According to Trustnodes' November 21 report, the Eth production of the Ethereum network suddenly dropped from a few weeks ago, and the miners' block rewards dropped from 13,500 Eth to 12,500 per day.
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According to the data from etherscan, this decline is not due to the increase in uncle blocks (orphans), but because the block reward itself has dropped from 13,000 Eth to 11800 eth.
As you can see from the above, the 2016 Ethereum block rewards more than 30,000 Eth per day. After the network upgrade in 2017, the number dropped to 20,000, reaching 14,000 earlier this year.
However, there has been no recent network upgrade to affect circulation, and as the block time increases, block rewards also decrease as the hash rate increases.
The block time did not rise too much (about one second), but from this chart you can see what is going on. The difficulty bomb has already taken effect.
Everyone knows that a difficult bomb is a protocol-level algorithm that increases the computational power required to dig a block after a set date or block number.
During the bull market in 2017, the difficulty bomb took effect around 3-4 months of that year, and the block time also rose from 14 seconds to 30 seconds in October, which took 6 months.
The second time the difficulty bomb came into effect was around December 2018. After two months of operation, that is, by February of this year, the block time was 20 seconds.
It was postponed for a year, and now it restarts again a year later, this time starting from 13 seconds (sometimes as low as 12 seconds).
At first, the difficulty bomb started very slowly, but in the end it would run at a certain index until it was harder to dig into the block.
From the above, we can expect to take about 6 months to reach 30 seconds, which is about May next year. Then maybe not for 6 months, that is, next fall, the block time may be close to 1 minute.
When the block time reaches 30 seconds, the block reward is slightly more than half. When it reaches 1 minute, the block reward will be halved again, so there are only 4,000 Eths a day.
Coincidentally, this is proposed by Ethereum co-founder Vitalik Buterin to cut by two-thirds by the end of next year.
So this time the difficulty bomb may not be delayed at all. This will give the miners a great incentive not only to be unaffected by any development (such as the ProgPoW proposal), but also to actively support the development of Ethereum 2.0, and may even provide funding so that developers can launch Ethereum in time. 2.0, so I don't see the circulation drop too much.
This is a special case. Although the Ethereum network will be upgraded in a few weeks, this time it will not delay the launch of the difficulty bomb. No one has proposed to postpone it.
This means there will be no delay for at least 6 months, as the new upgrade will take time. By that time, I hope that we are close to starting a decentralized checkpoint from the Proof of Proof (PoS) beacon chain. Therefore, it may not make much sense to postpone it before implementing a difficulty bomb or something similar.
Interestingly enough, the ratio of Ethereum to Bitcoin began to rise for the first time in two years, about the time when the time of the exit began to rise and the block rewards began to decline.
The difficulty bomb algorithm is of course well known to everyone, not the most cutting-edge thing that everyone thinks. It may be a little earlier in September, but the time is basically the same.
The reason is obvious, the supply is reduced, and assuming that the demand remains the same, then the value of Ethereum is higher, the others are the same.
At this point, not only is the supply reduced, but it is expected that from now on, the supply will continue to decrease until any proposal to change the agreement occurs.
From the miners' point of view, at first you would think that there is no benefit to the decline in block rewards, but only if they only care about the number of Eths they get, not the dollar gains they receive overall.
If you only focus on Eth, then it will conflict with the holder's intentions. Some of them are reluctant to see their Eth diluted, and perhaps more importantly, they don't want to see miners concentrated on Staking.
If you focus on the dollar's earnings, then there is no difference, because the decline in supply should lead to an increase in Eth's price against the dollar, or if demand falls, then the price of Eth against the dollar will fall even smaller.
Therefore, if the miners think rationally, they should not consider this difficulty bomb. But another effect of the difficulty bomb is that the capacity of the block is reduced because the amount of data in one block is limited and there are fewer such blocks.
However, the amount of data in a block is limited to the current level, which is because the block is more frequent. If they become less, the limits can be scaled up to keep the amount of data at the same rate, regardless of the time of the block.
This means that if the difficulty bomb is allowed to run and the miner maintains at least the current data capacity (or preferably at least twice the bitcoin), then the only difference here is that the transaction is packaged into a block. time.
The market value of Bitcoin is 8 times that of Eth. In the Bitcoin network, the confirmation time of the block is 10 minutes. Therefore, the one-minute block time of Ethereum may be very reasonable, and this is only temporary.
There are obviously many Dapps on Ethereum, but they can try BLS rollups, zk-rollups, or a long list of potential tools from Buterin:
Account abstraction, top smart contract wallet; Casper equity proof; resource efficient lightweight client; Optimistic rollup, post-Istanbul 3000+ TPS; non-interactive ZKPs for privacy and scalability (zero knowledge proof); More post-sharding TPS.
This means that it is a matter of debate when the Ethereum is approaching the PoS conversion and letting the difficulty bomb last for at least a few months.
Perhaps in this case, the graphics card miner needs to wait a little longer, but game developers, decentralized exchanges or other Dapp developers will try to improve efficiency and improve the user interface, because there is almost no actual between 15 seconds and 60 seconds. It's too big, so they should do it anyway.
Perhaps the miners will not act rationally, only the network has been blocked (it can be said that their data has reached the extreme, Eth's capacity is even lower than bitcoin). But in this case, at least we will know what kind of miners are in a network that is almost impossible to obtain greater certainty in a reality. It is worthwhile for the inconvenience of a few months for the timely launch of PoS. .
This means that there must now be some strong reasons to postpone the difficult bomb because it is difficult to understand why the network should agree to it. If this is the case, then Ethereum is likely to halve the block before Bitcoin.