Bitcoin Forum

After seeing the 28th Chaos Communications Conference (28c3) videos about Bitcoin and the rather extensive statistical analysis that was done I started asking some questions and poking around. I realized that there is a lot of misconception, myself included, about the distribution of coins and the statistical limit of coins.

Basic arguments and points:

• Security in the block chain early on was subsidized by the network itself, partly because there were no coins to facilitate trade to allow transaction fees
• A time will come when the network subsidization no longer fufils the network security needs, possibly long before any date like 2033 or 2144
• A market of transaction fees will emerge where peers will commission the security needs of the network
• A relationship will exist between the power of miners and consumers hardware that greatly influences the total percentage of Bitcoin fielded to pay for the security of the entire network
• Inflation will always approach zero even if we extend numerical precision effectively "printing more money" endlessly if we choose, but later the printed money will be infinitely small and exist purely to keep the network from being stuck in a drought
• Over time the network will force increasingly more fiscal responsibility as the subsidization will no longer fund errors

Full paper: https://docs.google.com/document/pub?id=18RirEreHjr8AVrxeL6_MeN_pQPCxWnoj1s_qPunMLX8

Please let me know what you think and any concerns or questions. Please let me know what area of the paper you are discussing or provide context to your comment.

Thanks!

When posting links, people are more likely to click them if you describe what the link is about, and why anyone should care.

I agree but I really would like to focus on posting in a more visible area and don't want to double post. I didn't know the forums had these restrictions. I don't spend much time on the forums. The paper is about the relationship between new coins, transaction fees, lost coins, and the security costs of the network.

surprisingly its not just newbies that read this forum :)

looks pretty accurate, nothing groundbreaking though

"It’s estimated that this award will halve in December 2012." the block reward is halving early december/late november, currently 5th Dec though the time is coming forward. I guess you mean estimated to change in Dec, the halving is no estimate :) wording confused me :)

Wow. Thanks! I've modified the original post.

Thanks.

I'm not debating original work, as I don't expect anything I did to be new, but where can I find existing analysis?

I posted as you edited your original post, didn't realise it was meant to be an "analisys" to me it just says what many people already knew.
I don't think you quite get how transaction fees work, in time miners will prioritise to accept higher paying txns - there already is code available :)
transaction fees are not tips but payment for service :)

Which people? Where? I've been looking for this kind of analysis and have not found it. Can you point me in a general direction where I can read more about this already explored topic?



Besides calling it a "tip" in the paper what am I missing about transaction fees?


Indeed. Was this not clear in the analysis? I think I mention it 6 times:

Thanks for taking a look. I suppose I shouldn't have spent my time doing analysis and sharing it.

One of my favorite things about the transition to fees is that while the average time to next block will always be 10 minutes the variance in the time will begin to drop. This is because once the subsidy is low and fees dominate after a block is solved the reward for the next one will be very low but immediately start increasing as new transactions with fees attached are broadcast. Also, if certain times of day or days of week have more or higher paying transactions those times will get faster service.

I don't think you should feel bad about sharing it here. These forums are often unforgiving and if you frequented them you would be hardened.

But you'd also know that most users here that aren't newbies already know everything in your "analysis". I'd suggest reading posts in the more technical and development areas in some depth as it will expand your understanding much further. These forums aren't just a social venue but also have a lot of detailed exploration of technical issues and related problems.

And some things get beaten to death over and over as each newbie thinks they've discovered the "big problem with Bitcoin". (Not that I'm suggesting you fall into that camp)

Can someone point me to where this very common knowledge is that I seem to have failed finding?

The mere act of writing this has forced you to better-understand bitcoin. You're now in a better position to spread the word.