Bitcoin : Alternative approach to Bitcoin difficulty
The current difficulty is adjusted automatically with the intent of ensuring that a new block is mined roughly every 10 minutes irrespective of the network hash rate. This is necessary to ensure transactions are always processed at a predictable rate, however I see no reason why the amount of newly minted bitcoin needs to be predictable.
What if the difficulty also adjusted the payout from mining a block, such that the higher the difficulty, the less BTC the miner would mint for themselves. This would have a downwards pressure on the network hash rate, and make it unprofitable for too many miners to participate (and therefore waste too much global energy).
I appreciate that the higher the hash rate the higher the security of the network (in theory), however given the apparent concentration of mining into a few key players, and the exorbitant energy usage of PoW, it seems a downwards pressure on the hash rate may be beneficial – at the moment it seems like an infinite arms-race, with the big weakness that there is a feed-forward cycle in that the most successful miner will earn the most and be able to reinvest that into more hardware making them more money, to reinvest into more hardware etc etc. A downwards pressure would at least slow down this cycle.
Can anyone think of anything terrible with this idea?
Bitcoin
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