Does this mean that the incentive to mine has now decreased? Or perhaps that transaction fees will increase to preserve the existing incentive?
Bitcoin block reward is halving in less than 2 hours
11–20 of 26 posts
Re: Bitcoin block reward is halving in less than 2 hours
#12The site says that 75% of all bitcoins have already been mined. I understand that it will become more and more difficult ensuring that the amount of money will continue to increase. However, I remember that I once read that bitcoins can only be split into so many "pieces" which wouldn't be enough to provide a sufficient amount of money for the economy to function. Does anyone know more? Edit: found the answer: The pr…
It will not become "more and more difficult ensuring that the amount of money will continue to increase". The amount of money will not increase at all, period, past the designed-in limit of 21,000,000 total bitcoins. There is no ensuring anything, the rate of creation of new bitcoins was programmed in from the start and cannot be changed.
Most hardcore bitcoiners seem to subscribe to a macroeconomic theory that holds that allowing a Government entity to create more of a currency is a bad thing, and that the economy would be better off if the amount of currency in circulation was fixed by external factors.
I find more persuasive the theory that the total value of economies tends to naturally grow, and the total value of currency in circulation must increase at a controlled rate to create a small but positive inflation in order to have a stable economy. When there are artificial limits on the creation of currency, the value of goods created by the economy grows, but the total currency in circulation does not, so you get deflation, which slows spending and investment, and shrinks the economy again.
Re: Bitcoin block reward is halving in less than 2 hours
#13The site says that 75% of all bitcoins have already been mined. I understand that it will become more and more difficult ensuring that the amount of money will continue to increase. However, I remember that I once read that bitcoins can only be split into so many "pieces" which wouldn't be enough to provide a sufficient amount of money for the economy to function. Does anyone know more? Edit: found the answer: The pr…
The smallest transmissible unit of Bitcoin is the "satoshi", which is one hundred-millionth of a Bitcoin. However, if the value of one satoshi ever grew large enough that people wanted to subdivide it, it'd be possible to migrate to a smaller division by consensus, by adding support in miners and clients, advertising that support without using it, and migrating when enough of those advertised the support.
That's a pretty big "if." There is currently a crisis over block size that has failed to reach any consensus. It's unlikely that any fundamental feature of Bitcoin will ever be allowed to change.
Re: Bitcoin block reward is halving in less than 2 hours
#14Earlier quoted context omitted.
A single bitcoin can be split infinitely -- it's just a matter of adjusting the number of decimal points. Currently, a satoshi amounts to a millionth of a Bitcoin. If a Satoshi becomes more valuable, there may be more decimal points added.
Is this statement correct? What's the point of a limited number of coins, if they can be split infinitely? That's no different than the government printing money.
I don't think it's currently correct (there's a base unit, but I don't know if it's that's hard limit or if it can be changed in future versions), but the difference is that when the government prints money, they get the money. The government printing money would be like someone issuing more bitcoins that don't already belong to anyone. Splitting up bitcoins doesn't change the fraction of all bitcoins that each person owns.
Plus, they're already "split up" as it were, it's just they're not valuable enough that people are using nanobitcoins or anything like that. It's only when the value of the currency goes up that people will do transactions in smaller fractions of a bitcoin.
Re: Bitcoin block reward is halving in less than 2 hours
#15The site says that 75% of all bitcoins have already been mined. I understand that it will become more and more difficult ensuring that the amount of money will continue to increase. However, I remember that I once read that bitcoins can only be split into so many "pieces" which wouldn't be enough to provide a sufficient amount of money for the economy to function. Does anyone know more? Edit: found the answer: The pr…
Each bitcoin can be theoretically split into 100 million Satoshis (the bitcoin equivalent of a penny I guess). The maximum number of bitcoin that can exist given the current system 21 million. Those multiplied together seem to me sufficient for any economy (about 12x the total amount of US currency in circulation if you count a satoshi as a penny), but someone who knows more about economics would have to chime in for…
>> if you count a satoshi as a penny
But... looks like today it is more like 2,000 satoshis per penny, pretty big difference?
Re: Bitcoin block reward is halving in less than 2 hours
#16The site says that 75% of all bitcoins have already been mined. I understand that it will become more and more difficult ensuring that the amount of money will continue to increase. However, I remember that I once read that bitcoins can only be split into so many "pieces" which wouldn't be enough to provide a sufficient amount of money for the economy to function. Does anyone know more? Edit: found the answer: The pr…
It will not become "more and more difficult ensuring that the amount of money will continue to increase". The amount of money will not increase at all, period, past the designed-in limit of 21,000,000 total bitcoins. There is no ensuring anything, the rate of creation of new bitcoins was programmed in from the start and cannot be changed. Most hardcore bitcoiners seem to subscribe to a macroeconomic theory that holds…
> The amount of money will not increase at all, period, past the designed-in limit of 21,000,000 total bitcoins.
Only if no majority (of hashing power) decides to change this "limitation".
EDIT: Or if there are sufficiently many people who want more bitcoins they might even consider a fork of the Bitcoin blockchain without having a majority of hashing power.
Re: Bitcoin block reward is halving in less than 2 hours
#17Earlier quoted context omitted.
It will not become "more and more difficult ensuring that the amount of money will continue to increase". The amount of money will not increase at all, period, past the designed-in limit of 21,000,000 total bitcoins. There is no ensuring anything, the rate of creation of new bitcoins was programmed in from the start and cannot be changed. Most hardcore bitcoiners seem to subscribe to a macroeconomic theory that holds…
> The amount of money will not increase at all, period, past the designed-in limit of 21,000,000 total bitcoins. Only if no majority (of hashing power) decides to change this "limitation". EDIT: Or if there are sufficiently many people who want more bitcoins they might even consider a fork of the Bitcoin blockchain without having a majority of hashing power.
No, hashrate majority can only introduce "soft" restrictions, not remove any hardcoded ones.
Increasing the supply will fork them off into a separate chain incompatible with the majority of users.
Re: Bitcoin block reward is halving in less than 2 hours
#18Earlier quoted context omitted.
A single bitcoin can be split infinitely -- it's just a matter of adjusting the number of decimal points. Currently, a satoshi amounts to a millionth of a Bitcoin. If a Satoshi becomes more valuable, there may be more decimal points added.
Is this statement correct? What's the point of a limited number of coins, if they can be split infinitely? That's no different than the government printing money.
You don't get more pizza when you slice it in smaller pieces.
Re: Bitcoin block reward is halving in less than 2 hours
#19Earlier quoted context omitted.
> The amount of money will not increase at all, period, past the designed-in limit of 21,000,000 total bitcoins. Only if no majority (of hashing power) decides to change this "limitation". EDIT: Or if there are sufficiently many people who want more bitcoins they might even consider a fork of the Bitcoin blockchain without having a majority of hashing power.
No, hashrate majority can only introduce "soft" restrictions, not remove any hardcoded ones. Increasing the supply will fork them off into a separate chain incompatible with the majority of users.
> No, hashrate majority can only introduce "soft" restrictions, not remove any hardcoded ones.
If there really is a strong wish from the majority to increase the maximum number of bitcoins, I see no technical reason why one couldn't implement a solution on the blockchain for this. Just, say, introduce some marker in the block indicating that this block follows a new block format that allows larger coin numbers than the existing hardcoded limit. Probably reading such a block would not be possible using a "classic" client. I can even imagine that lifting the hardcoded limit could be possible without making the blocks invalid to "classic" clients, but this would involve more work (for ane explanation of how this might be implemented I would have to research into the block format).
Re: Bitcoin block reward is halving in less than 2 hours
#20Earlier quoted context omitted.
No, hashrate majority can only introduce "soft" restrictions, not remove any hardcoded ones. Increasing the supply will fork them off into a separate chain incompatible with the majority of users.
> No, hashrate majority can only introduce "soft" restrictions, not remove any hardcoded ones. If there really is a strong wish from the majority to increase the maximum number of bitcoins, I see no technical reason why one couldn't implement a solution on the blockchain for this. Just, say, introduce some marker in the block indicating that this block follows a new block format that allows larger coin numbers than t…
That's why there's a version tag in blocks. This would be a hardfork event where all clients must switch simultaneously to the new block format and rules.