191–200 of 232 posts
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The last BTC mined will be 2140, but the decay is exponential. The reward will halve in about 3 years, and it is likely to halve again 4 years after that, and so on.
But price appreciation is also exponential
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But price appreciation is also exponential
That can’t stay that way, at least not in real terms (taking inflation into account)
A money supply that grows more slowly than the economy that rests on top of it just might be the stuff that Malthusian dreams are made of.
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The whole economy depends on people spending. If everybody starts to hoard currency, economy will implode. That's why deflation is worse than (light) inflation, from an economic standpoint.
The idea that when purchasing power increases people spend absolutely nothing is the basis if this rationalization for inflation, and it isn’t supported by logic or experience. They actually spend more and more productively, because instead of barely getting by they are able to accumulate capital and start businesses.
That's not necessary. Simply reducing spending to the bare minimum possible is enough. Humans don't need that much to survive.
>They actually spend more and more productively, because instead of barely getting by they are able to accumulate capital and start businesses.
Well, first of all, why would you start a business if your money works for you? It would be a waste of money. Secondly, if everyone is starting their businesses instead of buying things then who is going to buy the things those businesses provide? Nobody? Isn't an oversupply of goods just going to drive prices even lower, causing companies to close down? Would you really risk starting a company when you know that in the future your potential income will be even lower than today?
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It's supported by both logic and experience. It's easy to see logically if we flip the relationship. If house prices are steadily increasing (equivalent to inflation, where my purchasing power is decreasing), I want to convert my money into a house as quickly as possible. If house prices are decreasing (equivalent to deflation, where my purchasing power is increasing), I want to hold off as long as possible. In recen…
Sounds good to me, if you don‘t buy the house because your money is not devalued consistently. House buyers might actually get more use out of it than holding their money, instead of just (or in part) buying it for monetary reasons
If the value of houses goes down over time then people will stop building houses. Housing can easily last decades or centuries if done properly. By the time the problem grows to become unsurmountable you might find that all the construction workers and companies are gone. That's what happened with the nuclear industry. You run a plant for 50 years until people retire all at once then you suddenly have to train thousands of new workers since you failed to maintain the industry.
This is a fundamental problem with providing food. Most food has to be eaten within weeks after the harvest. This means that you must ensure that at all times there are people farming for food. It's not possible to save it for decades or at least people don't want to eat 10 year old food (there are companies that specialize in prepper food). So ultimately, you need to keep the farms going all the time. How can you tell them to keep going if the price of food is going down... forever?
This is the first interesting paper I see here on HN about Bitcoin. While many people think that Bitcoin's energy usage is too high, I honestly hope that it's high enough to deter a nation state sized attacker. Many Bitcoiners argue that miner rewards shouldn't decrease more, but at the same time it's too late to change the concensus on it.
Someone made a comment the other day stating that a 50%+1 attack is more and more likely as it's becoming only a handful of people doing the mining.
But. A 50% attack has the problem that an attacker with enough hash power to do it has enough hash power to simply mine on chain legitimately and create blocks and get 50% of the block reward and make tons of money that way, while actually doing the attack decreases confidence in the chain and might end up with massive losses in price.
One of the assumptions the authors make in this paper is that miners can turn their hardware on and off quickly, and that they will benefit financially for doing so. Mainly by paying lower electricity bills. It turns out the really big miners don't pay for electricity the same way you or I do. Big miners sign long term contracts for continuous consumption of energy, and don't save any money for turning mining hardwar…
As a tangent, I wonder if Bitcoin mining could re-ignite the nuclear power industry. Nuclear power plants involve a high upfront capital cost, then produce a long-life of fixed electricity output at near-zero marginal cost. My understanding is that one reason more plants were built in the 60s was because electricity prices were fixed by regulators. That made financial modeling easier, because investors could legibly…
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"Citation needed" I literally just explained it to you. The price of BTC has always been highly unstable. There is absolutely no evidence it will ever be stable, to the contrary in fact, all evidence points to the fact that it will remain unstable. Every single commodity or currency extant to an economy is unstable relative to the currency of that economy. The only thing 'stable' in terms of USD are things closely ti…
"Financial Services are an entire industry. Lending, transactions, authorizations, contracts, accounting, risk management, asset allocation, it's a gigantic industry." Right, this is all on ethereum
Etc, etc. etc?
The complete lack of understanding of anything financial postulated by the crypto crowd is really painful.
The notion of 'crypto' is actually interesting, and large swaths of the financial world would actually buy into it, but most of it makes no sense unfortunately.
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It's impossible to predict the future. If everyone holds bitcoin as a store of value then the value should drop as it's not being used for anything one would think. I believe the best outcome is that people start using bitcoin for every day purchases and the hope is that by 2140 the price is relatively stable. Most likely there will be many large holders as there are with real money. However, someone could maybe do a…
Or maybe there's a foreseen flaw in bitcoin. It's based on public-key cryptography which can be broken by quantum computers. Those don't exist yet (at least not in any form relevant to cryptography in practise), but I think they will by 2140.
If the sha-256 algorithm was cracked such that BTC blocks could be solved instantly, the existing miners would have to choose between:
1. No more income, or
2. Adopt a quantum-resistant protocol.
Market economics being what they are, I think it's safe to assume that BTC would survive the "quantum apocalypse." There's too much money at stake for any other choice to be the logical outcome.
One of the assumptions the authors make in this paper is that miners can turn their hardware on and off quickly, and that they will benefit financially for doing so. Mainly by paying lower electricity bills. It turns out the really big miners don't pay for electricity the same way you or I do. Big miners sign long term contracts for continuous consumption of energy, and don't save any money for turning mining hardwar…
As a tangent, I wonder if Bitcoin mining could re-ignite the nuclear power industry. Nuclear power plants involve a high upfront capital cost, then produce a long-life of fixed electricity output at near-zero marginal cost. My understanding is that one reason more plants were built in the 60s was because electricity prices were fixed by regulators. That made financial modeling easier, because investors could legibly…
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I see what you're saying. Forgive my choice of wording. Perhaps "equitable" wasn't the correct choice. I more meant whether it will become a currency of the people. Or a store of wealth for the average person. I'm looking at this through an African lens. Bitcoin showed a lot of promise for cheap and reliable remittance payments and one day a fully fledged currency for the masses. Gave us Africans lots of hope in many…
It's ironic. Bitcoin can only keep going up if it becomes more accessible and more people use it. Yet people resist making it more accessible. It's like they are betting on a failing technology stack that will blow up after x amount of users.
Keep in mind as well that the protocol is mutable as long as people agree to change it.
Saying BTC is doomed to fail as it's living alongside a multitude of other cryptocurrencies that attempt to solve its shortcomings is also a dubious proposition to me. Take for example the Mina Protocol[0], which eschews proof of work, huge blockchains, and slow transaction speeds for solutions built on top of zk-SNARKs.
If BTC has value as a long-term store of wealth, and if other cryptocurrencies exist to transact at faster rates with more liquid capital, and if that capital can flow between systems freely (as fast at BTC will allow), then every system is working as designed, right?