Author: jk_14 at op.pl 2023-01-21 10:20:02
Published on: 2023-01-21T10:20:02+00:00
The article discusses the issue of difficulty adjustment and halving in Bitcoin mining. The writer proposes a conservative approach to addressing the problem of hashing power dropping due to no average price increase within 4 years. This approach suggests accepting a drop in hashrate without executing any halving and waiting for the hashrate to recover, even if it takes 20 years, landing at the lowest possible annual inflation set by a free market. The proposal is considered conservative and would suit Bitcoin, but it wasn't foreseen at the beginning. Peter Todd responds to this proposal stating that the immediate danger with halving is that profit margins tend towards marginal costs rather than total costs, resulting in all hashing power immediately having to shut down and fees increasing dramatically, causing enormous disruption to many things, including Lightning channels. He also explains that sufficient fee increases to bring back hashing power in such scenarios would cause enormous disruption to many things.
Updated on: 2023-06-16T03:38:19.254345+00:00