Earlier quoted context omitted.
It's predicted to happen mid-2016, 70% of all coins to ever be mined have been so. This has been a really interesting tech to watch over the years.
What happens when we reach 100%?
Transaction fees.
Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
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Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
#32Earlier quoted context omitted.
ELI5 por favor
http://www.economist.com/blogs/freeexchange/2014/04/money Essentially, if you think that a currency will be worth more tomorrow than it is today there is little reason for investment (or even spending!). It quickly becomes a spiral where no one wants to spend. Inflation provides a nice kick in the pants for people to put their money to good use. This isn't a concern yet for Bitcoin because in the scheme of world econ…
Aren't we learning in today's environment where prices of many things are going down (or with recent Japan as an example), that deflation isn't necessarily bad? In the past it is associated with recessions, but it may be a side effect of the recession or depression, or an over-adjustment by governments trying to reign in inflation.
Economists agree: deflation is either good, or bad, or irrelevant: http://ftalphaville.ft.com/2015/03/23/2122452/economists-agr...
Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
#33More powerful miners beget higher work needed to mine. A small cadre of people with ultrpowerful mining gear have pushed a more difficult task on the rest of us.
... by simultaneously facilitating a large ratio of bitcoin's infrastructure.
Not 100% sure, but from your tone it sounds like you think they are performing some kind of service. This is not true. Miners do not increase the number of transactions the network can handle. An infinitesimal amount of the electricity going into mining is actually goes to process transactions. A raspberry pi in a shoebox running mySql is capable of processing more transactions than the entire bitcoin network, liquid nitrogen and all.
All that mining does is give the person with the most hashrate more voting power in which transactions will be accepted. Innovation in mining hardware and data centers does not in any way increase bitcoin's security.
Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
#34Earlier quoted context omitted.
Then blocks continue to be created, but no more coins are mined (in practice, we will be mining tiny little fractions of a coin for a very long time until it drops off to true zero).
If no more coins are mined (or the mining rate drops to almost negligible levels), is there still any incentive for people to keep the blockchain alive by computing power? Aside from keeping the whole system alive, I mean.
When you request a transaction you also offer a fee. You get to set the fee. If miners don't like it they don't have to include your transaction, and if that happens your transaction will not get confirmed.
After no more coins are mined, miners will be relying entirely on transaction fees. At that point, competition will show us the real cost (and electricity used) for transactions.
Right now transaction fees are low(er) because miners can offset their costs against the coins that they mine as well.
Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
#35Bitcoin feels a bit like the gold standard. Massive mining operations dumping huge volumes of resources and energy to acquire some thing that is only mildly useful. It seems quite wasteful.
There's a pretty good writeup about this issue in the Stanford/Princeton Cryptocurrency Class: https://drive.google.com/uc?id=0B4-bDFu_72Beelkxd3VlbXoyd0E&... Excerpt: According to our estimates then, the whole Bitcoin network is consuming maybe 10% of a large power plant’s worth of electricity. Although this is not an insignificant amount of power, it's not yet a large amount of electricity compared to all the other…
That paper estimates the bitcoin network's total power consumption at around 117MW. This latest increase is estimated at 40MW. So it is a significant increase.
Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
#36Earlier quoted context omitted.
ELI5 por favor
http://www.economist.com/blogs/freeexchange/2014/04/money Essentially, if you think that a currency will be worth more tomorrow than it is today there is little reason for investment (or even spending!). It quickly becomes a spiral where no one wants to spend. Inflation provides a nice kick in the pants for people to put their money to good use. This isn't a concern yet for Bitcoin because in the scheme of world econ…
Deflationary spirals are a hypothetical concern and mostly a fringe neo-Fisherian idea that has recently gained some mainstream nodding, but is otherwise difficult to verify in any way.
For one thing it assumes a massive collective irrationality where people's expectations are all rendered berserk and plunged into a negative time preference. It's a very tough gambit to make that people can withdraw their propensity to consume to such a high extent. It's tough to presume that the heterogeneous stock of capital and the time structure of production will just stand still to a deflationary pressure and not readjust to add more stages or adjust the price spreads in between. [1] Of course, BTC being a global currency means it exists in competition and per Gresham's law can always be driven out. Not a catastrophe.
Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
#37Earlier quoted context omitted.
... by simultaneously facilitating a large ratio of bitcoin's infrastructure.
Not 100% sure, but from your tone it sounds like you think they are performing some kind of service. This is not true. Miners do not increase the number of transactions the network can handle. An infinitesimal amount of the electricity going into mining is actually goes to process transactions. A raspberry pi in a shoebox running mySql is capable of processing more transactions than the entire bitcoin network, liquid…
>Innovation in mining hardware and data centers does not in any way increase bitcoin's security.
Not sure exactly what you mean here - mining, and mining faster, generally increases the computational resources another third party would need to 51% attack the network.
Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
#38Bitcoin feels a bit like the gold standard. Massive mining operations dumping huge volumes of resources and energy to acquire some thing that is only mildly useful. It seems quite wasteful.
I wouldn't say currency or a financial instrument is just mildly useful. How much money gets spent running the equivalent size of banks?
Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
#39Nobody on HN pointed out who is behind the increase... This is BitFury who just launched a 40 megawatt data center filled up with their new 16 nm chips which reportedly achieve approximately 0.06 joule per gigahash. They also use immersion cooling which gives them an insane PUE of 1.02. So the mining capacity of this DC alone is ~650 Phash/s! We saw an increase of ~200 Phash/s in the last 30 days, so presumably they…
Are those crazy jargon words meant to translate to $ ? If so, is it profitable? Sounds like they've just cut their lunch by 40% too.
Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days
#40An interesting though exercise:
Does the new capacity make a bitcoin more valuable or less valuable?
Intuitively seems like more valuable, but the average cost in energy to mine the marginal block has gone down (otherwise the new miner wouldn't be mining) and that's often though of as the floor on BTC value.
Seems like having a stronger network is a net plus, and since they're probably not near the 50%+1 threshold it probably is in fact a stronger network. Although maybe they will get close if marginal miners are forced to turn off if the price of XBT drops and BitFury is enough more efficient.
Although BitFury is probably not a bad actor, technically a 50%+1 attack is not obviously illegal (IANAL), although a government might step in ironically enough. It seems to me these types of more centralized setups do introduce some tail risk to the system.