Remember a few months ago when the algo change happened? The block reward was about 7647. Now it's about 6917. That's about a 10% drop in block reward over three months. Now there's a proposed change to make the block reward 2435 and then only drop 11-12% over the course of a whole year!! That's a huge slowdown to the reduction of the block reward and may result in a slight increase in value in the short term, not the long term.
If left alone, the block reward would hit 2435 in two years. And would continue to decrease faster than the new proposed change. This means that with the new change, in two years DGB will be adding coins to circulation FASTER than if they left the block reward as it is now.
Excellent analysis.
I'm also inclined to agree with you on both the motives for catering to short term anxieties, and the long term negative consequences of doing so.
I hadn't realized this would happen. Once again, thanks for this extremely important comparative analysis. Great work!
I don't agree to this analysis. The numbers might be true (I didn't valid them). However, if we are for the longterm we must assume there will be a much better adoption of DGB with a lot more users as we have currently. If we don't assume this there's no sense in investing more time and money in this project
So we assume more adoption in 2 years. That also means that the daily coin production will be much smaller relative to the daily trading volume. Therefore, the new production rules will help now but don't hurt later.
The numbers are real.
Current: 0.5% drop in block reward every 3.5 days = 1 - (.995 ^ 104) = 40.6% overall drop in block reward per year.
Proposed change: 1% drop in block reward per month = 1 - (.99 ^ 12) = 11.4% overall drop in block reward per year.
I have done some simple maths with some empirical analysis from my results :
- In approximately 728 days from now (approximately 2 years as said previously), block rewards with the actual block generation rules will hit the 2435 DGB per block.
- Past this 728 days, it's kinda easy to understand that the actual block generation rules will produce less coins than the after hard fork rules (because the actual one reduce the total amount of generated coins by 1% per week vs 0.25% per week for the new rules.)
--- BUT ---
- With the actual block generation rules, we will produce 9.05 bilions coins in the next 2 years VS 4.79 bilions coins with the after hard fork rules. This means that in only 2 years,
we'll produce 4.26 bilions more coins if we don't change these block generation rules. In other words, after 2400 days (6.5 years!), both rules would have produced the same amount of coins. 6.5 years! This is not what I name a short term story... but this looks more a middle/long terms for me.
So, what I have to say after all this... is that
we have to think of what market really needs actually too to give interests for DGB. We are seeing it actually,
there is (imo) too much coins in circulation and too much coins produced a day for a beginning (because DGB is young, 1 year is nothing). The demand is, for the moment, too low to manage all this generated coins and that's why average DGB price is little by little dropping for months. And fortunately, DGB is always alive because a lot of people believe in the Digibyte project and are holding a lot (and buying a lot at some interesting prices). Without this, without a solid project like Digibyte seems to be, we'll maybe not be here today, always alive.
That's why I think, even if the hard fork rules isn't perfect (we have to adjust it), it will be worth it théorically for 6.5 years VS the actual block generation rules (only in terms of generated coins, but it's important). This will not kill the market, but will help it for some years (theorically only, there's a lot of other factors).
At the contrary, to not change the actual rules is very risky, because we are near a critical point. I'm pretty sure nobody here will see DGB near 5-6 satoshi, because a lot will panic and maybe, I don't know, kill the market. The after fork rules will be no more worth it after 6.5 years only... so, my question is : is it enough? Probably Digibyte team/community/investor want an intermediary solution between the actual rules and the after hard fork rules. And i'm sure this is the best solution.
Without doing any additional maths, something like :
*Change production from 6,746 DigiBytes per block at time of fork to 3000 DigiBytes per block
*Change reduction from 1% per week to 0.5% per week.
This only an estimation, and probably theres is a much more proper solution... but I let experts doing it, i'm not one of them
And maybe will I be the only one to think like this. Let me hear your what do you think about all this.
tax. "gambling tax"
