Title: Gradual Changing Block Rewards
Author: Slim Pickens
Type: Standards Track
This BIP proposes for block rewards to decrease more frequently.Motivation
Every four years the block reward for bitcoin is cut in half. There is much uncertainty surrounding bitcoin prices and total network hashing power before and after these reward reductions. This author feels very confident that bitcoin will traverse its first block decrease with success; however, months before and after will be full of large price swings with a potentially modest decrease in global hash rate. Stability has yet to be one of Bitcoin’s virtues; yet, many hope (including the author) that this will change over time. The goal of this BIP is to avoid the frenzy in price fluctuations and global hash rate during these rare events by making them much more frequent with smaller decreases. Specification
Block rewards will begin decreasing every two weeks starting at the end of the second year of the 25 BTC block reward (What’s the specific block number?). (Note: How frequent the changes are and when it goes into effect are open for debate). Unfortunately, this author is not into coding Bitcoin so the details of this BIPs implementation will rely on feedback from experienced Bitcoin programmers. Variables:
• Frequency of bitcoin decreases (Initial proposal is for every two weeks)
• Date, more specifically the Block #, at which these smaller more frequent decreases take effect. (Initial proposal is for this BIP to take effect at the end of the second year of 25 BTC rewards)
• The Percent of the decrease. Need to find a percentage that will in effect release the same amount of coins over the long term as the original block reward system.Rationale
Two weeks were chosen for the frequency of decreases because it coincides with the difficulty adjustment. Seems like a good idea to do them together. However, this is not critical for the success of this BIP. Depending on the general consensus from the Bitcoin community and the simplicity of coding implementation, this may change.
The date for the change is proposed at the end of the second year of the 25 BTC block rewards. This gives the community 6 months to observe the market behavior of the initial block decrease and have a software implementation 18 months prior to the change going into effect. Again, depending on the general consensus from the Bitcoin community and the simplicity of coding implementation, this may change.
Based on Moore’s law and the history of computing innovation, it is commonly quoted as 18 months for computing power to double. 18 months should be enough time for miners to adjust their capital strategy before this BIP goes into effect. It will also give the community plenty of time to adopt the new code.
The implementation of this BIP would be a huge win for the bitcoin community. There are many articles written why Bitcoin is “fatally flawed”. They gloss over the fact that the brilliance and innovation of this new currency is in its decentralization and the fact that it is democratically governed. This system doesn’t have the flaws of other democratically governed bodies because there are no laws in effect that force anyone to use it. It is simply by free choice; therefore, no one would advocate changes to favor a few because it would self-destruct the currency. The implementation of this BIP would be a shining example that when problems arise the community will deal with it in way that will cause the currency to continue to excel. In other words, all supposed fatal issues are really non-issues. When the timing is right, mass consensus will be reached and they will be fixed.
Edit: 03/22/2012 ~~~~~~~~~~~~~~~~~ Comment added below ~~~~~~~~~~~~~~~~~~~
Appreciate everyone's comments even if they totally disagree. I would like to continue to push to get this published in the WIKI BIP. Doesn't mean it will be adopted. I just want to make it an official record of what is possible and not possible with Bitcoin.
Before doing so, I would like to kindly request that you humor me and this BIP "as if" it was going to be adopted
and help me nail down all 3 variables and hold off from commenting on its feasibility.
Please comment on the following:
2)Block # of implementation
Also, what if we rounded the block reward after each decrease to four significant digits? Any thoughts.
Other request for help:
Graphs of Bitcoin curve over time compared to the original.
Graphs of the injection rate over time compared to the original.
Psuedo code for the implementation.
Edit: 04/02/2012 ~~~~~~~~~~~~~~~~~ Comment added below ~~~~~~~~~~~~~~~~~~~
Alright. The key factors of this BIP have been improved and finalized.
The frequency of change is Every Block
The Change will occur on block 315000
(Block count starting at 0)
percent decrease: 0.00031746 %
Over 100 years, the original will have approximately
injected a few bitcents more than the proposed improvement.
However, these small details will be worked out during the implementation of the code. What's important is the amount injected
is approximately the same or a few satoshis less than the original.
Again, all comments are appreciated and so far I've observed a lot emotional response.
That's ok. It's all part of reveling what it will take to get a well crafted IMPROVEMENT
adopted by the majority.