Author: Paul Sztorc 2016-03-02 16:27:52
Published on: 2016-03-02T16:27:52+00:00
It is essential to prepare an emergency code that can lower the difficulty by a large factor, as the halving-difficulty-drop problem can become quite disastrous. If 100% of miners shut off their hardware, which is possible, it will cause profit margins to narrow over time, leading to a disastrous result if miners are homogenous. Users may hold off on transacting until fees decrease, and a crash in price could affect miner revenue. Miners may decide to temporarily halt mining until the difficulty falls naturally, but this is potentially disastrous because excessive difficulty adjustments are measured in blocks, not time. A worst-case scenario would require lowering the difficulty via hard fork, coded and tested in advance, to avoid delays and contentious conversations. If such a disaster occurs, we shouldn't take any chances and reduce difficulty by a huge proportion, around 80%. Smoothing rewards should also be considered to prevent this from happening again. The proposal for such a code may not be practically deployable alongside SegWit unless there's an emergency situation.
Updated on: 2023-06-11T04:17:39.084066+00:00