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Napkin math suggests Bitcoin will perish unless its mining incentives change

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Re: Napkin math suggests Bitcoin will perish unless its mining incentives change

#31

Post by Ekaros »

ftlio wrote: post #27
AlexandrB wrote: post #19

Earlier quoted context omitted.

> As Bitcoin becomes scarce to obtain, it's price will skyrocket This kind of logic always reminds me of the Terra/LUNA fiasco. An economic model that works as long as nothing unexpected happens. For the price of bitcoin to skyrocket, you need a constant stream of new investors willing to buy bitcoin at these inflated prices. What if this just doesn't happen?

Begging the question. What makes the prices inflated today?

Speculation... And probably quite a bit of wash trading...

Re: Napkin math suggests Bitcoin will perish unless its mining incentives change

#32

Post by jl2718 »

“Bitcoin security” is a different notion than almost all other popular chains. A prolonged 51% attack on bitcoin implies the ability to double-spend, but not at all the ability to affect prior balances. A 51% attack on most smart contract chains implies the ability to change any and all state arbitrarily.

The simplest solution is to wait until the cost of hashing exceeds the value of your transaction by some reasonable factor. I expect that better solutions will come along by soft fork without adverse effect on supply or decentralization.

Re: Napkin math suggests Bitcoin will perish unless its mining incentives change

#33

Post by OutOfHere »

reedf1 wrote: post #14

Someone has been independently "discovering" this every fortnight since I first heard the word Bitcoin. The answer will always always be, read the bitcoin whitepaper please... This is explicitly discussed.

People need to be reminded of it every year.

Does the Bitcoin whitepaper offer a resolution?

Re: Napkin math suggests Bitcoin will perish unless its mining incentives change

#34

Post by Volundr »

qerti wrote: post #18
fromMars wrote: post #5

That would be a positive. We need alternatives other than just burning energy to base a currency on.

Just wait until you find out how much energy the financial industry uses

How much? How does it compare to the energy currently being used for Bitcoin mining?

Re: Napkin math suggests Bitcoin will perish unless its mining incentives change

#35

Post by ftlio »

Ekaros wrote: post #31
ftlio wrote: post #27

Earlier quoted context omitted.

Begging the question. What makes the prices inflated today?

Speculation... And probably quite a bit of wash trading...

Speculation would qualify almost everything, so that would be more of a statement on macroeconomics beyond Bitcoin.

BTC is liquid enough while seeing billions of dollars in inflows a month to discount wash trading as a major factor.

Re: Napkin math suggests Bitcoin will perish unless its mining incentives change

#37

Post by OutOfHere »

tromp wrote: post #2

Capped supply is overrated anyway [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...

Removing the cap is a solution, but not necessarily a preferred solution. For one, it is not guaranteed that mining will even continue if the rewards are positive but insufficient to cover the expenses of mining. Secondly, I shudder at the thought of burning fossil fuels in perpetuity to mine bitcoin.

Re: Napkin math suggests Bitcoin will perish unless its mining incentives change

#38

Post by tromp »

kurthr wrote: post #36
tromp wrote: post #2

Capped supply is overrated anyway [1]. [1] https://john-tromp.medium.com/a-case-for-using-soft-total-su...

It depends on whether your goal is a deflationary currency that gives outsized rewards to early adopters.

It's not just the deflationary ones. With one exception, all cryptocurrencies give outsized rewards in early years. E.g. block rewards 20x higher in the first year for Dogecoin. Or 40% of all (soft) supply in the first year for Monero.

Re: Napkin math suggests Bitcoin will perish unless its mining incentives change

#39

Post by fragmede »

spenvo wrote: post #15

And, at the one-hour mark, this post got knocked out of the top 10 on HN's front page to the 106th spot on the 4th page, for no stated reason, which has happened before. (Perhaps it's HN's "flame war detector", idk; for me, that usually only knocks a post to Page 2). None of the comments are too negative about the piece. But in any case, this will likely get flagged by enough users, and I get it - people own a lot of…

This forum is unfriendly for discussions about cryptocurrency. There are tough conversations happening about it, just not here, where the level of discourse about the subject itself is low. It's like saying the NBA is in trouble because there aren't open and tough discussions about it here. It might be, but pack of discussion here isn't signal of anything other than here's not a place for that discussion.

Re: Napkin math suggests Bitcoin will perish unless its mining incentives change

#40

Post by AlexandrB »

ftlio wrote: post #27
AlexandrB wrote: post #19

Earlier quoted context omitted.

> As Bitcoin becomes scarce to obtain, it's price will skyrocket This kind of logic always reminds me of the Terra/LUNA fiasco. An economic model that works as long as nothing unexpected happens. For the price of bitcoin to skyrocket, you need a constant stream of new investors willing to buy bitcoin at these inflated prices. What if this just doesn't happen?

Begging the question. What makes the prices inflated today?

As with any investment, there's always the classic "Past Performance Is No Guarantee of Future Results". But with Bitcoin a significant downturn could be an existential threat if miners decide it's no longer worth their time and money to keep the blockchain running.
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