Bitcoin Forum

Other => Beginners & Help => Topic started by: Enabled on May 17, 2017, 05:26:48 AM



Title: Bitcoin Coin Cap
Post by: Enabled on May 17, 2017, 05:26:48 AM
Hello everyone. I am quite new to Bitcoin, yet I do understand the basics. One of the questions I would like to be clarified is how the Bitcoin 'coins' are capped off at 21 million? What stops a hacker from just randomly creating new coins? And what is the difference between a block and a coin? Is a coin a shorter term for Bitcoin?


Title: Re: Bitcoin Coin Cap
Post by: pooya87 on May 17, 2017, 05:40:24 AM
consensus is stopping it.
it means if someone randomly creates new coins (outside of what the protocol allows) it will be rejected by the rest of the network. in other words that will be a fork of bitcoin. like altcoins.

a block is where transaction data is permanently being recorded. https://en.bitcoin.it/wiki/Block
coin can mean many things depending on the context. it can be shorter for bitcoin like what Satoshi refers to in the bitcoin white paper. or it can mean the transaction outputs since there is no such thing as "coins" or "bitcoin" exactly and all there is are transactions.


Title: Re: Bitcoin Coin Cap
Post by: Amph on May 17, 2017, 05:43:18 AM
hackers can't hack bitcoin like that, bitcoin is based on consensus, the hacker if he want to remove the cap need to run his own fork and basically making his altcoin

block are essentially files they are needed to record transactions, when you solve one another is created, the coins are the reward for each block currently at 12.5 per block


Title: Re: Bitcoin Coin Cap
Post by: AgentofCoin on May 17, 2017, 05:54:42 AM
One of the questions I would like to be clarified is how the Bitcoin 'coins' are capped off at 21 million?
Bitcoin was programmed so that when it began it's mining process, 50 bitcoins would be "rewarded"
to the miner for each block "found". After 210,000 blocks, or roughly 4 years, the programming
enforces that the miners can only take 25 bitcoins. If the miner took 50 again or anything more
than 25, that miner will create an invalid block and lose the potential reward. This process is called
the "halving" and will repeat every 210,000 blocks making the block reward split is half each time.

Eventually, sometime around the year 2140, the block reward will be 0 bitcoins due to the "halvings".
At this time, about 21 million coins will have been "mined" in total. Thus, the 21 million coin limit is a
result of this halving process in the system, and not directly programmed in as a coded cap number.


What stops a hacker from just randomly creating new coins?
If a hacker or a malicious miner created coins that didn't correspond to a proper coinbase transaction,
those coins would be invalidated by the verifying node network and the miner nodes. Essentially, they
could never be spent since they have a fake origin. Every valid bitcoin has a valid origin called the
"coinbase transaction", which is the first transaction in every new block. Every bitcoin transaction
cites its prior origin in order to prove that it is valid. That is one purpose for the "blockchain", to
prove prior validity in a decentralized manner.


And what is the difference between a block and a coin?
A "block" is a structure that the miners create that contains bitcoin transactions that they claim are
valid and is broadcasted to the rest of the network for verification of their work as well as for the next
block to be built upon. When your bitcoin transaction receives a "confirmation" or is "mined by a
miner", those both mean that a miner has placed your transaction into a block. Only when your
bitcoins have been placed into a block, are you somewhat sure that your transaction will not be
reversed. The more blocks built upon your block, the more secure your transaction becomes.

A "coin" is a term used to describe the monetary representative of the token "bitcoin".
Essentially, a "block" contains transactions of everyone's "coins".


Is a coin a shorter term for Bitcoin?
Yes, but it could also be used for any cryptocurrency's token.




Title: Re: Bitcoin Coin Cap
Post by: gordoh on May 17, 2017, 05:56:49 AM
Hello everyone. I am quite new to Bitcoin, yet I do understand the basics.

Welcome to the world of Bitcoin. This is an exciting place and there is potential to make a lot of money. Please be careful though there are a lot of scammers out there and if they get their hands on your coins there is no way to get them back. Be very wary when buying or selling coins and make sure you use an exchange or a trusted Escrow service. There are a few on this forum as far as I know.

Quote
One of the questions I would like to be clarified is how the Bitcoin 'coins' are capped off at 21 million? What stops a hacker from just randomly creating new coins?

The network is protected against this kind of behavior. It controls the flow of coins. As @pooya87 said, the network will just reject any new coins created by hackers. The only way they can do it successfully is by creating their own altcoin but that comes with its own set of problems and without trusted backing its not likely to gain any traction.



Title: Re: Bitcoin Coin Cap
Post by: cheetoblue on May 17, 2017, 06:11:00 AM
Must admit - I love the fact that there is a cap on total amount of Bitcoin. This should (in theory) increase the value of each Bitcoin, especially if more and more people want some Bitcoin  :)


Title: Re: Bitcoin Coin Cap
Post by: davidmccoy on May 17, 2017, 06:26:17 AM
Bitcoin is designed to have 100,000 units, just like we have 100 cents in 1 USD. The cap will not affect the performance of the currency. We already are dealing with fractional transactions.


Title: Re: Bitcoin Coin Cap
Post by: crazyivan on May 17, 2017, 06:28:47 AM
Must admit - I love the fact that there is a cap on total amount of Bitcoin. This should (in theory) increase the value of each Bitcoin, especially if more and more people want some Bitcoin  :)

Really? Well, that s kinda the reason 95% of people invest into BTC and this is what causes price increase, dis-balance between supply and demand.


Title: Re: Bitcoin Coin Cap
Post by: magneto on May 17, 2017, 06:53:59 AM
Hello everyone. I am quite new to Bitcoin, yet I do understand the basics. One of the questions I would like to be clarified is how the Bitcoin 'coins' are capped off at 21 million? What stops a hacker from just randomly creating new coins? And what is the difference between a block and a coin? Is a coin a shorter term for Bitcoin?

A block is what creates a coin.

Hackers can't just randomly hack coins out of thin air because they need computer power to do that. Technically finding bitcoins is hacking - you need a lot of computing power to solve the algorithms. So there is no apparent advantage that hackers have over normal, honest miners, making bitcoin more secure than most other payment processors.

Yes, coin is basically a shorthand for bitcoin.


Title: Re: Bitcoin Coin Cap
Post by: locopao on May 17, 2017, 07:25:20 AM
Bitcoin is designed to have 100,000 units, just like we have 100 cents in 1 USD. The cap will not affect the performance of the currency. We already are dealing with fractional transactions.

Well, that's Not exactly right man... You missed some zeros  ;)

1 Bitcoin is 100,000,000 satoshi (not units).

1 Satoshi is 0.00000001 BTC

so 100,000 satoshi is just 0.001 BTC. And right now, 0.001 BTC is almost 1.8 USD.


Title: Re: Bitcoin Coin Cap
Post by: ciobanuionut1982 on May 18, 2017, 03:30:13 PM
Welcome to the world of Bitcoin. This is an exciting place and there is potential to make a lot of money


Title: Re: Bitcoin Coin Cap
Post by: Velkro on May 18, 2017, 07:36:29 PM
Must admit - I love the fact that there is a cap on total amount of Bitcoin. This should (in theory) increase the value of each Bitcoin, especially if more and more people want some Bitcoin  :)
Indeed its great and this is not in theory, it increases value of bitcoin because people not just want bitcoins, they want to store value somewhere and bitcoin with its limited supply is perfect for that.


Title: Re: Bitcoin Coin Cap
Post by: Mike Mayor on June 02, 2017, 09:41:21 PM
Must admit - I love the fact that there is a cap on total amount of Bitcoin. This should (in theory) increase the value of each Bitcoin, especially if more and more people want some Bitcoin  :)
Indeed its great and this is not in theory, it increases value of bitcoin because people not just want bitcoins, they want to store value somewhere and bitcoin with its limited supply is perfect for that.

It's supply and demand. The more people that adopt bitcoin the more the spread. So we have to share the same amount of coins among more and more people so the spread is thinner and the value will increase. There other factors too but they all short term. Over the long term market manipulation and stuff doesn't matter. The supply and demand remains constant though.


Title: Re: Bitcoin Coin Cap
Post by: cocoinin on July 19, 2017, 02:07:19 AM
Eventually, sometime around the year 2140, the block reward will be 0 bitcoins due to the "halvings".
Please, correct me, if I understand it wrong. So in 2140 creating a block will give zero reward and no more transactions will be recorded because nobody will want to create blocks?


Title: Re: Bitcoin Coin Cap
Post by: AgentofCoin on July 19, 2017, 05:51:32 PM
Eventually, sometime around the year 2140, the block reward will be 0 bitcoins due to the "halvings".
Please, correct me, if I understand it wrong. So in 2140 creating a block will give zero reward and no more transactions will be recorded because nobody will want to create blocks?

You are half correct and half incorrect.

Basically, in 2140, a new phase will be reached in Bitcoin's design where
the "halving" and "block rewards" will no longer exist. When that occurs,
the total number of bitcoins mined, will have been 21 million (actually a
little less, but that's another issue) and no new bitcoins can be validly
taken from the code. All blocks found/mined after this point in time,
will always have a coinbase transaction that is 0.00000000 bitcoins [*1].

Long before the 2140 deadline approaches, a "miner's fee market" will
slowly begin to become more important and increase, as it attempts to
offset the loss in "block rewards" due to the "halvings". So, as the system
slowly moves toward 2140, a transitioning is taking effect, and in theory
it has already started. Interestingly, when it begins to activate as a
balancing mechanism, it will forever be in effect, in whatever function it
performs, till the death of the Network. It becomes an important catchall.

The "fee market" is a corrective system designed to "perform/adjust" in
many important instances, both commonly known and unknown. Today
it is used for Spam attacks, tomorrow it will be used for Denial-of-User
attacks (and others), and through time and in the future, it will be used
as theorized in the Whitepaper. Very basically, the fee market is not a
simple market, but a security mechanism masquerading as a market.
In a way, the fee market is as important to the token (and ultimately
the blockchain), as PoW is to Mining/Block Building [*2].

So simply, in 2140 the "miner's fee market" will be solely relied upon
as the "new block rewards". Miners will still "mine" and users will still
transact, because of transactions fees.




[1] In theory, if we "needed" to add more decimal places in the future,
prior to 2140, we will need to mine those decimals as well, which will
extend the programed deadline (but not exceed the 21 million). Whether
more decimals will be necessary or not, is another matter, but it is
possible that mining could continue with a subsidy for infinity. But if that
does occurs, IMO, it has a higher chance of breaking everything, then
providing true benefit. It is better to stop the subsidy at 2140 as a "Rule",
than to continue the deflation that no longer is a corrective force, but
becomes a destructive one instead. Satoshi decreased and stopped the
subsidy so that the Network becomes perfected over time. It is the
reverse of the current world system, which creates subsidy over time.

[2] The three systems secure themselves alone, and then reinforces and
compounds upon the others, providing this security and support only for
the benefit of the full system (and the ecosystem it creates). In this way,
the three systems become one entity and is what Bitcoin actually is and
why it has and will always thrive. It's as near a perfect system as humans
could create, and it's magnificence and contradiction of this world,
frightens even me sometimes.


Title: Re: Bitcoin Coin Cap
Post by: cocoinin on July 19, 2017, 09:00:34 PM
Wow, thanks man!

I need some help with designing a custom  cryptocurrency platform. Can you help me with some my questions in private?


Title: Re: Bitcoin Coin Cap
Post by: AgentofCoin on July 19, 2017, 10:57:23 PM
Wow, thanks man!

I need some help with designing a custom cryptocurrency platform. Can you help me with some my questions in private?

Sure, some questions are fine.
PM them to me when you are ready.



Title: Re: Bitcoin Coin Cap
Post by: Velkro on July 19, 2017, 11:03:49 PM
Bitcoin 'coins' are capped off at 21 million? What stops a hacker from just randomly creating new coins?
Because hacker can't influence entire network, its too much independent (network) from one or even many points of failure (hack).
Even if somehow it would happen, people and miners and developers set rules by consensus so they would fix any hacking results.


Title: Re: Bitcoin Coin Cap
Post by: Mike Mayor on July 23, 2017, 04:19:28 AM
It's also worth noting we currently only have a small percentage of total Bitcoin. We mine as it's released. When all the bitcoins have been mined instead of mining them we will be mining the transactions since there will be many. It won't change much you just won't be generating new coins.


Title: Re: Bitcoin Coin Cap
Post by: Celendion on July 23, 2017, 04:28:09 PM
Sometimes the new bitcoin appears under block conditions, but the amount of bitcoin can also shrink, but in the next few years, the amount of bitcoin will always shrink, it will result in the bitcoin will always be rare


Title: Re: Bitcoin Coin Cap
Post by: Blackmoon Crypto on August 08, 2017, 10:18:28 AM
Hello everyone. I am quite new to Bitcoin, yet I do understand the basics. One of the questions I would like to be clarified is how the Bitcoin 'coins' are capped off at 21 million? What stops a hacker from just randomly creating new coins? And what is the difference between a block and a coin? Is a coin a shorter term for Bitcoin?

Good question! I believe that the Bitcoin rails are a decentralised ledger called the blockchain that is freely available in the cloud but what you can’t do is easily change it. A new block (think of it as a page in a ledger) is created every 10 minutes or so and contains all the transactions submitted by users since the last block was created. Each block has to be agreed by the community before it is added to the previous blocks, i.e. the block chain. Hope that helps!


Title: Re: Bitcoin Coin Cap
Post by: Wayan_Pedjeng on August 08, 2017, 02:50:03 PM
If I am not wrong, then a hard fork with 95% support is needed to rise the limit of 21 million coins. And such a measure will never find more than 5% support, as doing so will reduce the value of the BTC which everyone is holding.