The Future of Bitcoin: Corporate Mines and Network Peering?
What’s the end game of the Bitcoin mining arms race? Miners are building ever-more powerful hardware and larger data centers, trying to stay a step ahead of their rivals and keep pace with “the difficulty” – algorithm changes that make it progressively harder to earn new bitcoins.
Some Bitcoin watchers believe the network will ultimately shift from mining for new coins to a model based on transaction fees, which could accelerate a shift of Bitcoin hardware into data centers and the creation of peering networks to manage fees, just as current peering agreements seek to reduce network transit costs.
The long-term outlook for Bitcoin is important for the data center industry, where some leases can run from three to 10 years. The emergence of Bitcoin has seen the cryptocurrency soar in value, accompanied by rapid advances in the hardware required to successfully capture new coins. The Bitcoin protocol is designed so that these rewards will become harder to earn and will shrink over time. That means that the economics and business models of bitcoin could shift over the life of a data center lease.
http://www.datacenterknowledge.com/archives/2014/01/24/the-future-of-bitcoin-mining-or-fees/
