Author: LORD HIS EXCELLENCY JAMES HRMH 2020-03-22 11:58:33
Published on: 2020-03-22T11:58:33+00:00
In a recent email thread on the Bitcoin Protocol Discussion group, a question was raised about how to handle a potential drop in mining power that could make the time until the next retarget much longer. There are two practical solutions: do nothing or hard fork a difficulty reduction. If bitcoins retain even a small fraction of their value compared to the previous retarget period and if most mining equipment is still available for operation, then doing nothing is probably the best choice. As block space becomes scarcer, transaction feerates will increase and miners will be incentivized to increase their block production rate. However, if the bitcoin price has plummeted more than 99% in two weeks with no hope of short-term recovery or if a large fraction of mining equipment has become unusable (again, say, 99% in two weeks with no hope of short-term recovery), then it's probably worth Bitcoin users discussing a hard fork to reduce difficulty to a currently sustainable level. There seems to be a possibility that miners are trying to optimize mining profit by limiting the average hash rate during the retargeting, saving some electricity but poorly considering the overall situation where they give opportunity to other miners probably raising the hash rate for the next period. This approach may not be as profitable for the ecosystem as holding a lottery for mining as has been suggested elsewhere in the past.
Updated on: 2023-06-14T00:08:56.703208+00:00