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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

#51

Post by npoc »

Rury wrote: post #50
npoc wrote: post #49

Earlier quoted context omitted.

Money is proof of work. Work is energy. Money is proof of energy. Money is bitcoin. Where am I wrong?

The problem with bitcoin is that past work is worth more than future work. More work/energy has to be expended now for 1 bitcoin than in the past. It's just as an unequal system as inflationary fiat.

You're not taking into account that the work was far riskier in the past - a much higher risk of it being wasted. It also required much scarcer knowledge in order to understand the value of bitcoin.

You buy bitcoin at the price you deserve.

Bitcoin is inheritly more equal than fiat because the cost of issuance is the same for everyone i.e. you don't have a select group of people who can legally counterfeit it and accrue enough power to effectively control the world.

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

#52

Post by Rury »

npoc wrote: post #51
Rury wrote: post #50

Earlier quoted context omitted.

The problem with bitcoin is that past work is worth more than future work. More work/energy has to be expended now for 1 bitcoin than in the past. It's just as an unequal system as inflationary fiat.

You're not taking into account that the work was far riskier in the past - a much higher risk of it being wasted. It also required much scarcer knowledge in order to understand the value of bitcoin. You buy bitcoin at the price you deserve. Bitcoin is inheritly more equal than fiat because the cost of issuance is the same for everyone i.e. you don't have a select group of people who can legally counterfeit it and acc…

Not really. Back then miners risked less work for less certain value. Nowadays miners risk more work, for more certain value. While it may seem like the past risked more, the risks/work hasn't really changed.

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

#53

Post by npoc »

Rury wrote: post #52
npoc wrote: post #51

Earlier quoted context omitted.

You're not taking into account that the work was far riskier in the past - a much higher risk of it being wasted. It also required much scarcer knowledge in order to understand the value of bitcoin. You buy bitcoin at the price you deserve. Bitcoin is inheritly more equal than fiat because the cost of issuance is the same for everyone i.e. you don't have a select group of people who can legally counterfeit it and acc…

Not really. Back then miners risked less work for less certain value. Nowadays miners risk more work, for more certain value. While it may seem like the past risked more, the risks/work hasn't really changed.

Yes, that's my point. Any extra gains in value that early adopters received was offset by the greater risk they took.

If anything risk/reward ratio is a better proposition than it was then - we have 15 years of solid operation, nation state adoption, ETFs and far less volatility yet the upside is still enormous.

You can buy "risky" bitcoin now at $50K, or you can wait until $50M when everyone and his dog is using it to store their wealth. The choice is yours.

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

#54

Post by thisconnect »

pants2 wrote: post #41

Bitcoin will eventually need to move to Proof of Stake like Ethereum did. Or to maintain a fixed supply without any issuance whatsoever, Bitcoin could convert entirely into an ERC-20 on Ethereum (probably the best option but would never happen)

Wbtc already happened. Bitcoin-pos already happened

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

#55

Post by superkuh »

tantalor wrote: post #47
superkuh wrote: post #45

Earlier quoted context omitted.

I don't "invest" in cryptocurrency and never have. I just use it regularly (a couple times per month) to pay for things. For my use case it really doesn't matter what the silly speculators do in their completely off-chain fiat speculation markets.

Ah yes, the totally normal "things" that can only be purchased with bitcoin.

Only? I never said that. But I certainly have an easier time paying for my dot com domains, VPS renting, computer hardware from newegg, etc with bitcoin than I do with my mastercard debit card. To answer your implicit (if inaccurate) question Mastercard has literally broken itself (via it's complex out of band anti-fraud implementation) with Newegg and I can't even use it there anymore, I have to use bitcoin. The last thing I bought was a super nefarious vertical 2x monitor stand. But sure, project your own nefarious thoughts onto my behavior if you wish.

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

#56

Post by jl2718 »

_heimdall wrote: post #46
jl2718 wrote: post #32

“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 reasonab…

How is it different exactly? If I had 51% of the hashing power on the bitcoin network, couldn't I change block history and have a majority of the network agree on that new chain?

No. If you had 51%, you could revert one block of history for every 49 blocks of attack time. In addition, you have no ability to create transactions that were not already signed by the owners, nor create bitcoins more than the block reward. This is because of the UTXO model rather than the state machine model. In Bitcoin, every transaction is verified against history, while the EVM chains only verify transactions against state. So if you control EVM state, you can bootstrap every new node to any state you wish, but UTXO verification requires rewriting the entire history.
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