Crypto Academy Season 3 Beginners’ Level - Homework Post for WEEK 8: [BLOCKCHAIN REWARDS] by @reddileep for Professor @awesononso

2개월 전

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HOMEWORK WEEK 8

Entire Question

1) In your own words, explain mining and block reward.

2) What do you understand by the Bitcoin Halving?

3) What are the effects of the Halving on miners?

4) What is the current block height on the Bitcoin blockchain? How many more blocks before the next halving?(Screenshots and Full working)

5) Do you think Steem’s inflation rate reduction can affect other coins? Why?

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)


Continuation of last week’s work:

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 satoshis 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)

2) 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 and correct to 3 s.f)
    (1 jager = 0.00000001 BNB)

In your own words, explain mining and block reward..png

mining.png

  • We already know that most Cryptocurrencies operate as a worldwide network of Peer-to-peer. There is no individual or owner to process the transactions that take place in this process. So this process is being carried out by miners all over the world. For example, if we look at Bitcoin, Mining is the process of processing this transaction by solving mathematical puzzles for the bitcoin trading process. In other words, they contribute to verify transactions and add valid transactions to the blockchain. Actually, this was a good solution for the double-spending problem in Digital Currencies. Then all these transactions have become public so that everyone in the world can see them through the blockchain. Therefore, the security of these transactions is very high as no one can change or delete the information.

block reward.png

  • When miners contribute to the mining process, they are rewarded with a certain amount of coins by the blockchain as a reward when they add a new block of transactions to the blockchain. This is basically known as Block Reward and day by day the reward is decreasing due to the complexity of this process. That is, if we look at Bitcoin again, for example, in 2009 the process was much simpler because there were not many miners and the number of transactions was relatively small. But today the process has become much more complicated due to the large number of people involved in the mining process and the increasing number of transactions that take place.

What do you understand by the Bitcoin Halving.png

  • Basically, Bitcoin Halving can be defined as the process by which reduce half of the miner's rewards to keep the value of Bitcoin and prevent inflation. So, in the Bitcoin blockchain, it automatically deducts half of the miner's reward after every 210,000 blocks.

  • This process first took place in Bitcoin on November 28th, 2012 and it was able to reduce 50BTC to 25BTC. After that, the second time Bitcoin Halved from 25BTC to 12.5BTC on July ninth, 2016. Most recently, this process took place in Bitcoin on May 11, 2020. In this way, the rewards of the miners will be reduced once for every 210,000 blocks and this is known as Bitcoin Halving.

  • Furthermore, as coin circulation becomes slow day by day, the value of that coin increase day by day. That is why the price of Bitcoin is very high compared to other Fiat currencies.


What are the effects of.png

  • As I described earlier, Miners contribute to verify transactions and add valid transactions to the blockchain. Then they reap the benefits of the effort put into this process. So, the rewards of the miners are decreasing day by day due to the process of Halving Cryptocurrencies. As the reward for mining reduces by half after every 210,000 blocks, the miner's profit reduces after every 210,000 blocks. Below I've included some of the effects of the Halving on miners,

» Difficulty in carrying out daily maintenance costs of equipment used in the mining process.

» Due to the declining rewards for transaction processing day by day, more powerful computers have to be used to recoup the revenue previously received.

» Considering a coin like Bitcoin, it has a maximum supply, so it is doubtful whether this process will last forever.

» Insufficient rewards due to increasing the amount of energy to be exerted day by day


What is the current block height on the Bitcoin blockchain How many more blocks before the next halving.png

current block height on the Bitcoin blockchain.png

  • Here I can use https://www.blockchain.com/ to open Bitcoin Explorer. After that, I have to focus on "The most recently mined blocks" to find the current block height on the Bitcoin blockchain.

Below I've attached a screenshot taken from blockchain.com

Screenshot_1.jpg

From the above screenshot, we can clearly see Current block height on the Bitcoin blockchain is 696376


How many more blocks before the next halving.png

  • We already know that Bitcoin halves for every 210,000 blocks. So, we have already faced 3 Bitcoin halvings and we can easily calculate the next block height from a simple calculation.

As Bitcoin halves for every 210,000 blocks, we can multiply 210,000 by 4.

» Then, 210,000 x 4 = 840,000

So, according to Bitcoin Explorer, current block height = 696,376 blocks (Check the below-attached screenshot)

Screenshot_1.jpg

Finally, we can find the number of Blocks before the next halving by deducting the current block height from the total height for the next halving.

» Then, 840,000 - 696,376 = 143,624

So, according to my calculation, there are about 143,624 more blocks should be created before the next halving.


Do you think Steem’s inflation rate.png

According to my mind, reducing Steem inflation can indirectly affect other currencies like Bitcoin and Etherium. Actually, if we consider Binance exchange, it is a bigger exchange that trades more than 2 Million dollars of Steem in BTC or ETH pair within 24 hours. So, when Steem’s inflation rate deducts day by day, it causes its value to increase. Therefore, a person who sells a large amount of Steem can buy a large amount of bitcoin. Here the price of bitcoin can increase by a certain percentage. In this way, Steem’s inflation rate reduction can indirectly affect other coins.


current steem.png

current block height on the Steem blockchain.png

  • Here I can use https://steemscan.com/ to open Steem Explorer. After that, we can click on "Latest blocks" to find the current block height on the Steem blockchain.

Below I've attached a screenshot taken from steemscan.com

Screenshot_3.jpg

From the above screenshot, we can clearly see Current block height on the Steem blockchain is 56,482,001


How many more blocks before the next 0.01 reduction.png

  • We already know that Steem reduces its inflation rate by 0.01% every 250,000 blocks. So, we need to find the number of reductions to calculate the next 0.01% reduction.

First of all, we should find the current Steem Block Height. So, according to Steem Explorer, the current block height = 56,482,001 blocks (Check the below-attached screenshot)

Screenshot_3.jpg

To find the number of reductions to calculate the next 0.01% reduction, we can divide the current block height by 250,000 blocks.

  • » Then, 56,482,001 / 250,000 = 225.92

It means the Steem inflation rate has reduced by 0.01% by 225 times.

Now we can determine that the next 0.01% reduction means 226th reduction.

Therefore, we can easily calculate the next reduction by multiplying the number of next reduction by 250,000

  • » Then, 250,000 x 226 = 56,500,000

Finally, we can find the number of Blocks before the next 0.01% reduction by deducting the current block height from the total height for the next 0.01% reduction.

  • » Then, 56,500,000 - 56,482,001 = 17,999

So, according to my calculation, there are about 17,999 more blocks should be created before the next 0.01% reduction.


single line art.png

Continuation of last week’s work.png

What is the current value of BTC on the day you are performing this task If you made a purchase of $2,500 then,.png

how many satoshis would you have.png

Below I've attached s screenshot of the current BTC value through Coinmarketcap

Screenshot_4.jpg

From the above image, we can clearly see Bitcoin is priced at $ 44,229.92 (To 4:51 am GMT Time, 8.19.2021)


So, if I made a purchase of $2,500 worth of bitcoin, I can easily find the BTC size by dividing the Purchased Value by Current BTC value.

  • » Then, 2500 / 44,229.92 =0.05652282436

It means I have purchased 0.05652282436 BTC for 2500$

Now, I can easily find the number of Satoshis by dividing Purchased BTC size by 1 Satoshi.

  • » Then, 0.05652282436 / 0.00000001 = 5,652,282.436

It means I have purchased 5,652,282.436 satoshis for 2500$


what is the value of a satoshi for that day.png

To find the value of satoshi, we have to multiply the current BTC value by 1 satoshi.

  • » Then, 44,229.92 x 0.00000001 = 0.0004422992

It means, value of 1 Satoshi = $0.000442 (To 4:51 am GMT Time)


What is the current value of BNB on the day you are performing this task If you made a purchase of $30 then,.png

Below I've attached s screenshot of the current BNB value through Coinmarketcap

Screenshot_5.jpg

From the above image, we can clearly see BNB coin is priced at $ 397.54 (To 5:51 am GMT Time, 8.19.2021)


So, if I made a purchase of $30 worth of BNB Coin, I can easily find the BNBsize by dividing the Purchased Value by Current BNB value.

  • » Then, 30 / 397.54 = 0.07546410424

It means I have purchased 0.07546410424 BNB for 30 $

Now, I can easily find the number of Jagers by dividing the Purchased BNB size by 1 Jager.

  • » Then, 0.07546410424 / 0.00000001 = 7,546,410.424

It means I have purchased 7,546,410.424 Jagers for 30$


what is the value of a Jager for that day.png

To find the value of a Jager, we have to multiply the current BNB value by 1 Jager.

  • » Then, 397.54 x 0.00000001 = 0.0000039754

It means, value of 1 Jager= $0.00000397 (To 4:51 am GMT Time)


Conclusion.png

As I described earlier, Miners depend on the reward they receive. Because they need to fulfil all the system requirements to conduct proper mining and they have to spend a lot of cost on maintenance activities. However, the Halving process should be carried out for these types of cryptocurrencies to reduce inflation rate and keep the value of that coin.

This is all about my homework and I really appreciate Professor @awesononso for your valuable lesson and your dedication to creating a very essential lesson for us.

my art.png

Thank you..

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Hello @reddileep,
Thank you for taking interest in this class. Your grades are as follows:

CriteriaCalculation
Presentation/Use of Markdowns1.8/2
Compliance with Topic1.7/2
Quality of Analysis & Calculations1.5/2
Clarity of Language2/2
Originality2/2
Total9/10

9E456949-E630-4867-83FC-8C102C6229C9.jpeg

The following caught my attention:

It means I have purchased 5,652,282.436 satoshis for 2500$

It would be 5,650,000 satoshis to 3 significant figures.

It means I have purchased 7,546,410.424 Jagers for 30$

It would be 7,550,000 jagers to 3 significant figures.

It means, value of 1 Jager= $0.00000397

Rounded up it would be $0.00000398.
9E456949-E630-4867-83FC-8C102C6229C9.jpeg

Feedback and Suggestions
  • You have done well on the topic.

  • There are still some points missing that would have strengthened your presentation.

  • Some other points need to be revisited.

9E456949-E630-4867-83FC-8C102C6229C9.jpeg

Thanks again as we anticipate your participation in the next class.

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Thank you for your feedback professor 👍