Hello crypto world, glad to be part of this week’s lecture by professor @imagen on "Bitcoin's Tragedy". Below is my homework task. Thank you for an interesting and informative lecture.
INTRODUCTION
Bitcoin is the first decentralized digital currency, created by an anonymous person or group of persons with the name Satoshi Nakamoto in the year 2008, but was in full use in 2009. It us an open-source project that works with proof of work consensus algorithm and operates on a peer-to-peer network without any central authority or third-party interference. The creation of a new Bitcoin is through a process known as mining, this involves persons known as miners to solve difficult complicated mathematical problems and the first to finish solving the problem is reward with a new bitcoin block. A new bitcoin is mined every ten minutes averagely.
Bitcoin blockchain undergoes an event every four years known as Bitcoin halving. Bitcoin halving is the splitting of the miners reward into two halves, this event occurs in every 210,000 blocks mined in the blockchain every four years. The halving of Bitcoin also leads to reduction of Bitcoin's inflation rate and the amount of new Bitcoin's in circulation. Bitcoin halving is in alignment to the whitepaper of Bitcoin, which Satoshi Nakamoto wrote that the maximum number of bitcoin that should be in circulation by the year 2140 is 21 million, as such the halving of Bitcoin's helps to keep this establishment in order, so the the amount of Bitcoin in circulation is not exceeded or doesn't get to its maximum amount before year 2140.
1.) How many times has Bitcoin been “halved”? When is the next expected? How much do Bitcoin miners receive today? Name at least 2 cryptocurrencies that are or have been "halved".
How many times has Bitcoin been "halved"?
From records, Bitcoin halving has occurred three times.
• The first Bitcoin halving happened on the 28th of November 2012, after its invented in 2008(4 years later). The price of one Bitcoin was just $12 and one year after the halving Bitcoin price skyrocketed to about $1,000. As in line, the miners reward was also halved from 50BTC per block to 25BTC per block
• The second halving happened on the 9th of July 2016, at this time Bitcoin price had fallen to $670 per coin but by July 2017 it rised to $2,550 and by December that same year, Bitcoin experienced an all-time high of $19,700. Again miners reward was halved to 12.5 BTC per block.
• The third and most recent halving occured on the 11th of May 2020, with the price of Bitcoin at $8,787 and the miners reward also reduced to 6.25 BTC per block.
When is the next expected?
Following the four year halving cycle, the next Bitcoin halving is expected to happen in 2024. It is also expected that the miners rewards will be halved to will be 3.125 BTC per block.
How much do Bitcoin miners currently receive?
The current reward received by Bitcoin miners is 6.25 BTC per block, after the last halving in May, 2020.
2 cryptocurrencies that are or have been "halved"
- Litecoin cryptocurrency has been halved before. It's halving occurs every four years as seen in Bitcoin. Litecoin has experienced two halving and each halving occurs after every 840,000 blocks. Litecoin experienced second halving in August 5, 2019. This event led to a reduction in miner's rewards too, from a reward 25 LTC to 12.5LTC. The next Litecoin halving is expected by 18th of August 2023.
- Zcash cryptocurrency has also been halved four years after it was hardforked from Bitcoin network on the 28th of October 2016. It's first halving occured on 18th November 2020, after generating 1,046,400blocks, which initiated the halving. The miner's rewards was also halved from 6.25 ZEC to 3.125 ZEC.
2.) What is a consensus mechanism? How are Proof-of-Work and Proof-of-Staking different?
Consensus Mechanism
Consensus mechanism also known as Consensus algorithm or protocol is a desensitized computer program used in computer software and blockchain networks for approval and validation of a new transaction data recorded in the blockchain network. Consensus mechanisms are unique patterns used by nodes on a blockchain to come to an agreement, in order to establish trust and security in decentralized computer system or blockchain network and helps keeping records. Some examples of consensus mechanism are Proof-of-Work, Proof-of-Burn and Proof-of-Stake consensus mechanism.
What is Proof-of-Work(PoW)
Proof of work(PoW) is an original type of consensus mechanism used in the mining of first generation coin like Bitcoin. PoW mechanism operates in a manner whereby each node in the blockchain are required to solve a cryptographic mathematical puzzle or problem, and the first node to solve the puzzle will be rewarded with a new coin. The first node will be given privilege to mine a new block add it to the blockchain network and also validate the transaction data. Ethereum and Bitcoin blockchain adopts Proof-of-Work consensus mechanism.
What is proof-of-stake(PoS)
Proof-of-Stake is an alternative of Proof-of-work mechanism. PoS mechanism operates on the amount of coin a node owns on the network. The miners are able to validate transactions based on the amount of coin they have staked in the blockchain. The PoS consensus mechanism was created to resolve the scalability and poor eco-friendly problems of PoW mechanism. As PoS mechanism is dependent on the validator or nodes holding the highest coin in the network, which is given the power to mine new blocks, and doesn't need miners to solve complex cryptographic puzzles nor requires miners to have strong computer power systems like PoW mechanism.
Difference between Proof-of-Work and Proof-of-Staking
| Proof-of-Work | Proof-of-Staking |
|---|---|
| Requires nodes to solve difficult cryptographic puzzles first, to get mining power to mine a new block | Requires nodes with the highest and largest coin in the network to have validating power to validate transactions |
| Requires expensive and sophisticated equipment to solve the puzzles | Requires less expensive equipment for its operation |
| Consumes much engery and resources, and is not eco-friendly | More energy efficient and eco-friendly |
| The first miner to solve the problem is rewarded with a new block | There is no block reward for the validators, rather they are rewarded with transaction fees |
| Security level is high and trusted | Security level is not yet proven |
3.) Enter the Bitcoin explorer and show the hash corresponding to the last transaction. Show Screenshot.
First, I'll visit Bitcoin explorer website, I scroll down to see the latest transactions and click on the latest transaction, as seen on the screenshot below.
The hash of last transactions is 1e2d370ce3f57349d467d493050fbb8939bc05d0ed04d3b3862e4aee7e619be8
4.) What is Altcoin Season? Are we in Altcoin Season? When was the last Altcoin Season? Name and show 2 Altcoin charts followed by their growth in the latest Season. Give reasons for your answer.
What is Altcoin Season
Altcoin is formed from two words "Alternative and coin". An Altcoin season is a period where other or alternative coins of Bitcoin shows great increase in growth and performa excellently in the crypto market, and are also able to compete in the market with top coins like Ethereum and Bitcoin. A season where 75% of top 50 alternative coins(Altcoins) are doing better than Bitcoin in the last 90 days, is referred to as an Altcoin Season.
Are we in Altcoin Season?
From Altcoin index data from Blockchain center net, it can be seen that in the last 90days only about 51% of 50 top Altcoins have performed better than Bitcoin. With this data, i can say we are not in Altcoin Season
When was the last Altcoin Season?
The last Altcoin season, began in March 2021 and ended in June 20th 2021. During this period, 80% of the top 50 alternative coins had better performance than Bitcoin in 90days. This can be seen from the screenshot above of Altcoin index from Blockchain center net.
2 Altcoin charts
1. Terra (LUNA)
From coinmarketcap.com, Terra LUNA coin is ranked #11, with a price value of $43.73, Market Cap of $17,565,196,486 and 24hrs trading volume of $1,349,191,118.
Within 3months period, Luna coin has recorded a significant growth with its price value reaching a maximum amount of $49.05 on the 4th of October 2021, after the Altcoin Season ended. With the current trend this coin shows it will do well and grow significantly.
2. AXS (Axie Infinity)
From coinmarketcap.com, AXS coin is currently ranked #26, with a price value of $124.32, a Market Cap of $7,547,388,764 and 24hr trading volume of $860,461,878.
The price value has reached a maximum value of $150.87 within 3minths timeframe and with the graph representation of AXS (Axie Infinity) Altcoin is one coin that will experience a continuous significant growth.
5).Make a purchase from your verified account of the exchange of your choice of at least 15 USD in a currency that is not in the top 25 of Coinmarket (SBD, tron or steem are not allowed). Why did you choose this coin? What is the goal or purpose behind this project? Who are its founders / developers? Indicate the currency's ATH and its current price. Reason for your answers. Show Screenshots Question 5
Chiliz (CHZ)
Purchase of Chiliz coin from my verified Binance account.
[Source](From my Binance account)
Why did you choose this coin?
I Choose Chiliz because I'm a lover of sports(A Man. Untied Fan) and secondly with the current trend of integrating the sport industry into Crypto world, i see Chiliz token as a good and future coin. Considering the fact that Sports industry is one of the leading sectors in the world with lots of fans and enthusiasts interested with different sports. The integration of sports industry into crypto world is an amazing idea, since the world is going virtual in all aspects.
The Chiliz is one of famous digital cryptocurrencies for sports and entertainment, that operates on Socios.com blockchain platform. The Socios.com platform creates a platform for its users to be part of governance their favorite sport. The purchase of CHZ token, gives fans access to various fan tokens and also have a stake in their favorite sport club.
Chiliz token is ranked #62 on CoinMarketCap at the time of writing this post, with a price value of $0.3366, Market Cap of $1,989,863,813, a Fully Diluted Market Cap of $2,992,293,722 and Trade Volume 24h of $1,097,772,370
What is the goal or purpose behind this project?
The main goal of Chiliz project invention is that, Chiliz platform aims to become the official crypto exchange to many sports organizations and be the recognized digital assets for the sports organization. Also, Chiliz platform aims at creating an avenue for fans to get connected to their favorite althelete and Sports clubs, with the rich and diverse features it offers its users and in the process create revenues.
Who are its founders / developers?
Chiliz project was founded by Alexandre Dreyfus, the CEO of Chiliz. Some other iconic team members and developers of Chiliz are; Sam Li, Dr. DisRespect, Nicholas Maurer, Guillaume Patry and Elky. and other partners seen on the screenshot below.
Indicate the currency's ATH and its current price.
From Coinmarket cap. TradingView website, the All-time high price for Chiliz coin is 0.4600 USDT, which occurred on 9th of June 2021. The current price is 0.3376 USDT on the 8th of October 2021 (17.43 UTC).
6.) Conclusion
Bitcoin is the first digital cryptocurrency that operates with PoW mechanism, every four years after the generation of 210blocks an event known as halving occurs, in order to ensure that the order written on Bitcoins Whitepaper of having a maximum of 21million Bitcoin in circulation by 2140 ia achieved.
The Altcoin season is one period most investors and traders take advantage of and make profits, during this period 75% of top 50 Altcoins fo well that bitcoin in the market. Thus is one period traders always look out for.
Chiliz is one of the famous sports crypto currency which strives to create a connection between fans and athletes of their favorite clubs. Chiliz platform rewards its users with gifts, and is built on Socios.com platform. After this research, one can say that the Chiliz project is an innovative one for sports lovers like me and has a great future.
Cc:@imagen
Gracias por participar en la Cuarta Temporada de la Steemit Crypto Academy.
Continua esforzandote, espero seguir corrigiendo tus asignaciones.
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