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December 29, 2017, 08:14:30 AM |
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So the real question for Cyprtocurrencies is are they economical. To be economical, the cost to sustain them, the actual "mining" costs, needs to be economical for the number of transactions. So you need to look at the cost of the transaction and see if the mining costs are sustainable. Bitcoin has a huge cost to mine this is the cost of the computers and the electricity to run them. As time goes on the computations get harder and harder making transaction costs higher and higher and the price always going up this is sustainable but at some point there will be no more coins to mine and there will have to be transaction costs charged. As the price levels off and there will be no more currency created (out of thin air) there will be no way to pay for the mining except through transaction fees. Now if miners want to cover the costs to mine they will have to take a portion of the transaction and for this to be economical it can only be a small fraction of the transaction value. So the currency must be able to accommodate 10s of thousands of transactions per second at a fraction of the amount of the transaction. So far bit coin does about 3-4 transactions per second. So we are not even close yet. The real question is is it possible to have a sufficiently "hard" (read secure) cyrptocurrency that can accommodate 10s of thousands of transactions a second at a cost that is a fraction of the transaction? Currently the big credit card companies are doing it at about 2%. The question is can a Cryptocurrency do the same thing securely at a lower cost? Not yet and may be not for a long time if ever.
The value of a cyrptocurrency is not it's price it's the technology that supports it. The Tech is open source and can be implemented by anyone so what you are "buying" now are Tulips.
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