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Simple answer ... no. Longer answer the hashrate will adjust in time. So a reduction in hashpower of 50% would only be a minor effect. The average block time would be 20 minutes, time to next adjustment would be 2 to 4 weeks. Certainly survivable. Even a 75% reduction wouldn't be fatal. It would take 1-2 months to adjust to normal and 40 minutes blocks means the network would limp along until the adjustment.
If something took 99% of computing power offline then it probably means Bitcoin is done, then again "it" probably took you offline too making the point kinda moot. If you think it is a major concern then either support an alt-coin which has a shorter adjustment window or build a new one.
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Can someone explain to me how you can short BTC with "leverage"? You can do this in financial markets (but not in physical markets). For equities, you need a locate in order to short to satisfy deliver but in bitcoin the buy side of your short sale MUST get the physical immediately so it is not possible to short more than 11MM BTC right now and that is if everyone would lend theirs to be shorted.
What am I missing?
Since the site will charge shorters margin they can offer interest the those who have BTC. i.e. someone who wants to remain long could deposit BTC and collect interest on them. Those who want to short could borrow those BTC. The site collects a spread on interest plus any trading fees. If more people want to short then go long then margin rates for going short will be higher. If more people want to collect "risk free" interest then short then interest for margin will be lower. Note I have no knowledge of the site in the OP just describing in general terms how it works in every other asset market. |
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A drink (as in my original post) now would cost around 0.0053 BTC (assuming $1.25 cost and $235 exchange rate).
Bitcoin use in Africa has been in the news lately. Are any Africans on the forum that can give us insight into how well-known SI prefixes are on that continent, especially in the poorer nations?
I could use a cold drink for a 5 mills right now.* *To those who realize 5 mBTC is $1.17 not $1.25 it doesn't really matter. Stores simply set prices where they are consumer friendly (hence lots of $0.49, $0.25, $0.99, etc). If the store couldn't maintain their margin at 5 mBTC the drink would be 6 mBTC. Given that 1 mBTC provides ~20 cent granularity not much reason to make it more complicated like 5.35 mBTC to ensure that the store collects the "full" $1.25 equivelent (a made up price anyways). |
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If it hit $1M then it means bitcoin is the currency of the world, and that there would be nothing to cash it out, everything would be traded in bitcoin  I don't think he means an exchange rate of $1,000,000 USD per BTC but rather if someone personal holdings were worth $1M. Like if you had $1M worth of gold would you sell the gold? How exactly would you even determine your personal holdings? If 1 BTC isn't worth 1 million then it's hard to know how much an entire persons holdings are worth when you have alt currencies, and Bitcoin cryptostocks, and the mining. It was an individual question. You don't know how much YOUR Bitcoins are worth? No problem send me your wallet.dat by email and I will email you when your Bitcoins are worth $1M. Problem solved. |
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I think what might make it easier for people to understand what's going on behind the scenes is for the Bitcoin-QT software to SHOW THE BRAND NEW ADDRESS as soon as it is used for something, instead of keeping it "hidden" behind the scenes. Ding ding we have a winner. IIRC the "reason" given for hiding change addresses from users is to insulate the user from the internal workings and to prevent users from doing this which would compromise their anonymity. There is no good reason to re-use addresses and certainly no reason to re-use a change address. The QT client is like a hardcore paranoid crypto-nerd version. IMHO all addresses should be visible, the entire wallet more transparent because confusion on this (and other related issues) is pretty common. Then again QT client is becoming less and less useful for new casual users anyways. The requirements of being a full node will push most users to light clients and eWallets but there still is no good reason to hide (some) of the addresses. It just creates confusion. |
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The QT wallet doesn't show you how much each address has it shows you how much ALL of your addresses combined have. So when the wallet says "100 BTC" it actually means "the sum of the unspent outputs sent to addresses that I know the private key for equal 100 BTC".
Address #3 in your query above is another address inside your wallet. It might be easier if you post the tx id but here is an example.
You have 100 BTC you want to send 50 BTC to Address A.
Your wallet will find a set of unspent outputs >= 50 BTC. These may come from more than one address in your wallet. You may see some transactions have dozens of inputs.
The wallet will find the sum of the unspent outputs to use as an input in this new tx. Lets say it is 53 BTC.
The wallet will create a tx sending 50 BTC to the address you specify but since the input set is 53 BTC (and you can't partially spend an unspent output) it will then take a BRAND NEW address from your wallet and direct the other 3 BTC there.
So:
Input:
(collection of unspent outputs to addresses in your wallet) - 53 BTC
Output
Address A - 50 BTC
Change Address (a never before used address from your wallet) - 3 BTC
Input = Output. The old unspent outputs become spent and the tx creates two new unspent outputs which will be inputs for future txs.
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Why is there so much resistance to change? It's a protocol, not a bible..
Because Bitcoin exists as independent nodes. You can't force everyone to stop the old version. The old version will always exist. So in any controversial change the most likely scenario is an incompatible fork with some users/miners/merchants supporting one version and some supporting the other. Of course both will call their version "Bitcoin" and that is just going to lead to chaos. There is no technical reason why tomorrow some % (no it doesn't need to be 51% it could be 1% or 99%) of miners don't change the rules so the block reward goes back to 50 BTC and says there forever. It could be done. It would be an almost trivial change from a technical standpoint. However some majority of current users would refuse that change and keep running "original Bitcoin". For good or worse the core components of Bitcoin will probably never be changed. The only changes which will occur are ones which are absolutely mandatory. An example would be ECDSA is partially compromised so developers create a new address type using a more secure form of cryptography. At some block after most nodes are aware of this change (and thus don't fork) transactions transfering funds from the old address to the new ones could be created. Anything that doesn't need to change likely will never change. |
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Correct, so we could arbitrarily agree as a community that the old mBTC is the "New BTC" and that there are 21 Billion "New BTC" available. What if everyone doesn't agree? I don't. So yes as I pointed out if you have complete unanimous agreement of every coinholders, merchant, developer, exchange, etc then sure you can make a change. Baring that what happens when some sites start advertising prices in old BTC and some in new BTC? Someone on new version of client sends 1 BTC to someone with newever version of client. Each one things the other messed up because on their clients they see a different amount. MtGox prices in "old BTC" but doesn't call it old BTC it simply is BTC and BTC-e prices in "new BTC" but also calls it BTC. Quick 1.23 BTC is it old BTC or new BTC? It isn't going to happen just like tomorrow we could decide a meter isn't a meter it is a "new meter" which will also confusingly be called a meter expect it is 3x as long as an "old meter" which will also be called a meter. That could happen, but it won't because it would be stupid and pointless. Of course, the real issue is that it becomes uneconomical to send less than 1 mBTC (100,000 Satoshis) and have it confirmed quickly due to fees that the client and/or miners require. Fees will only get more expensive as traffic increases. There are other threads looking at that issue though. Fees have been reduced in the past, will be reduced again in the next version, and will likely be continually reduced and decentralized more in the future. There is no required fee on high priority transactions. The min mandatory fee only exists as a spam prevention mechanism to protect the network from Denial Of Service attacks. It can be continually lowered to a point which balances the needs of the network with the need to protect the network. |
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Nice, thanks! That's good to know. So the "winning number" is already bound to the target account that will be receiving the bounty, so there's no way somebody can cheat and keep the bounty for themselves.
Well it is more complicated and secure than that. A solved block is only good as single specific entity. Change any aspect of the block (timestamp, previous block hash, remove any transactions, add a transaction, etc) then the block will have a new random block hash which will not meet the difficulty target. |
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You keep interchanging the words blocks and transactions. They are distinct and different objects. A transaction is a transaction. A block is a collection of transactions. A block references the block hash of the previous block. This cryptographically links the blocks together to securely forms the blockchain. Also, I thought transaction fees were something that continuously kept being generated over time, as value is spent and sent around the network, eventually trickling back to the original miner who found the block, essentially paying them a dividend over time. Or, is it a one-time reward, as you mentioned below in your example? Weirdly nobody has ever mentioned this for like three years and then suddenly this week you are like the third or fourth person who had that misconception. No a transaction fee is paid on a single tx. It becomes part of the single block reward for the block where the tx is added. The block reward is paid to a single miner (or in the case of a pool the single pool) which solved the block. There is no perpetuate revenue stream from a single transaction. Now new transactions (and thus new fees) are continually being created but each tx and its fee is separate. |
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The hash the miners are looking for only solve a particular exact block. Part of the block is the reward address where the block subsidy and all tx fees will be sent. Change anything in the block (including the coinbase = miner compensation tx) and the block has a new header and the "winning hash" is no longer valid for the modified block.
A miner could withhold the "winning hash" (to reduce everyone's compensation including his own) but the block hash is simply a number that solves a particular, exact block. It is utterly useless (just as useless as any other random number) for any other purpose.
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None of that is correct.
A transaction is a transaction.
A block is a collection of transactions.
All blocks reference the prior block creating a blockchain.
The collectively forms the public ledger. A record that can be used to authenticate future transactions.
Unconfirmed transactions are relayed between nodes.
The pool of unconfirmed txs is called the memory pool.
When miners begin to work on a new block they take txs from the memory pool, put them into the block (a simplification) and search for a solution to the block.
Transaction fee (plus block subsidy - currently 25 BTC) is paid to the miner who solves the block.
When a block is solved it is relayed to all peers who verify it and add it to the blockchain.
If the block you solve has 230 txs with fees totally 1.1 BTC you (as the miner who solved the block) would receive 26.1 BTC (1.1 BTC tx fees + 25 BTC subsidy). Most miners today work in pools, in this case the pool is actually the "miner".
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1) It is theft. The "lost coins" (including not so lost ones) don't belong to you.
2) It is changing the rules after the fact. If Bitcoin implemented this from day 1 it would be not quite as bad but there is a "social contract" in Bitcoin. Here are the rules, the system is volentary, if you don't like them you don't need to use them. Changing the rules after the fact is a bait and switch.
3) This has been proposed at least a hundred times by a hundred different people going as far back at 2010.
4) It won't happen. I am not saying it won't happen because it is a bad idea it simply won't happen. Bitcoin requires consensus. Any break from the consensus is a hard fork. The existing "no coin theft" Bitcoin will still exist. You can't force it to stop. The bad news is two different completely incompatible bitcoins both calling themselves "bitcoin" is just a recipe for mass chaos and confusion. The utility value of both systems declines.
5) If you want to steal coins then make a new crypto-currency, call it "steal-a-coin" or something and see how popular it is.
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Nothing needs to be converted. Yes in the QT wallet you can have it display your balance as BTC, mBTC uBTC, or satohis it isn't converting your coins it is simply changing how they are displayed.
At the protocol level everything is already recorded in satoshis. Always. Every tx since the very first block. So if you receive 1 BTC it will be recorded in the blockchain as an unsigned 64bit integer 100,000,000. Your client "knows" it takes 100,000,000 units to be a BTC and thus displays it as 1.0 BTC by default but you can easily change how it is displayed. How it is displayed has no effect on how it is transmitted or stored in the blockchain.
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No but that has nothing to do with the price of tea in China. The point is that $240K in USD (or other fiat equivelent) being injected into BTC economy is nothing, a rounding error. If the exchange rate falls it will have nothing to do with not enough new money coming in to keep up with new BTC printing.
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No it's not sustainable. I believe we would need to see a minimum of around $242000 USD/day of new money to maintain $192 USD/BTC (assuming ~65% profit for miners and 3600 BTC minted/day).
Uh if you think $240K isn't possible well our tiny company does about 20% of that on a slow day (and >100% of that on our best days) honestly without really trying. Yes that is cold hard fiat being used to buy BTC (not day trading buy a direct conversion of fiat for BTC). So via TC, LLC $50K fiat inflows .... entire balance of all other exchanges, brokers, service providers, plus all OTC traders <$190K? I doubt it. |
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It's swinging now because it is still in price discovery mode. Whether it is going to be $1 or $1,000,000 one day it's going to reach equilibrium.
Yes, equilibrium. That's EXACTLY what Bitcoin needs to be accepted as a currency. But when will that happen? For all we know, that might not happen until 2140, when the last bitcoin is mined. I would love to see Bitcoin become a currency, but it needs to hit that equilibrium point. How can we make it get to a point of equilibrium sooner rather than later? There is no such thing as perfect equilibrium in anything, ever. The amount of USD inflation varies from month to month and year to year. This is for a single synthetic financial construct totally under the control of a single central bank. Even they can't prevent volatility in the rate at which the USD devalues. There is no magic point where Bitcoin (or anything) will suddenly be at equilibrium and have 0% volatility however volatility is declining and it will continue to decline as the markets get deeper, faster, and more efficient. Volatility a decade from now will be significantly lower. Price apreciation isn't the same thing as volatility. Bitcoin is also expanding rapidly, number of users, number of merchants, amount of coverage and that is reflected in the price. That too will eventually slow, as a case in point look at the growth of number of internet users. As Bitcoin becomes more and more widespread the number of potential new users will shrink and the upper rise in exchange rates will slow. As someone above said reporting that Bitcoin wont make it less than 5 years after its creation is probably mature. You seem to have made up your mind so 1) Sell all your BTC except those you are comfortable seeing go to $0.00 2) Transfer it to a paper wallet. 3) Check back in after 20 to 30 years. |
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All things have volatility. The exchange rate between EUR and USD for example is continually changing however the changes (most days are relatively small). Want to know why? The Forex market is $4T per day, or >$1.3 quadrillion US dollars annually. Think about that a second $1,300 trillion (although I just like saying quadrillion) dollars a year in pure speculation (and hedging, arbitrage, etc but no actual commerce). The entire global GDP is roughly $70T annually.
Bitcoin trade volume on a good day might be $10 to $20M USD. EUR:USD exchange rate can vary by as much as 2% on a high volatility day and BTC:USD exchange rate can vary by 40%. Why? Simple the EUR:USD trade has maybe 60,000,000x as much volume. Will BTC:USD ever be traded in trillions of USD per day? Who knows but as volume ramps up (we are not talking 20% higher volume but 20,000% higher volume) volatility will come down. The markets will get deeper and more steep.
The idea that people don't accept rapidly falling prices is a falsehood. Take HDTV for example. Everyone knew when they were released there would be better ones for half the cost in a year. Hell most early adopters would tell you that AS THEY WERE BUYING ONE. As the performance improved and prices fell at each price point people bought knowing the track record that lower prices would be available in 3 months, 6 months, 12 months, etc. At the point where the utility of a TV today outweighed the potential savings tomorrow they bought.
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Bitcoins Direct is accepting new clients on Tuesday. It requires the use of PGP and all funding is by bank wire, but it is a low cost, secure method to get coins same day. Standard fee is 1.29% of wired amount. https://bitcointalk.org/index.php?topic=87094 |
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