On 26 October 2014 00:10, Ross Nicoll wrote:
> I'd suggest looking at how Dogecoin's mining schedule has worked out, for
> how halvings tend to actually affect the market. Part of Dogecoin's design
> was that it would halve very quickly (around every 75 days, in fact), so
> it's essentially illu
I'd suggest looking at how Dogecoin's mining schedule has worked out,
for how halvings tend to actually affect the market. Part of Dogecoin's
design was that it would halve very quickly (around every 75 days, in
fact), so it's essentially illustrating worst case scenario.
Firstly, miners do no
Interesting analysis! I think there are a few important effects that aren't
being considered.
1. When the block reward is halved, inflation is halved as well. Is this
halving already priced in by the market or will it result in an upward
pressure on the price?
2. It was acknowledged that the refe
On 25 October 2014 21:53, Alex Mizrahi wrote:
>
> We had a halving, and it was a non-event.
>> Is there some reason to believe next time will be different?
>>
>
> Yes.
>
> When the market is rapidly growing, margins can be relatively high because
> of limited amounts of capital being invested, or
> For the sake of argument, lets assume that somehow (quite unlikely)
Why is it unlikely? Do you believe that the cost of electricity cannot be
higher than expected mining revenue?
Or do you expect miners to keep mining when it costs them money?
> half the mining equipment gets shut off.
> The
On Saturday 25. October 2014 13.27.30 Adam Back wrote:
> - alternatively you might say why not 1/100th reward reduction per 2
> week period rather than 1/2 every 4 years, a difficulty retarget could
> be a convenient point to do that.
mining equipment has a much shorter lifetime than 4 years, so t
On Saturday 25. October 2014 21.06.32 Alex Mizrahi wrote:
> If miner's income margin are less than 50% (which is a healthy situation
> when mining hardware is readily available), we might experience
> catastrophic loss of hashpower (and, more importantly, catastrophic loss of
> security) after rewa
Some thoughts about Alex's analysis:
- bitcoin price may increase (though doubling immediately might be
unlikely) after the halving (because the new coins are in short
supply). Apparently there is some evidence of a feedback loop between
number of freshly mined coins sold to cover electrical costs
> We had a halving, and it was a non-event.
> Is there some reason to believe next time will be different?
>
Yes.
When the market is rapidly growing, margins can be relatively high because
of limited amounts of capital being invested, or introduction of more
efficient technologies.
However, we s
We had a halving, and it was a non-event.
Is there some reason to believe next time will be different?
--
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Gavin Andresen
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Bitcoin-deve
> The hashpower market is maturing in the direction of
> financial instruments, where the owner of the hashpower is not
> necessarily the one receiving income. These are becoming tradeable
instruments,
Meni Rosenfeld issued tradeable mining bonds back in 2012:
https://bitcointalk.org/index.php
It is an overly-simplistic miner model to assume altruism is
necessary. The hashpower market is maturing in the direction of
financial instruments, where the owner of the hashpower is not
necessarily the one receiving income. These are becoming tradeable
instruments, and derivatives and hedging a
> "Flag day" herd behavior like this is unlikely for well informed and
> well prepared market participants.
>
It is simply rational to turn your mining device off until difficulty
adjusts.
Keeping mining for 2+ weeks when it costs you money is an altruistic
behavior, we shouldn't rely on this.
---
On Sat, Oct 25, 2014 at 2:06 PM, Alex Mizrahi wrote:
> Hashrate might drop by more than 50% immediately after the halving (and
> before difficulty is updated), thus a combination of the halving and slow
> difficulty update pose a real threat.
"Flag day" herd behavior like this is unlikely for wel
# Death by halving
## Summary
If miner's income margin are less than 50% (which is a healthy situation
when mining hardware is readily available), we might experience
catastrophic loss of hashpower (and, more importantly, catastrophic loss of
security) after reward halving.
## A simple model
Le
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