Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit
Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit.
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Source: Mirror
Title of the original text: A few small tips on ETH merger: When will deflation occur? What is the value of forked coins? Pseudo Proposition of Computational Power Transfer? User experience?
1. The switching of consensus mechanisms is not achieved "instantaneously":
The merger and upgrade of Ethereum's main network will not immediately complete the transition from Pow to Pos. Currently, Ethereum operates two consensus mechanisms simultaneously, with Pow accounting for 90% and Pos accounting for 10%. According to the development team, the time for the difficulty bomb will be postponed to September 12th (from: https://wenmerge.com/ After the difficulty bomb erupts, the difficulty of mining Pow will gradually "exponentially increase" with the completion of the merger. The current situation, due to the issue of mining costs, will force Pow miners to gradually withdraw from the network. However, this process may last for nearly 6 months or more, and the Pow network will also enter the "Ice Age".
Previous difficulty bomb schedule
2. The gradual reduction of production during the Ice Age did not result in "deflation" overnight:
During the Ice Age, due to the sharp increase in mining difficulty of Ethereum Pow, the extension of block extraction time means that the daily total reward for miners to block is reduced. According to data from previous difficulty bomb outbreaks, the difficulty of Pow mining is increased approximately once a month during the Ice Age, and the intensity of each increase is more significant than the previous one. It is estimated that the total reward for Ethereum network lasting for 6 months will be reduced by more than 50%, and the duration for 9 months will be reduced by more than 80%, After 6-9 months, most of the production reduction will be completed, and in recent days, ETHBurn has hovered around 1300. Therefore, Ethereum's true "deflation" needs to be completed in the first half of the 23rd year after 6 months of merger.
Change in block release time during difficulty bomb period
Changes in mining rewards
3. There won't be too many negative experiences on the user end:
During the ice age when difficulty bombs exploded in the past, as the difficulty of mining Pow increased sharply, users may have a very bad experience. Although the handling fees may not have increased significantly, prolonged interaction time will significantly reduce the user experience; However, after this merger, users may not experience a significant increase in interaction time. With the switch of consensus mechanism after the merger, Pos verification will gradually bear the share of the original Pow verification, and the block out time is more based on the time of Pos; And the time between the explosion and merging of the difficulty bomb this time is not long, and there will only be 1-2 mining difficulty increases at most. In the worst case, increasing the block time around 2 seconds may not affect the user experience too much.
4. What is the value of a miner's fork? Pricing rights on the exchange:
In 2017, Bitcoin experienced a wave of bifurcation, and after the tide, it was finally discovered that everyone was swimming naked. Only Bitcoin still stood firm. At that time, the market was more difficult to understand and see clearly. The "good" and "bad" of the bifurcation were not determined in intense debate, and the online bifurcation of the exchange would not bear any more stigma. Market hesitation became a tool for the exchange to compete for traffic; But today is not the same as in the past. The mainstream voice is supporting the main chain, and small exchanges may be forced to go online due to traffic competition, while top exchanges should cherish their feathers more. Without the support of top exchanges, forks that lose liquidity will be a chicken feather in the ground; However, the probability of forked coins still exists.
Exchange not providing liquidity forked currency will lose value
5. Can the transfer of computing power come true? Or a pseudo proposition:
The market is more about pricing and speculating on expectations. About 80% of the market is for Gpu mining machines, and most GPU mines will transform to build infrastructure for video streaming applications, rendering 2D and 3D objects, and cloud servers, thus ensuring a certain profit margin; The process of computing power migration is accompanied by a sudden increase in mining difficulty, and rewards will also decrease, even exceeding income. Therefore, it is not believed that large mining unions are facing huge costs to drive up the currency price of ETC without ecological support, let alone Gpu mining machines, which is not a way out. And whether there is an intuitive connection between computing power transfer and currency price is more like the question of whether there was a chicken or an egg first.
Transfer of computing power cannot sustain miners' profits
Editor in Chief: Alex
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