Crypto Profit as a platform for investing in Bitcoin why ...

Stability of the difficulty. A weakness you may not be aware of.

EDIT: Here's a TL;DR
Sorry if I rambled on a bit there. I'll try to make my point a bit more concise here.
TL;DR: If bitcoin starts to gain mainstream success, eventually a large percentage of the miners will be in it for the profit and not for the good of bitcoin. My fear is a crash in bitcoin's value after achieving general acceptance as a form of payment could cause a crash in hash rate from miners shutting down when the boss sees a drop in profitability. A crash in hash rate could possibly destroy bitcoin's usefulness as a form of exchange, driving the price down further, killing the currency. In my post I describe a possible solution to make scaling down difficulty to match a sudden drop in hash rate smother. If this interests you, then please read my post and share your thoughts. I feel like this is an obvious flaw in the protocol that was overlooked. Am I wrong? If so, please tell me because I'd like to have my worries eased.
ASIC miners and the rapid increase in difficulty have created a new point of failure in the bitcoin network that was never that large of a problem before. No, I’m not talking about the increased centralisation of mining that you see so many people complaining about. I’m talking about the rising difficulty itself and the way the network scales the difficulty. It allows for smooth transitions in the upward direction, but a sharp decline in hash rate could kill bitcoin completely. The readjusting of the difficulty doesn’t really happen every two weeks, it’s really every 2,016 blocks which should be about two weeks in theory. If we were to lose a large chunk of the hash rate, lets say 66%, block discovery time will increase to 30 minutes per block. Maybe that’s not a huge deal, but it definitely impacts the convenience and usability of bitcoin as a means of exchange and would certainly impact the price negatively. Also, it’s possible that we would be stuck at this slow confirmation rate for 6 weeks in this example. Perhaps it is an unlikely scenario that such a large amount of hash rate is lost within a short span, but think about it this way. Imagine a point in the future where ASIC miners account for over 98% of the hash rate. Maybe bitcoin is well on it’s way into mainstream acceptance in this future. There may be large corporations that own large mining farms. These corporations may be publicly traded companies with a responsibility to maximize profits for their shareholders. If the value of bitcoin were to crash, there’s a good chance that some of these corporations may shut down their mining operations because it no longer has a good ROI in the opinion of their CEO. Maybe the next reward halving is coming up soon, that could also cause miners to shut down. This would slow down transaction confirmations, impacting it’s usefulness as a means of exchange and driving the price down even lower, driving even more miners to shut down. This would continue exponentially until the only remaining hashing power is us, the early adopters, true believers, and ASIC manufacturers. We could very easily end up in a situation with hour long confirmation times or longer, and the next difficulty adjustment being months away. That would essentially completely kill off bitcoin. It’s not logical to assume there will never be a large drop in hash rate between now and 2140. It’s not possible to predict political events that far into the future. Maybe world war 3 happens and China decides to unplug their whole country from the outside internet. Maybe Butterfly Labs successfully ships out 1,000,000 terahash miners that run on sunshine dust and unicorn farts and they quickly become the defacto standard, and then it’s discovered that they are a fire hazard. Many people are killed, homes are lost, and people just start turning them off out of fear. You just don't know what will happen that far into the future.
I have an idea about how the protocol could be modified to protect against this sort of scenario and allow for a sharp decrease in hash rate without losing its usefulness as a means of exchange. There should be an emergency mode that drastically cuts the difficulty rate. This emergency mode can be requested by any node in the network but will only occur if the network has consensus from the nodes. The request could be triggered by two possible events. The first trigger event should be if no blocks are discovered for a certain span of time, lets say an hour and a half. The second event should be if a certain number of consecutive blocks take over 25 minutes to discover. The reason for using 25 minutes as the trigger is because that would require a loss of 55% so in theory a single person couldn't trigger it without having over 50% and in that scenario we have worse problems than the falling hash rate. Once the event is triggered, the difficulty should be slashed by a factor of 10x and reduce the block reward to 0. If it’s impossible to have no reward blocks, then use a dust amount of bitcoin like a few Satoshies. If the event was triggered by 25 minute confirmation times then the new emergency block discovery time will be 2.5 minutes. This will have the immediate effect of speeding up transactions that have possibly been waiting awhile for confirmations. The rapid block time will have the secondary effect of quickly and more accurately calculating the new hash rate of the network. (More data points over a shorter spread of time.) The removal of the block reward serves to disincentivize miners with lots of hashing power from trying to trigger the event on purpose so they could make more bitcoins at a lower difficulty rate and also prevents the creation of large amount of bitcoins since it would be moving into an unknown block discovery rate. This emergency event should not last long because miners would just shut down even faster with no block reward. Lets say it only lasts 96 blocks. Assuming 2.5 minute confirmation times, 96 blocks would take 4 hours to mine but that number could vary depending on how much hash rate was lost. Lets put this in perspective. A sudden loss of 55% of the hash rate would result in a loss of 4 hours of block rewards. A loss of 90% would be 16 hours with no block rewards. After 96 blocks have been mined, the network can make an estimation on the new hash rate based on the speed those blocks took, and generate a new difficulty to resume normal 10 minute confirmation times and normal block rewards. However, such a short span of time may not be enough to generate an accurate difficulty for the network. The network should recalculate the difficulty again after 432 blocks (3 days), and then resume the normal 2 week schedule. Each time an emergency event is triggered, the next scheduled halving of the block reward should be moved back by 96 blocks. That way these events have no effect on the mathematical total of bitcoins that can possibly be mined by 2140.
Even if these events are very unlikely and it’s possible that this scenario will never play out, it would be added security to the value of bitcoin to have fail safes in place in the event of huge losses in hash rate. It could only add to the strength of bitcoin. It gives it the robustness it needs to survive a crash in price in a world where the miners are mostly interested in profits and ROI, not the good of bitcoin.
EDIT: Here's another TL;DR of my proposed solution
Basicly the nodes can request an emergency drop in hash rate if it notices block confirmation times rise above 25 minutes. This would require a loss of 55% of the hash rate. If the nodes have consensus on this request then the difficulty gets slashed by a factor of 10 and the network will mine 96 blocks with no block reward. That will take 4 hours with a 55% hash rate loss and 16 hours at a 90% hash rate loss. After the 96 blocks are mined, the network will calculate the appropriate difficulty based on the discovery rate that those blocks were mined. Normal block confirmations and block rewards will then resume at that point. What makes it nice is it will only be triggered by extreme cases. Also, mining for 4 to 16 hours for the good of bitcoin is an easier pill to swallow than just keep mining indefinitely into a possibly dying system for the good of bitcoin.
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BITCOIN MINING DIFFICULTY EXPLAINED IN 10 MINUTES! Mining Pool Shares, Difficulty and Luck Explained Bitcoin Mining Difficulty Drops A Historical 16% - Bitcoin Hashrate Down 45% - Why It's A Good Thing Ist Bitcoin nun tot weil Mining Difficulty runter geht? What is Crypto Mining Difficulty and How it Impacts YOUR Profits - Explained W/ BTC ZenCash ZEC

Bitcoin mining is a big part of what helps the cryptocurrency work as intended. We explain how mining works. However, while there have been alarms about the possibility of the Bitcoin mining industry swallowing the global power distribution if the incentive is enough, it has been calculated that a miraculous increase of Bitcoin price rise to $50, 000 would still only put the power consumption of the mining industry at 350,000 GWh, barely 0.1% of the globe’s and dwarfed by the US consumption of 4.3 ... Share. Bitcoin has just posted its biggest mining difficulty increase in nearly 2.5 years. At around 17:00 UTC on Tuesday, the network adjusted its difficulty level – a measure of how hard it is for miners to compete for block rewards on the blockchain – to 15.78 trillion. The 14.95% rise is the biggest difficulty jump since January 2018, which saw a larger spike on the back of the 2017 ... Coinwarz bitcoin mining calculator difficulty swallowing.. # usr/bin/python. Coinwarz bitcoin mining calculator difficulty swallowing.. Nyse current stock price. Blockchain world conference atlantic city. Amsoil signature series 5w20. Xrp price forecast. T3 communications. M stak reviews. Coinwarz bitcoin mining calculator difficulty swallowing ... Read More: Bitcoin Mining Difficulty Makes Biggest Jump in 29 Months. Indeed, after total bitcoin futures open interest on the 11 biggest exchanges spiked to almost $4 billion June 1, it has hovered around $3.5 billion for most of the month. Sell pressure on bitcoin is expected to continue in this lower-volume environment, according to Neil Van Huis, director of sales and institutional trading ...

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BITCOIN MINING DIFFICULTY EXPLAINED IN 10 MINUTES!

As requested an overview of shares, difficulty and luck. Excuse my appearance as I am still under the weather a bit. More detailed vids to the series coming. Plotting Rig Build: ASRock X399 TAICHI ... Bitcoin mining difficulty drops a historical 16%, bitcoin hashrate down 45%. Bitcoin mining difficulty explained in this video. Start mining bitcoins in the warrior mining btc mining farm: https ... Genesis Mining was founded in 2013 Butterfly labs, bitcoin block, block erupter, difficulty, asic miner, Bitcoin, how much will bitcoin difficulty increase, bitcoin mining, what is bitcoin ... What is crypto mining difficulty, how is it adjusted, what is the point of a block time? Vosk explains how the difficulty for mining a block reward is adjusted when mining Bitcoin on sha-256 or ... Like Reading About Bitcoin? - https://geni.us/eH9P Buy The Most Efficient GPU for Mining! - https://geni.us/Y3STM Mining Deal of the Day - https://geni.us/vSDc87y Join Red Panda Mining's Discord ...

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