I think it would have to be set so day and night cycles are on the same schedule for everyone. The whole cycle would have to only take about two hours maybe an hour to give everyone the same amount of opportunities to experience the specific cycle events.
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Longer than an hour, I would presume. I was honestly imaging a 4 hour cycle, with one hour for each period of the day. You could even make it longer, with an 8 hour cycle. I think that two hours would be too short, and would make certain activities difficult, like hunting bugs that only appear at certain times(if that was implemented)