Bitcoin Forum

As far as I understood the incentive of keeping the miners running - even after all 21 Million Bitcoins are found - are the transactions fees.

With the arrival of the new ASIC devices difficulty is going to skyrocket.

After the last Bitcoins is found I assume/hope many of those ASIC miners will still be running.

Question: Is this a good thing (this high difficulty) for Bitcoins in general? I mean, does it make the network more save? Or does it have no influence at all?
 

Mining of new Bitcoins won't end for over 100 years.

High difficulty will still make the network more safe AFAIK, blocks will still be generated as normal but no reward will be paid, so it'll defend against 51% attacks.

short answer:
ASICS will mean the difficulty will increase dramatically. cutting out all the hobbiests just using standardised equipment from mining. that to continue mining you need to get the big rigs in.

knowing that difficulty is set by only wanting to 'release' x amount of coins in a 4 year period between each reward halving it will be impossible to grab the 21million sooner then expected.
all you would do by having a ASIC farm is grab more of that allotted 4 year periods coins then another person would. where by those that own ASIC farms will become the richest earners, and those owning lesser equipment will be the poorer earners.

the other part of the topic.
the 21mil will never completely, end. as the halving will just divide and divide endlessly until its too expensive to mine for just a hand full of satoshis in the 4 years.

but transaction fee's will subsidise the rewards. which will become more like a Value Added Tax on transactions which in a few decades will need to be checked that the fee's dont increase just to keep miners happy at the expense of traders.

but thats decades away..

If SHA hashing ASICs were available and Bitcoin miners weren't using them, then that would make the bitcoin network less secure as there is this technological advance that could cause a single party or cartel to attain 51% and mess with transactions.

So ASICs themselves don't make Bitcoin's network more or less secure, only the distribution of those ASICs would cause that.

So having multiple manufacturers and many miners using all of them does keep bitcoin more secure from this threat of a single party or cartel.  But no more secure than Bitcoin was already perceived to be before it was a given that ASICs were "just around the bend"

I anticipate, after 75% of the coin are mined after another 4 years, people will lose incentive to mine the rest of the coin

Because, when most of the coin have already been generated, the feeling of being the late commer is very strong and obvious: No matter how hard you mine, you can only get a very little amount of coin, these kind of unfair feeling will drive people to search for some other games where they could become the early adopter

This early adopter problem has been there since the first day of BTC, it greatly decrease the late comer's incentive, and hurt the popularity of BTC

By the way, I think the newer version of BTC client charge higher transaction fees, but I'm not sure, someone can prove it?

The idea of BTC is not to mine & immediately change to Fiat Money at MtGox. The idea behind Bitcoin is a different one ...

That's not a possibility. If everyone else "loses incentive" I'll mine them all on one laptop. The incentive will always be enough because it adjusts.

If that was true wouldn't there be fewer new people every day? But actually we see more because bitcoins are more valuable now. They are more valuable now because every new person or business who accepts them makes them more useful.

I do not think this argument stands really.

Getting into bitcoin mining today is not more expensive than before I would think probably even cheaper.

It is just a technology change where you can get a 30 to 60GH/s ASIC rig for $600 to $1300. The only difference is that it will be the new normal with a higher difficulty and a total network power that will most likely jump from 20,000GH/s today to probably 100,000-250,000GH/s in 6 months (5 to 12 times). It will still be a hobby for most.

However, there will be no GPU mining within 6 to 12 month, it will make no economical sense. But all these rigs have long been amortized I would think.

getting into bitcoin in 2009 required just a nice cpu, then just a nice GPU, now its rigs of many GPU or FPGA.. next is asics costing many units..
so your saying from 1 desktop computer with 1 gpu in 2009.. costs the same as a multi rig ASIC? nice.


that statement correlates with what i said in last post. cheers for going into more detail for me, but sheling out a few thousand in a few months time compared to a few hundred last year. isnt really a hobby, its a dedicated passion.

Not really, as a Jalapino costs less than what I paid just for a second-hand 5870.

So anyone can easily pick themselves up a small ASIC easily, and pick up more over time even if they choose.

Plus there is still a big bias against merged-mining, so there are some really low difficulty altcoins still to be mined and who knows maybe more will come along if all those people are currently neglecting all skyrocket to really high difficulty.

-MarkM-

Recently, namecoin has doubled in value.  It will be interesting to see not only what happens to BTC when ASICs hit, but NMC and the other cryptocurrencies.  I'm rather excited to see what happens to LTC.

[mods please note the following]

The network can only be kept secure by having enough distributed hashing power that one miner (or more likely pool) simply cannot obtain more than 50% of this power.

So this ongoing hashing arms race is exactly what I assume Satoshi would have predicted (although maybe not happening as fast as it has) and I very much doubt it will stop after the arrival of ASIC.

By the time "all the Bitcoins" have been found ASIC will be the longest and most cost effective way Bitcoin have been mined
CPU had what 18months
GPU a couple of good years
FPGA were killed off by early ASIC announcements before they really got traction...
ASIC soon until?
difficulty might skyrocket, but globally the power usage of the Bitcoin network will drop significantly - this I feel is a good thing, and I don't mean just for my power bill.


well... actually... the 27Ghash bASIC costs less than 1 of my 7970's did when they were first released, this is still well with reach of a hobbyist.
like most new tech I expect price will drop in time and then V2ASIC will appear - this doesn't just happen in BTC - do we really need a new iphone very year? (its ok I'm an android), just one example from outside bitcoinworld.

Oh and the CPU I bought in 2009 was more than the price of a 27Ghash asic today (in raw $ no inflation or anything factored in) - shame I didn't hear about Bitcoins till early 2011, and actually today I can still buy a new cpu for more than a ASIC - so that's not really a valid argument imo. -and that is without the rest of the desktop computer included. my 2009 Desktop would have bought 1 x 54Ghash bASIC AND a 27Ghash one and left me change. Yes I spent >$1700 on a desktop computer in 2009!!! the mobo, cpu and ram now run 2 x 7970s after running 2 x 6950 for 12 months :D, I got good ROI on that! ;D ;D

I have been surprised by the number of people that have never mined a Bitcoin in their lives that have contacted me planning to buy ASIC hardware to start Bitcoin mining.
Some are even setting up GPU rigs to "learn" on while waiting for their ASICs to be delivered.

Gotta do other stuff so I'll stop typing now :)
Best
Graet

Disclaimer - I run a large Bitcoin mining pool with an active IRC chanel with >80 users and also idle in many Bitcoin related IRC chanels. I talk to miners about this stuff every day, get their feelings on upcoming events and what their plans are.I also spend a lot of time trying to cut through bullshit and see what is real.