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Most Expensive Tweet Ever Sends $11,000 To Kenyan Water Charity Via Dogecoin

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Re: Most Expensive Tweet Ever Sends $11,000 To Kenyan Water Charity Via Dogecoin

#31

Post by GrinningFool »

sp332 wrote: post #26
pkulak wrote: post #20

As a Keynesian I love that Dogecoin is the first (that I know of) crypto currency that isn't deflationary. I do wish there was a way to make the things other than mining though. I hate "mining". Such a waste of resources.

"Mining" is really solving a block. This means that your computer has verified all the transactions in the block and signed them. As a reward for keeping the transaction record secure, you get some coins. At first, the reward has to be large, to entice people to a new cryptocurrency. But over time, a secure network becomes valuable for itself, and the reward isn't necessary anymore.

> "Mining" is really solving a block.

Well.. kind of.

Mining is really thousands if not tens or hundreds of thousands of people competing to try to solve the same block. The one machine to solve it first gets the reward. (or if in a pool, it's given to the pool.) Over and over again- in the case of dogecoin, once every minute or so. The GP's statement about it being a massive waste of resources is unfortunately true - that's a lot of electricity for any popular coin.

> But over time, a secure network becomes valuable for itself, and the reward isn't necessary anymore.

Has this actually happened in any case? Logically if there is no value to be gained from maintaining the secure network (eg, 'mining' new transactions into blocks for confirmation), then many fewer people will do so. The fact that it's a secure network is great - but it doesn't seem enough to entice a critical mass of people to maintain it at a cost to themselves.

Re: Most Expensive Tweet Ever Sends $11,000 To Kenyan Water Charity Via Dogecoin

#32

Post by GrinningFool »

Zombieball wrote: post #30
pkulak wrote: post #20

As a Keynesian I love that Dogecoin is the first (that I know of) crypto currency that isn't deflationary. I do wish there was a way to make the things other than mining though. I hate "mining". Such a waste of resources.

I am very naive when it comes to the bitcoin and dogecoin protocols. However, my understanding was that mining is what keeps the currency running and you are actually validating transactions. For doing this work you are "rewarded" with coins. Not really a waste of resources if you are helping run something you support.

The one miner who solves each block validates the transactions and receives the reward. For every other miner, it's wasted electricity.

Re: Most Expensive Tweet Ever Sends $11,000 To Kenyan Water Charity Via Dogecoin

#33

Post by untilHellbanned »

res0nat0r wrote: post #16
kattenkorven wrote: post #15

Earlier quoted context omitted.

There's a growing list of exchanges where you can do this https://www.kraken.com https://www.anxpro.com https://www.vaultofsatoshi.com https://www.coinmkt.com

Can any of these sites actually realize that in actual USD in a reasonable timeframe? How much time and effort and waiting does it take to see $11k in their hands? Or do they have to do transactions of $100/max once per week with a waiting time of 10 days each?

You can buy however much people are selling. I bought up to $2000 of Dogecoin at one time. I've regularly seen orders for significantly more than that though. The transaction itself is instantaneous, but of course wiring the USD to the exchange took 48 hours.

Re: Most Expensive Tweet Ever Sends $11,000 To Kenyan Water Charity Via Dogecoin

#35

Post by untilHellbanned »

skybrian wrote: post #21
res0nat0r wrote: post #16

Earlier quoted context omitted.

Can any of these sites actually realize that in actual USD in a reasonable timeframe? How much time and effort and waiting does it take to see $11k in their hands? Or do they have to do transactions of $100/max once per week with a waiting time of 10 days each?

Apparently the most common approach is to trade for Bitcoin on an exchange and then exchange that for dollars.

That used to be the most common before moolah, kraken, vault of satoshi, etc. came along.

Re: Most Expensive Tweet Ever Sends $11,000 To Kenyan Water Charity Via Dogecoin

#36

Post by seabee »

pkulak wrote: post #20

As a Keynesian I love that Dogecoin is the first (that I know of) crypto currency that isn't deflationary. I do wish there was a way to make the things other than mining though. I hate "mining". Such a waste of resources.

I hate mining too but you need a decentralized method to keep people from subverting the decision-making process and give them an incentive to participate. I would love a more environmentally friendly method than proof-of-work but I fear you would have to compromise the decentralization aspect to achieve it.

Re: Most Expensive Tweet Ever Sends $11,000 To Kenyan Water Charity Via Dogecoin

#37

Post by sp332 »

GrinningFool wrote: post #31
sp332 wrote: post #26

Earlier quoted context omitted.

"Mining" is really solving a block. This means that your computer has verified all the transactions in the block and signed them. As a reward for keeping the transaction record secure, you get some coins. At first, the reward has to be large, to entice people to a new cryptocurrency. But over time, a secure network becomes valuable for itself, and the reward isn't necessary anymore.

> "Mining" is really solving a block. Well.. kind of. Mining is really thousands if not tens or hundreds of thousands of people competing to try to solve the same block. The one machine to solve it first gets the reward. (or if in a pool, it's given to the pool.) Over and over again- in the case of dogecoin, once every minute or so. The GP's statement about it being a massive waste of resources is unfortunately true…

There is some monetary value, in transaction fees, that are collected even if there is no block reward. There will be fewer people, but hopefully it will still be above critical mass. It really doesn't take much, even a few hundred people running low-power ASICs will do just fine. We will see something similar with Doge soon. In 2015, the payout will be fixed at 5% of what it was last month. Maybe everyone will stop mining, and maybe they won't.

Re: Most Expensive Tweet Ever Sends $11,000 To Kenyan Water Charity Via Dogecoin

#38

Post by krrrh »

pkulak wrote: post #20

As a Keynesian I love that Dogecoin is the first (that I know of) crypto currency that isn't deflationary. I do wish there was a way to make the things other than mining though. I hate "mining". Such a waste of resources.

You definitely don't need to be a Keynesian to believe that a bit of monetary inflation is a positive thing. It's quite likely that Dogecoin will still be very deflationary if the velocity of cash flow, transaction volume increase faster than the Ð5 billion/a being added annually. Not to mention lost private keys which essentially destroy related coins forever.

Re: Most Expensive Tweet Ever Sends $11,000 To Kenyan Water Charity Via Dogecoin

#39

Post by seabee »

GrinningFool wrote: post #31
sp332 wrote: post #26

Earlier quoted context omitted.

"Mining" is really solving a block. This means that your computer has verified all the transactions in the block and signed them. As a reward for keeping the transaction record secure, you get some coins. At first, the reward has to be large, to entice people to a new cryptocurrency. But over time, a secure network becomes valuable for itself, and the reward isn't necessary anymore.

> "Mining" is really solving a block. Well.. kind of. Mining is really thousands if not tens or hundreds of thousands of people competing to try to solve the same block. The one machine to solve it first gets the reward. (or if in a pool, it's given to the pool.) Over and over again- in the case of dogecoin, once every minute or so. The GP's statement about it being a massive waste of resources is unfortunately true…

Even if you ignore the problem of getting a critical mass, this is an issue!

Imagine operating the network as a public good and agreeing to minimise the resources spent on it. That still doesn't prevent one of the players from secretly increasing their computing power then suddenly taking full control of the network and disrupting other countries' economies.

The incentives means you don't have to trust anyone else - you'll keep improving your CPU power because it makes economic sense to do so.

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