Editors Note: This article comes fromWhite Plan (ID: whitesights), reprinted by Odaily with authorization.
, reprinted by Odaily with authorization.
Exploding mines on the ground.
This time the thunderstorm comes from the official discussion community of Ethereum developers Ethereum Magician Forum. Because there is a proposal in the Ethereum developer proposal to reduce the Ethereum block reward again. Rewards reduced from 2 ETH to 0.5 ETH per block.
I have been paying attention to DeFi recently, so I haven’t read the Ethereum Magician forum for a few days, but I was really shocked when I saw this proposal. In the mining world of Ethereum, no matter which country or region miners are, they attach great importance to mining. The issue of mine rewards, because it is directly related to everyones income.
Seeing the entire mining field, especially the Chinese cryptocurrency mining circle, because of the halving of Bitcoin or other mining coins, the miners in the mining circle have been exhausted, but the recent bull market has been relatively easy, but this As soon as the proposal to reduce the block reward comes out, do you feel nervous again?
Several writers and teachers of the Bai plan looked at the information and found that the authors of this proposal were not real pure miners. One was a member of consensys and the founder of some cryptocurrency application projects, and the other was an Ethereum Head of the French community and also an economist.
Therefore, the thinking of the two authors is based on the discussion of the model, mainly the impact of inflation.
However, many people do not agree with this proposal.
Lets take a look at the specific content of the proposal:
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Proposal Title: Reduce Ethereum Block Rewards to 0.5 ETH in 2020
Authors: John Lilic (Member of consensys), Jerome de Tychey (Head of Ethereum France, Economist)
Status: Draft
Type: Standards Track
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overview
overview
Among the top 4 PoW blockchains, Ethereum pays the highest inflation rate for block verification (Bai Plan Note: Because tokens are issued through block rewards). The blockchain, which is much larger than Ethereum and has a much lower inflation rate, has not suffered any adverse effects.
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Purpose
Purpose
Too high a block reward is inefficient and will have a negative impact on the economic ecosystem.
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specification
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Fundamental
Fundamental
We first determine the target block reward by comparing Bitcoins inflation rate:
During the bitcoin halving, there were 18,375,000 bitcoins in circulation. 328,500 new bitcoins are mined each year (6.25 BTC/day * 144 blocks per day * 365 days a year).
Therefore, Bitcoins annual inflation rate is approximately 1.78% (328,500 / 18,375,000 * 100).
At the time of writing, there are 110,875,500 ETH in circulation. 4,982,250 ETH are mined every year (13,650 ETH/day * 365 days a year).
Ethereums annual inflation rate is thus 4.49%. (4,982,250 / 110,875,500 * 100).https://etherscan.io/chart/blockreward
The above calculation data source
The comparison shows that Ethereum currently pays 2.52 times higher block rewards than Bitcoin.
To illustrate this further, if the ETH/BTC price ratio increased to 0.041, all other things being equal, Ethereum would pay a higher validation reward than Bitcoin in USD terms despite having a 3x smaller market cap.
Sometime after November 2020, Ethereum 2.0 Phase 0 will launch. This chain will further increase Ethereum’s inflation rate as it will pay out rewards to all users who stake and validate blocks.
The annual issuance plan of mortgaged ETH is equal to 181 * SQRT (the total amount of mortgaged ETH). The figure below illustrates some possible values.
Because it is impossible to have 100,000,000 ETH on the beacon chain. So we will use less 10M for estimation.
At this rate, the inflation rate of ETH would increase to 5,554,683 ETH/year. (4,982,250 + 572,433 = 5,554,683).
The annual inflation rate is about 5.00% (5,554,683 / 110,875,500 * 100), the inflation rate of Ethereum will be 2.81 times higher than Bitcoin (5.00 / 1.78).
1,973,583.9-572,433 = 1,401,In order to calculate the amount of block subsidy required to achieve equal inflation with Bitcoin, we must first remove the estimate of ETH2.0 issuance in order to determine the annual maximum POW reward.
150.9 highest annual PoW rewards.
1,401,Now, we calculate the maximum daily reward.
150.9 / 365 = 3839 maximum daily PoW rewards.
With a target time of 13 seconds, there are approximately 60 60 24 / 13.1 = 6,646 blocks per day.
3839/6646 = 0.5776 ETH per block.
According to Etherscan, uncle block rewards account for about 5% of the total daily rewards. Therefore, the base of the block reward should be 0.5776 * 0.95 = 0.549.
Therefore, we get a block reward rate of 0.55 ETH to match Bitcoin’s inflation rate.
So even if the block reward is set to zero, miners will still earn 1.8 ETH from transaction fees per block. Due to the huge gas market, we recommend rounding the block reward calculation range from 0.55 to 0.5, which means (at the time of writing) the miner will probably get 1.8ETH in fees + 0.5ETH in rewards. 2.3ETH per block.
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Safety Precautions
Safety Precautions
Changing the overall block reward is purely economic and only requires changing the block reward parameters.
Economically speaking, too low a block reward may lead to low miner participation due to insufficient economic incentives. This could lead to a reduction in network security, potentially exposing PoW blockchains to the risk of a 51% reorganization attack.
In this EIP, we have provided evidence from an economic point of view, comparing the Ethereum block reward to other blockchains with larger market capitalization, that reducing the block reward to 0.5 ETH will not have a negative impact on security.
