There's a way simpler endgame: We hit the peak of the bubble and people start pulling money out and it unwinds in a systemic bank panic.
That is possible, but it's also possible for any store of value , gold , fiat, stocks..
BTC Endgame
241–250 of 278 posts
Re: BTC Endgame
#242Earlier quoted context omitted.
There is no strict technical limit on the number of transactions per block. Due to the rising price, each block is currently worth something like $350k. The Bitcoin network rules restrict it to a couple thousand transactions per block. Even with that, each on-chain transaction would "only" need to cost $100 or so to replace the block reward. Infeasible for micropayments, perfectly fine for large scale settlements. An…
A million transactions per block would increase the block size to a Gigabyte or so. That means the blockchain grows at 52TB a year, significantly increasing the cost of maintaining a full node. But even that is really not fully taking into account how expensive transactions would be. The current Bitcoin block size and block rate and transaction size limit the network to 7 transactions per second. There are over 7 bil…
If there were a million transactions per block (every 10 mins,) there would be a lot more than 7 per second.
Re: BTC Endgame
#243The linked Medium posts have a bit more content https://joekelly100.medium.com/how-to-kill-bitcoin-part-1-is... Note that this is from last July, when the price of BTC was significantly lower and thus the price of the attack is likely higher now. That said, this becomes more feasible in the long-run when mining is purely funded by transaction fees. Something I don’t see talked about much is the fact that, although Bi…
I always wondered about that and perhaps someone here can explain. After bitcoin reaches its "full" volume, mining rewards will go away and the only way miner income can stay the same is if transaction fees rise to match. Since the competition of miners basically converges to "block reward is equal to electricity cost equivalent", this would mean transaction costs increase to an insanely huge amount. Not paying the l…
Block rewards are designed finite but also designed to end outside most peoples lives. So in short no one needs a solution. Block reward of 0 theoretically would be reached in 2140. Of course earlier halving will already have a similar effect BUT ONLY if the price does not at lest double every halving (4 year). Essentially this means bitcoin will allays run on inflation. The finite supply is a "lie" that just doesn't work the same way if the price per unite can simply multiply. You constantly add a smaller fraction of the total but suck out more and more value anyway. mining has never become cheaper if price/hash drops it just raises the hashing required to mine.
The people who hold BTC but dont use it pay (via inflation) for thous who use it so they have cheaper (still laughably expensive) transactions. They just dont care about that as long as price gains far outperform the inflation loses.
At some point it has to crash and wont recover because double-spends happened and the network can no longer be trusted which renders it useless. If the price (real world purchase power not the price in USD) doesn't multiply for more than 4 years... the end is near. Likely the end would come before the 4 years are over. historically hash rate drops the most 1-1.5 years before halving in sync with the price. it basically boils down to how good large miners are at managing risk. they need to have the money to keep mining while its not profitable. if a large player goes bankrupt it could create a chain reaction crashing the whole thing.
BTW, next generation blockchains like the XRPL have solved all of theses problems a long long time ago. The lead dev (ex btc dev) saw these problems ~10 years ago and it took them 1-2 years to come up with something better.
Re: BTC Endgame
#244Earlier quoted context omitted.
Uh, no, other countries don’t have 65% of the hashing capacity. The USA could put a gun to miners heads, but it wouldn’t give them 51%, so there’s no point.
For all we know, the NSA has a ton of secret miners it could switch on suddenly to launch a 51% attack. Prove me wrong . (ok this is the stuff of conspiracy theories but it's still a possibility, isn't it?)
Well I guess the question is, if the US govt (or any other superpower) felt it was in their interest to take over / destroy the blockchain, would they be able to?
It seems to me if Bitcoin got to be of huge strategic importance to global finance, countries like the US would start to build out that power. The idea that the economy of say the US was at the mercy of other foreign governments would probably not sit well.
This applies to all large powers just using the US as an example.
Re: BTC Endgame
#245Earlier quoted context omitted.
You vastly overestimate the command and control capability of China. China and Chinese people are not a Borg.
How? Their whole apparatus has been built for that
Keeping your head down and actively agreeing with governmental policies are two different things.
As things are now, people from authoritarian countries are really, really good at the former.
Re: BTC Endgame
#246>There is currently no defense for this attack in Bitcoin, as the simulation demonstrates. The entire Bitcoin miner reward model is the defense for this attack. Nation states have powerful computers... but nowhere near as powerful as the decentralized Bitcoin mining network combined. Even if they did currently, the endgame for Bitcoin as envisioned by Satoshi Nakamoto was for everyone on the planet to be mining Bitco…
I think eventually it will be nation states that bring the endgame, on national security grounds, through regulation.
Looking mostly at the US here. It is highly unlikely the government will sit by and watch trillions of US capital flowing into a Chinese-controlled infrastructure, undermining their reserve currency status.
Also worth mentioning that the US has leverage over the entire world’s banking system, that is how they enforce sanctions. Cutting the link between crypto and major currencies would qualify as an endgame.
Re: BTC Endgame
#247Earlier quoted context omitted.
I always wondered about that and perhaps someone here can explain. After bitcoin reaches its "full" volume, mining rewards will go away and the only way miner income can stay the same is if transaction fees rise to match. Since the competition of miners basically converges to "block reward is equal to electricity cost equivalent", this would mean transaction costs increase to an insanely huge amount. Not paying the l…
It's an unsolved problem, and all solutions would require a majority of the mining pool to get on board. You could periodically increase the block size, splitting the transaction fee among more transactions. Although larger blocks make it more difficult to produce hashes, so more power would be consumed, thus increasing the transaction fees further. You could change the block reward such that there's a larger block r…
> You could periodically increase the block size
It's unclear if that would solve the problem. If BTC becomes a global store of value (which it seems to be in the process of), the avg. transaction value goes up and with it the fees that can potentially be paid. The block size cap ensures that there is a fee market if there's enough demand for transactions, so that not everyone simply pays the minimum fee. If you increase the cap this market might disappear and leave miners with _less_ income.
> The cap of 21 million bitcoin isn't a fundamental unit, it can be changed if a majority of the mining pool decides to.
No.
1. It is one of _the_ fundamental selling points of BTC. 2. A miner majority isn't sufficient to force such changes, the mined blocks would simply be invalid for any validating client. So you need to get users on board too.
I think the solution will be L2/L3 transactions for payments and L1 transactions for settlement and large transfers, so that each L1 (=on the blockchain) transaction has enough economic value to afford high fees.
Re: BTC Endgame
#248I think under these circumstances, the economic majority of bitcoin users will fork to use, eg a new hash algorithm, rendering the seized mining farms useless. Remember, bitcoin is a collective trusted network based on agreement between users, miners and developers. If the miners turn, just switch to a set of new miners. You mention that this wouldn't work in your article. Can you explain why?
No or flawed governance in bitcoin, check decred
Re: BTC Endgame
#249Earlier quoted context omitted.
For small scale miners in China it might be a different story. However, if Xi Jinping decided to crush Bitcoin for whatever reason large scale mining in China, which is well past 50%, would quickly do what he wanted. As such he has de facto control over Bitcoin, though I personally doubt it’s something he would do.
why do you expect that? you're talking about tens of thousands of individuals and companies, all themselves invested in bitcoin, being asked (through no existing command or enforcement mechanism) to essentially destroy their own personal wealth. even assuming the chinese state could achieve compliance from 77% of the existing hardware, it would optimistically take several days. the only way around that stumbling bloc…
Remember, China is a country with concentration camps, so they (the CCP) clearly have the ability and desire to do extreme things and convince their people it's the right thing or that it's not happening.
Re: BTC Endgame
#250Earlier quoted context omitted.
For small scale miners in China it might be a different story. However, if Xi Jinping decided to crush Bitcoin for whatever reason large scale mining in China, which is well past 50%, would quickly do what he wanted. As such he has de facto control over Bitcoin, though I personally doubt it’s something he would do.
why do you expect that? you're talking about tens of thousands of individuals and companies, all themselves invested in bitcoin, being asked (through no existing command or enforcement mechanism) to essentially destroy their own personal wealth. even assuming the chinese state could achieve compliance from 77% of the existing hardware, it would optimistically take several days. the only way around that stumbling bloc…
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