Author: Ross Nicoll 2014-10-25 22:10:02
Published on: 2014-10-25T22:10:02+00:00
The article discusses the potential impact of halving on the Bitcoin mining industry. It references Dogecoin's quick halving schedule as a worst-case scenario. The article explains that miners do not shut down all at once and some may remain loyal or optimistic, leading to a jolt in hashrate when rewards drop. However, newer and more efficient hardware may help to push the hashrate back up again within a reasonable timeframe. The article goes on to explore the consequences of significant loss of hashing power, which would have a catastrophic effect on the security of Bitcoin. If mining is no longer profitable after the halving, miners would turn off their equipment or mine something else. This would lead to a drop in hashpower and potentially allow for malicious attacks on the network. However, the article provides hope that the equilibrium break-even situation could prevent a hashpower drop of over 50%. The article also explores the estimation of miner's income margin (MIM) and concludes that if f > 1, MIM is less than 0.5. Finally, the article notes that while reward halving is a deficiency in Bitcoin's design, there is still hope that it won't be critical.
Updated on: 2023-06-09T03:30:48.679225+00:00