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Mining is what will ultimately make Bitcoin fail. You want to give everyone a single vote so that the majority can agree on which transactions are valid and which are not. But because you don't want a central authority that checks ID documents you come up with the idea of mining - make having a vote in the Bitcoin network an expensive thing by requiring to buy hardware and then spend more money on electricity to keep…
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Where do you get 150 000 kW? Even assuming all the miners are the best I could find (Achilles lab series) [1] that comes to 190000kW based on current hashrate [2]. Your transactions/second is also bit off. Right now based on blockchain.info the highest transaction day had 115787 transactions [3]. And that day the backlog of unconfirmed transactions got as high as almost 6000 unconfirmed transactions [4]. It doesn't m…
The network never "choked" at 1.3tps. There are peaks of activity near the theoretical max of 7 tps (check for blocks close to 1MB in size). There are thousands of unconfirmed transactions because their senders chose to include fees that are too low (or no fee at all), so miners decide to not process them. > When new coins are no longer being awarded to miners then people will have to start to pay the transaction fee…
People do not include enough transaction fee. I just clicked open a block with most transactions on the recent list on blockchain frontpage https://blockchain.info/block/000000000000000017f4d893e29b1e...
+.1715506 worth of transaction fees. That's by far not enough to support a decent mining rate. In order to support current mining rate a single block must have roughly 25BTC wort of transactions fees.
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No, there is no other fee except the standard one. So if some miners aren't happy with that, they will quit. It's a self-correcting system.
You are missing the point. Right now you are getting 25 BTC for mining a block, but that block reward will drop to zero while the costs for processing a transaction will remain more or less the same. Therefore transaction fees will have to go up until they cover the transaction costs without subsidizing them with the block reward. The other alternative, lowering transaction costs, is not a real option because it woul…
No, you're missing the point. If your narrative were true, we would see fee increases after every reward drop. Never happened.
This is how it actually works: reward drops -> unhappy miners quit -> difficulty drops -> cost per transaction drops.
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You are missing the point. Right now you are getting 25 BTC for mining a block, but that block reward will drop to zero while the costs for processing a transaction will remain more or less the same. Therefore transaction fees will have to go up until they cover the transaction costs without subsidizing them with the block reward. The other alternative, lowering transaction costs, is not a real option because it woul…
> but that block reward will drop to zero while the costs for processing a transaction will remain more or less the same No, you're missing the point. If your narrative were true, we would see fee increases after every reward drop. Never happened. This is how it actually works: reward drops -> unhappy miners quit -> difficulty drops -> cost per transaction drops.
Mining is what will ultimately make Bitcoin fail. You want to give everyone a single vote so that the majority can agree on which transactions are valid and which are not. But because you don't want a central authority that checks ID documents you come up with the idea of mining - make having a vote in the Bitcoin network an expensive thing by requiring to buy hardware and then spend more money on electricity to keep…
That's not how Bitcoin works, although I admit it is plausible that you were describing how you would like Bitcoin to work. There's no "vote" in Bitcoin. Instead, there's a set of rules for determining whether or not a transaction is valid. Also, the distribution of hash rate does not necessarily have any relationship to the number of unique participants.
Mining is what will ultimately make Bitcoin fail. You want to give everyone a single vote so that the majority can agree on which transactions are valid and which are not. But because you don't want a central authority that checks ID documents you come up with the idea of mining - make having a vote in the Bitcoin network an expensive thing by requiring to buy hardware and then spend more money on electricity to keep…
> You want to give everyone a single vote so that the majority can agree on which transactions are valid and which are not. That's not how Bitcoin works, although I admit it is plausible that you were describing how you would like Bitcoin to work. There's no "vote" in Bitcoin. Instead, there's a set of rules for determining whether or not a transaction is valid. Also, the distribution of hash rate does not necessaril…
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> but that block reward will drop to zero while the costs for processing a transaction will remain more or less the same No, you're missing the point. If your narrative were true, we would see fee increases after every reward drop. Never happened. This is how it actually works: reward drops -> unhappy miners quit -> difficulty drops -> cost per transaction drops.
There was only a single drop from 50 BTC to 25 BTC so there is no basis for your claim. And it can not work the way you describe. With 100k transactions per day and $0.10 fees per transactions miners can collect 3.65 million Dollars per year. So everyone with a handful million dollars to spare can easily completely destroy the Bitcoin network. Even better, there are already people with a lot of mining hardware out th…
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There was only a single drop from 50 BTC to 25 BTC so there is no basis for your claim. And it can not work the way you describe. With 100k transactions per day and $0.10 fees per transactions miners can collect 3.65 million Dollars per year. So everyone with a handful million dollars to spare can easily completely destroy the Bitcoin network. Even better, there are already people with a lot of mining hardware out th…
And did the fee go up after the drop? That's right, there's no basis for your claim.
But I really don't understand what you are arguing for. Once the block reward becomes mostly irrelevant you have essentially two choices - relatively expensive transactions or a weak network, i.e. low hash rate. Don't you agree with that?
[1] https://blockchain.info/charts/transaction-fees?showDataPoin...
[2] https://blockchain.info/charts/network-deficit?timespan=all&...
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> You want to give everyone a single vote so that the majority can agree on which transactions are valid and which are not. That's not how Bitcoin works, although I admit it is plausible that you were describing how you would like Bitcoin to work. There's no "vote" in Bitcoin. Instead, there's a set of rules for determining whether or not a transaction is valid. Also, the distribution of hash rate does not necessaril…
If you are building a system based on consensus you want to give everyone a single vote to vote for what is valid and what is not. But because Bitcoin doesn't want a central authority there is no easy way to ensure this by checking ID documents or something similar. Therefore everyone can create as many fake accounts as they want and let them vote for whatever they like. Bitcoin's solution to prevent everyone from ca…
I have some nitpicking to offer. I strongly disagree about the existence of any "fake accounts". All accounts are real accounts, even if they are being used in a Sybil attack. Arguably, the Bitcoin protocol should not care whether or not a block was generated by a "fake" account or not. Proof-of-Work as you acknowledge is critical for implementing distributed consensus in Bitcoin, but PoW has nothing to do with fake account prevention (and also, mining doesn't prevent non-miners from generating public or private keys anyway).
As for votes, I think calling it a vote is skating on ice too thin.... I ran into someone recently that also thought it was based on voting, but then it turned out that he was reading from something about PoS, which is not involved in Bitcoin's consensus mechanism.
Earlier quoted context omitted.
If you are building a system based on consensus you want to give everyone a single vote to vote for what is valid and what is not. But because Bitcoin doesn't want a central authority there is no easy way to ensure this by checking ID documents or something similar. Therefore everyone can create as many fake accounts as they want and let them vote for whatever they like. Bitcoin's solution to prevent everyone from ca…
Sounds like you get it. I have some nitpicking to offer. I strongly disagree about the existence of any "fake accounts". All accounts are real accounts, even if they are being used in a Sybil attack. Arguably, the Bitcoin protocol should not care whether or not a block was generated by a "fake" account or not. Proof-of-Work as you acknowledge is critical for implementing distributed consensus in Bitcoin, but PoW has…
Forget about Bitcoin for the moment. We build a new distributed currency. You can sign up for an account and with that account you get one vote to vote for (blocks of) transactions you consider valid. But because there is no central authority performing identity checks the bad guys can just create a million accounts and use them to vote for bad (blocks of) transactions. This is what I previously called fake accounts - several accounts by one person to vote for bad (blocks of) transactions.
And now back to Bitcoin. Bitcoin's solution to this problem is mining. A vote in the Bitcoin network is a mined block and because mining is expensive this prevents users from casting arbitrarily many votes which is the logical equivalent of a fake account prevention mechanism. It is not perfect because with enough money for hardware and electricity you can still obtain more votes than others but it is no longer as easy as signing up for a million accounts with a million different email addresses.
I hope this helps clarifying my point.