Quote from: djoot on May 09, 2011, 11:28:59 PM

Quote from: creighto on May 09, 2011, 10:31:23 PM

Doubtful. At worst, half the miners will give up because they suddenly became unprofitable, and the interval between blocks would stretch to 20 minutes.

So, at worst 50% of hashing is on free electricity or are just that profitable that they can take a 50% cut in revenue? Maybe.

What did you base your estimate on?

Assuming that the trade value of a bitcoin is more or less the same on one side of the halving of the block reward as on the other, and also assuming that there is zero revenue from transaction fees in order to take the worst case scenario; the drop in the block reward from 50 bitcoin to 25 bitcoin is mathmaticly the same as a sudden doubling of the difficulty from the perspective of a miner. This is something that they are all going to know is coming from far in advance, and almost all of them will have a pretty good idea whether or not mining will still be profitable. So those that would no longer be profitable might stop, and logicly that cannot be more than half of the miners in total just before the cut. Those that remain would be profitable again by at least the next difficulty retarget.