Coin Emission Reduction (CER) in Bitmark v0.9.7
1. the exertion of a modifying or controlling influence on something.
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(Definition from Oxford Languages & Google)
Bitmark is a decentralized blockchain platform that uses 8 proof-of-work (PoW) consensus algorithms to secure its network and validate transactions. In the Bitmark network, block rewards are given to miners who contribute computing power to validate transactions and add new blocks to the blockchain.
The Bitmark block reward epochs are the intervals at which the block reward for mining new blocks changes. Bitmark initially modeled it’s block reward and epoch system after Bitcoin and Litecoin, but with an additional quartering of the reward between the traditional halvings. Bitmark’s genesis block carried the initial reward of 20 Bitmarks. The first few block reward epochs and their rollover events are:
- 1st epoch, Initial block reward: 20 BITMARK tokens per block
- 2nd epoch, First quartering: 15 BITMARK tokens per block
- 3rd epoch, First halving: 10 BITMARK tokens per block
- 4th epoch, Second quartering: 7.5 BITMARK tokens per block
- 5th epoch, Second halving: 5 BITMARK tokens per block
- 6th epoch, Third quartering: 3.75 BITMARK tokens per block
- 7th epoch, Third halving: 2.5 BITMARK tokens per block
- 8th epoch, Fourth quartering: 1.875 BITMARK tokens per block
- 9th epoch, Fourth halving: 1.25 BITMARK tokens per block
In the original Bitmark mining system, epoch rollovers, defined as the change into the next block reward epoch, occurred after a specific number of blocks were added to the blockchain. However, the community adopted a fork on June 6th, 2018, which introduced three major changes to Bitmark:
- The addition of 7 more proof-of-work (PoW) algorithms to complement the original Scrypt algorithm and the enabling of merge-mining on all algorithms.
- The adoption of the Dark Gravity Wave mining difficulty regulating function.
- The implementation of the Coin Emission Modulation (CEM) algorithm to reduce block rewards, on a per PoW algorithm basis, by comparing the current hash rate of the algorithm to recent hash rate peaks.
The Bitmark Coin Emission Modulation algorithm, version 1.0, or CEM v1, affects the block reward by multiplying one half of the entire reward by the ratio of the current hash rate over the peak hash rate. The peak hash rate is the maximum of the daily hash rates observed over the past 365 days. This ratio (current / peak hash rate) is defined as the emission scaling factor, or ESF and it determines whether the block reward is reduced proportionately or given in full. If the current hash rate is at or above the peak hash rate, then the ESF is 1 and the epoch's full block reward is given. If the current hash rate is below the peak hash rate, then the block reward gets reduced proportionately until a minimum, which is 1/2 of the whole block reward for the epoch, which is always awarded in all mined blocks.
ESF = current_hash_rate / peak_hash_rate.
Block rewards are either the whole amount for the epoch or are reduced (modulated) by the ESF, as explained below:
The 720 blocks in bitmark constitute one day of time. There are 8 PoW algorithms, thus each algorithm should contribute, on average, 90 blocks per each 720 block sequence of blocks. For each algorithm, the current hash rate is defined as the average hash rate of the previous 90 blocks for a given day. The CEM algorithm finds the maximum hash rate out of the previous 365 90-block sequences and uses this highest hash rate or peak_hash_rate as the denominator of the ESF quotient. The previous day's (90 blocks of the algorithm) average hash rate is defined as the current_hash_rate and is used as the numerator of the ESF ratio. If the current_hash_rate is at or above the peak_hash_rate, then the ESF is unity, and the epoch's full block reward will be given; but if the current hash rate is below the peak hash rate, then the block reward gets reduced proportionately until a certain minimum. This minimum is 1/2 of the whole block reward. Note that at least one-half of the whole reward will always be awarded in all the blocks mined, regardless of the specific hash rate.
A trailing 1 year time frame is tracked for each algorithm, where 1 year = 365 days, each day with 90 blocks per algorithm. The maximum hash rate out of the set of 365 90-block sequences will be used as the hash rate threshold above the which the epoch’s full reward will be given on blocks mined by that algorithm.. We refer to it as a trailing 1 year time frame because for every newly completed 90-block sequence completed by an algorithm, which constitutes one more whole day, the oldest out of the previous 365 days is discarded for our calculations. We are working with a time frame of 365 days, for which every day advances by one day, forgetting the oldest day.
Bitmark tracks the hash rate for each PoW algorithm independently and sets the reward independently for each algorithm without regard to the other 7 PoW algorithms. The emission thresholds and epoch rollovers will thus be reached at different times and different block numbers for each algorithm. Each PoW algorithm is independently monitored and its reward independently calculated. Emission thresholds and epoch rollovers may (and most likely will) be reached at different times and different block numbers for each algorithm, since hash rates will naturally vary from algorithm to algorithm.
- The block set intervals for calculating the current hash rate, per algorithm are 90 of the previous 90 blocks produced by that algorithm
- To find the the peak hash rate we look back at the previous 32,850 blocks produced by each algorithm (1 year = 32,850 blocks = 90 blocks / day X 365 days.