
5) Do you think Steem’s inflation rate reduction can affect other coins? Why?
According to the Steemit whitepaper, Steem creates new tokens at an inflation rate of 9.5%. Furthermore, this inflation rate decreases at a rate of 0.01% every 250,000 blocks.
Steem has an inbuilt mechanism as seen in the white paper in the image above to control inflation. This helps control the supply so that steem can remain valuable.
Truthfully, I don’t think Steem’s inflation rate reduction can affect the other coins because increase in the value of Steem also causes the value of other Altcoins to increase.
**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 current block height on the Steem blockchain is 56,419,920.
Number of reductions = current block height / 250,000.
= 56,419,920/250,000
= 225.67968
= 225 reductions.
Number of blocks before the next reduction
= Next whole number for number of reductions x 250,000 blocks
= 226 x 250,000
=56,500,000 blocks.
Therefore, the number of blocks before the next reduction is;
= (Number of blocks before the next reduction) - (current block height)
=56,500,000 - 56,419,920
=80,080 blocks.
Therefore there are going to be 80,080 blocks before the next 0.01% reduction.
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 3sf)
(1 Satoshi = 0.00000001 BTC)
The current value of BRC is $46,392.37.
a)
1 Satoshi = 1/100000000 of 1 BTC and the current value of 1 BTC is $46,392.37
Value of 1 Satoshi = 1/100000000 x 46,392.37
= 0.0004639237usd.
Number of satoshis if $2,500 purchase was made;
= 0.0004639237 x 2500
= 1.15980925 satoshis.
Therefore, I would has 1.15980925 satoshis is I had made a purchase of 2,500usd.
b) Value of Satoshi for this particular day
1 Satoshi = 1/100000000 x 1 BTC
= 1/100000000 x 46,392.37usd
= 0.0004639237 usd.
Therefore the value of 1 Satoshi for the day is 0.00046usd.
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 correct to 3s.f)
(1 jager = 0.00000001 BNB)
(Screenshot of current value should be provided.)
The current value of BNB is $ 426.96.
a) 1 Jager = 0.00000001 BNB
Since the purchase of $30 has been made;
Number of Jagers
= 0.00000001 x 30
= 0.0000003 Jagers.
Therefore, if one made a purchase of $30 then they would have 0.0000003 Jagers.
b) I Jager is 1/100000000 of BNB.
Value of Jager for the day
= 1/100000000 x 426.96usd
=0.0000042696 usd.
Therefore, the value of the Jager is 0.0000042usd.
@awesononso thank you.
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