Maybe a quantum miner that can do SHA 256 is under development somewhere in the world
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Raised level of complexity will reduce the people's understanding thus give less community support
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A cryptocurrency that cost nothing to make will eventually worth nothing, because it is voluntarily participated. Why should I pay 200 dollar for something that cost nothing to make??? Suppose that you can generate 1 bitcoin today with a cost of 1 dollar, then everyone will immediately go to generate coin and sell it on market for $199 of profit right away, that will drag the price down to 1 dollar.
First, if I gave 144 people 25 bitcoins each, and they sold them, what would happen to the price of a bitcoin? According to you, the market would collapse because it cost them nothing to gain those bitcoins. Obviously, it wouldn't because there are enough free bitcoins to affect the market. You can't generate an unlimited number of bitcoins, so you can't drag the value down to the marginal cost. Second, suppose Bitcoin was premined and 1 bitcoin was given to each of 21,000,000 people. Would the value of the bitcoins forever be 0? What if other people wanted some? What if people wanted two or more? What if one person managed to collect 10,000 and got someone to trade two pizzas for them? Would the value still forever be stuck at 0? No. Don't you see? The value of a bitcoin has nothing to do with the cost of creating it. The supply of bitcoins does not depend on their value and bitcoins are not consumed. The economics of gold, oil, and other commodities do not apply to bitcoin. These are good arguments Your first assumption is exactly like those chinese miners with free electricity, they can dump their cheap coin on the market to make a quick buck. But since the bitcoin supply is extremely limited, a large hedge fund would still be possible to raise the market price by 10 fold regardless of sell pressure out there (They can anticipate how large the sell pressure can be) However, after the rally is over, the hedge fund cashed out and went for vacation for two years, now we are left with all the miserable bitcoin investors seeing a falling market. In a falling market, many of bitcoin's promises are broken, so the demand will also shrink significantly. In such a time, how much should a bitcoin worth becomes very important for people's decision making. And naturally, a common indicator is the mining cost: If the coin worth more than mining cost, miners will sell, if lower, miners will hold, that will adjust the supply. And this is what happened during 2014, exchange rate kept going down until they got close to mining cost And as you said, if there is no new supply, then even the cost is zero, the coin could still worth something if there is certain amount of demand. I'm not totally sure about this reasoning, but this reasoning can work if the demand of this coin is unique, can not be replaced by anything else(like diamond), or the demand is forced on many people (like fiat money). Bitcoin is not forced on anyone, so that leaves us with only the "unique demand" requirement, and there is indeed a unique demand: anti-inflation currency. Non of the other fiat currencies in the world are anti-inflation. However, any other cryptocurrency can also be anti-inflation So what makes bitcoin different than any other alt-coins would be its large community. If this community is large enough, everyone prefer to use bitcoin for transaction, then bitcoin will work like fiat money, automatically hold its value without production cost. But to be honest, most of the community consists of speculators, real bitcoiners are minority, so the community and its value are very unstable, depends on the price movement If there is any new coin generation, or fee generation, and people are possible to participate the mining, then the mining competition will raise its cost to the market price. Imagine that when one coin worth 1 million dollar while mining each block will give you a fee of 1 bitcoin, the mining cost of each block would get close to 1 million dollar due to competition Actually you can also use this to explain the price rally: When this community expands very fast, the demand surge and the price of bitcoin will rise exponentially, causing the mining infrastructure to expand, mining cost to rise. And when price is going down, the community also shrinks very fast, the demand goes down and price crash further, but get some strong support around the mining cost
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Actually I'm surprised to see those Chinese mining farms have commanded large political power almost forming an OPEC like organization in bitcoin ecosystem. At the same time, their western counterparts are too difficult to keep up with the hash market share competition because their profit oriented business model is hindered by the high manufacturing and running cost
A good example is Spondoolies tech, although they have similar or even better performance miners, but their R&D cost them a fortune, thus even with mass scale deployment they will not make the ends meet due to higher cost in labor/electricity etc...
I think they should change from the profit oriented model to auxiliary model, e.g. mining farms sponsored by most profitable bitcoin business, like exchanges and wallet providers. An exchange or wallet provider can prioritize its own transactions with 0 transaction cost if they own a mining farm
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This is still the very early days
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A cryptocurrency that cost nothing to make will eventually worth nothing, because it is voluntarily participated. Why should I pay 200 dollar for something that cost nothing to make??? Suppose that you can generate 1 bitcoin today with a cost of 1 dollar, then everyone will immediately go to generate coin and sell it on market for $199 of profit right away, that will drag the price down to 1 dollar
This is the big difference between bitcoin and fiat money, which can hold its value without any cost, because average people are not allowed to produce fiat money but forced to use it
And you need huge amount of resource to ensure the security of the network, that is the mining cost. Anyone can make a fake bitcoin with just coding, but they can not fake hash power, so the hash power will prevent anyone from attacking the system and modify the transaction. In fact the huge energy cost is just a byproduct of the large hash power, it has to be there to ensure the security of the network when millions of funds are transferred in the network
In fact, the huge cost in electricity is not a must, suppose that someone invented a quantum miner, with only 100w of power it can solve a block average 120 minutes, then the network will be very green with 12 such miner. However, he might need to spend billions of dollars to produce such a miner, and the wealth invested might be much higher than electricity cost of ASIC miners, so the cost still stays high
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It does not matter what technology you use, it is the money's credibility matters. As long as banks are using fiat money in their network, no difference than today's banking. But if they go ahead with running their own alt-coin, then they will immediately lose the edge before bitcoin
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There is, called money printing, but only exclusively provided for the banking class. Or, if you are very close to your banker friend, you should also have some HYIP to invest in
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Just a digital fiat money using blockchain as transaction network. They can change the money supply as they wish, create money out of thin air, no one except they can create money on this blockchain, thus the mining cost is not needed. A simple upgrade of the client will double the money supply In order to keep bitcoin's most attractive promise of limited supply and anti-inflation property, the protocol should be impossible to change even you have the strongest army in the world. However in a government issued cryptocurrency, the money supply is not transparent, even the government claim that the supply is limited, the credibility of that claim is just like any other claim from the government
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Just give them some smart phone or tablet and they will pay each other using bitcoin to exchange things
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The financial crisis is over because FED printed 4 trillion dollars, now these dollars are all in the commercial banks' account and can be used to drive any kind of projects. As long as people believe in USD's value, those added trillion dollars are added wealth since they can drive the production of wealth
But if average house hold believe that dollar's value should drop to 1/5 because of FED printed 5x money, then the money printing will not work any more. Unfortunately, it might take many decades before people have that kind of understanding of fiat currency, maybe never
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Wait for the next bubble, dump it when price exponentially shoot up and wait for a 10% lower price to buy back 1.1 BTC
Invest and get return in BTC is extremely difficult, unless you are providing BTC only business, like exchange and wallets
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Another potential area is international trading and remittance, but that requires user to have exchange with good liquidity on both ends. I observed that some small companies are using bitcoin to do business with China due to its slow foreign currency settlement process.
Surprisingly, there are not a lot of progress in the most possible area - game and software purchase on internet. So far the major software company and game company have not accepted bitcoin payment, which should be the most convenient way for them to expand foreign market sale
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I guess at certain degree, the block size will stop its fast growth. That is when most of the people who are capable of use bitcoin have all involved
Given bitcoin's no central bank control thus high short term volatility, it will less likely to be used in daily commercial activities (And many countries have developed domestic third party/mobile payment system which can do real time and instant transactions with very low transaction fee, bitcoin does not have advantage in this area)
International remittance and long term anti-inflation storage is two major usage. These usage have a less customer base and less frequent transaction (You send money to another country once a month, saving once a month), so transaction capacity should be manageable for many years to come with a 32MB block size
International trading is another potential area, but due to the high cost of international transport, it might only happen at wholesale level, large transaction volume instead of frequency
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Based on math? How can you subscribe it? There is no way that bitcoin price will hit $20,000 for entire time and miners will sure dump here and there, and there will be some whale pump again or may be they will make it stuck at some point so there is no chance that price will get to $20,000 with the high demand too
It is indeed worth worry about the value if you have not done some research and can not see the demand from your view. But no matter how high the demand is, capital will always first go to the mining, which is the lowest possible cost, so the price should stabilize somewhere near the mining cost, which is around 200-300 dollars right now Based on my research, the net supply on market will be between 5000-7000 coins per day (see my signature). And to maintain an exchange rate of $300, you need only 1.5 million to 2.1 million dollars net capital inflow. That is about the worth of a large sized apartment in major big cities Or, one dollar per person per day if there are 1.5 to 2.1 million users. Do you still think it is not possible to reach 20K? That requires 10 dollars worth of purchase per day per user for 21 million users
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Ever wonder why a young looking president turns old with grey hair and bad looking skin in less than 5 years in power? He has to push that damn button multiple times a day... This! It really depends. Many people are pressing that button multiple times a day to earn some billion dollars. It is very difficult to tell if you should kill people when political and religion are mixed in the decision making I read somewhere that one life worth 10 million dollars (Based on life threatening job's pay out, some people are willing to die for 10 million dollars). So 1 billion dollar is a sweet deal, you can contact that guy, make a contract to send half of that money to his relatives after you press the button, and they will become new wealthy family, and you keep the rest But the button should not be pressed if that guy is not interested
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Increased publicity is always good, then all the banking people will know blockchain and bitcoin. And they will learn the difference between bitcoin and blockchain technology later (Most of the people have no idea about where fiat money is coming from, bitcoin will show them a clear picture and then they will compare with existing system to see the difference)
Blockchain is a technology to do transactions, but the most important is what it transacts
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Jesus people, blockchain technology is nothing more than a sophisticated distributed transaction ledger. I'm sure many tech savvy companies will look at the viability of using that type of system. How cool would it be if you could have a complete transaction record of everything your company does on every computer you have around the world updated automatically and continuously. Pretty cool, eh? Now does that do anything for Bitcoin? No, not in the slightest.
There are hundreds of alt-coin out there all using blockchain technology, none of them have any real meaning because of not enough consensus The biggest benefit of bitcoin is to create a strict monetary policy discipline, but that is exactly a bank or large enterprise do not want to have (They like to create credit at will, or reverse transaction when they see fit), using blockchain will remove their ability to control the money, how is that useful? Only when several banks from different countries are cooperating, they might need such kind of trust-less setup, but that will involve lots of exchange at both ends. Today they are using currency exchange contract, e.g. each bank setup an account in another bank with similar value, enough simple and works well BANKERS BEGIN USING BLOCK CHAIN TECHNOLOGY WITHOUT BITCOIN Read: https://www.cryptocoinsnews.com/bankers-begin-using-block-chain-technology-without-bitcoin/Exactly, BNY Mellon even created their own alt-coin already, and backed by the bank budget. Technology is free, once invented, everyone can use it, but that still does not make their alt-coin better than bitcoin, because it can not gain world wide trust when it is based on fiat money
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They're looking at blockchain technology, which is quite different from BTC itself. I believe Barclays and a pool of the world's largest banks could create their own blockchain, to move money between themselves, and only between themselves.
Banks typically do not move money between themselves, they only record the transaction in database, and at the end of the day, do settlement and debit/credit the total difference between transactions to and from bank A on an account that is owned by bank A. That's why Visa and MasterCard can do thousands of transactions per second, since those transactions are only recorded in their database, never broadcasted. And most of those transactions cancel each other between banks, the net result after settlement is a small amount to debit/credit bank accounts If they employ blockchain, they will start to move money for real between them. And that will waste a lot of resource and create lots of accounting difficulties
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Jesus people, blockchain technology is nothing more than a sophisticated distributed transaction ledger. I'm sure many tech savvy companies will look at the viability of using that type of system. How cool would it be if you could have a complete transaction record of everything your company does on every computer you have around the world updated automatically and continuously. Pretty cool, eh? Now does that do anything for Bitcoin? No, not in the slightest.
There are hundreds of alt-coin out there all using blockchain technology, none of them have any real meaning because of not enough consensus The biggest benefit of bitcoin is to create a strict monetary policy discipline, but that is exactly a bank or large enterprise do not want to have (They like to create credit at will, or reverse transaction when they see fit), using blockchain will remove their ability to control the money, how is that useful? Only when several banks from different countries are cooperating, they might need such kind of trust-less setup, but that will involve lots of exchange at both ends. Today they are using currency exchange contract, e.g. each bank setup an account in another bank with similar value, enough simple and works well
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