How long will it take to discover the last bitcoin block before the halving?
Difficulty adjustments are calibrated so that, on average, each block takes 10 minutes to discover. The actual discovery time range is quite wide.
Typically, mining pools will propagate a new block immediately upon discovery, so that they can get the block reward and start on the next block. Other miners will drop work on the discovered block and immediately start on the new block so that their work is not 'wasted' if they end up on a conflicting chain.
Very rarely, some miners will not receive a propagated block and will continue searching. Sometimes they will find a new block and another will be discovered on their now parallel chain before any subsequent block is discovered on the 'original' chain. When that happens, there is a brief 'reorganization' and the newly longer chain is adopted by miners as the 'correct' chain, with the original discovered block discovered.
This is all fairly straightforward and familiar to most that have a good understanding of Proof of Work. Generally, blocks are considered 'final' after there are six blocks in sequence, as they mathematical likelihood of a reorg of more than six blocks is infinitesimally small. In practice, most don't worry about reorgs at all anymore (although some exchanges may require a transaction to 'finalize' before they will credit the deposit for trading or withdrawal).
Currently the bock reward is 6.25 bitcoin, or roughly $400,000, plus the fees from whatever transactions are included in the block. That's a strong incentive to immediately propagate new blocks as soon as they are discovered. In a few days, that reward will fall in half (thus, the 'halving' that you keep hearing about)!
I'm making a bold prediction that the last block before halving will be late. With ordinals and other NFT projects built on Bitcoin, not every satoshi is the same. The first satoshi in the first block post-halving (the first block with 3.125 bitcoin reward) is an extremely rare satoshi that could be worth millions of dollars to collectors. That disrupts the normal game theoretic outcomes around discovery times.
The game theory correct strategy is to risk not receiving the reward on the last block before halving to increase your chance of getting the first block post-halving. How does one do this?
If you are so lucky as to discover the last block before halving... do not propagate it! Instead, give yourself a headstart on finding the next block. If you have a decent portion of the total mining share, then your chance of finding both blocks in sequence without propagating increases your expected value by significantly more than you risk by not claiming the block reward on the last pre-halving block right away.
In order for this prediction to be considered accurate, the last block before halving has to be late, AND both blocks have to be discovered by the same miner.
There is also some risk that if the first post-halving block is found by a small pool, the largest pools will ignore and try to create a reorg to claim the golden sat for themselves.
What are you thoughts? Do you think any other hinky business might happen in bitcoin mining this week?
