Impact of recent Dogecoin halving

Dogecoin block rewards halved on the 28th of April 2014. The payout was reduced from 250,000 coins to 125,000 coins per block. In the meanwhile, 10,000 more blocks have been added to the blockchain. Using this data, it can be observed how this has impacted Dogecoin mining.

Data and methods

The dataset consists of Dogecoin block 190,000 to block 210,000, 10,000 blocks before and 10,000 blocks after the halving became effective at block 200,000. The datafile (available here) contains information on each block’s difficulty and the time required to solve the block (derived from the block’s timestamp). The time required to solve a block has a lower bound of -60 seconds and an upper bound of 300 seconds, this should be in line with the Dogecoin algorithm and is meant to limit excesses. The target solving time for a single block is equal to one minute.

Pre-halving

From the data before the halving, a few remarkable points can already be addressed. In an earlier post, it was concluded that Wafflepool was the biggest winner of Dogecoin 1.6. This seems to have remained stable over the entire period before the halving. The coin-switching (scrypt) mining pool even has a relatively larger share of all blocks than it had when Dogecoin 1.6 was released. Looking at the average difficulty of the blocks mined, and the related time to mine a block, it can seen that Wafflepool has retained its successful strategy throughout. Second, even though CleverMining did not get as many blocks, it does succeed in getting a significant portion of all blocks, at even half the average time required to mine a block by Wafflepool. Lastly, compared to earlier analysis, DogeHouse does not play a significant role anymore in mining Dogecoin following its breakup. There are no obvious dedicated Dogecoin miners present at all anymore, although pools like MultiPool do offer a dedicated Dogecoin pool. The numbers are summarized below:

Mining before halving

After halving

Of course, the main question is how the halving has impacted the previous data. An obvious consequence is a lower average difficulty per block on the total level. Less coins per block automatically causes less profitability for miners. If miners choose to mine another coin, it will reduce the total network hashrate. If the hashrate drops, it should result in a lower difficulty on average. It can also be observed that less coins per block is hardly an incentive for Wafflepool to target other coins. Its share of all blocks mined has not decreased by more than 15 percent. This is probably because it is very efficient at block mining; its average time to mine a block has even dropped by 10 seconds. CleverMining sees its share reduced by around 40 percent, although these are still mined in very low times on average (even dropping a few seconds more). Overall, the biggest winner (relatively) seems to be MultiPool. In terms of blocks mined, its share increases by more than 30 percent, while reducing the time required to mine a block at the same time.

Mining after halving

Final comparison

Combining the previous two tables, it can be determined how fast pools (with an average time to mine a block less than 60 seconds) compare to relatively slow pools (with an average time to mine a block more than 60 seconds). On a total level, the average block time does equal about one minute in line with the target time, but there are big differences between various pools as shown by the previous tables. The following comparison between the two groups shows that mining has been faster for everyone, but mainly the fast pools have been getting even faster. In other words, they succeed in even more efficient mining. This is confirmed by the stronger relative drop in average difficulty of blocks solved by the fast pools. On a positive note, the slower (dedicated) pools do get a bigger share of all coins, as some switching pools seem to have changed their preferences. But overall, the halving has not made Dogecoin as unattractive to switching pools as hoped by the community. They still mine over 400 million coins in 10,000 blocks, although this is a lot less than the 900 million coins before the halving.

Changes due to halving

One Response

  1. dogeconomist_reader May 11, 2014

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