Bitcoin Mining: Cause and Effect

[omegaaf]

This is a little theory I am working on about the impact mining will actually have. Currently I see one major point people have not covered - Evolution of computing.

In the race and eventual implementation of a digital currency that is produced by processing power will lead to a faster evolution of computing prowess in both silicon based, graphene based and quantum based computers. As mining catches on, it will become more and more prevalent for computers to be built for it, just like that of gaming hardware in which we are currently using as is. We will end up influencing an entirely new genre of hardware specifically for calculation for profit, this will result in a massive splurge of new, much higher throughput devices, technological achievements and much much higher encryption.  

One downfall of this, will be the fight for anonymity. Sooner or later, government will try to put their hand in this pocket, so we will have to develop better, more secure ways to fight them to avoid conviction. But, at the same time, the Internet itself could become a country or universe, it's own governing body, in which case war and many different "countries" could form, censorship and greed will ensue, not to mention, we will end up having many different currencies in which we will have to trade to and from, stifling any e-commerce - nullifying any reason to have a digital currency in the first place.

But there is hope for us if we can overcome greed and stay away from centralization, but if the government and banks/corps get involved.. who knows what might happen.

Please feel free to share any thoughts or feelings you have on this subject. I am looking forward to different views as to what may happen, what causes and effects will become of us.

[lassdas]

a digital currency that is produced by processing power

The first and main purpose of mining is not to produce a digital currency,
it's processing transactions!

The initial distribution (not production) of bitcoins is just a nice, convenient side-effect.

[omegaaf]

a digital currency that is produced by processing power

The first and main purpose of mining is not to produce a digital currency,
it's processing transactions!

The initial distribution (not production) of bitcoins is just a nice, convenient side-effect.

I did not mean for that to sound hateful, I just feel a currency anyone can produce is a lot better than a currency run by banks. Since in the United States, banks have the power to issue currency, the average joe does not. With the bit-mining it gives the average joe a way to make money, much like gold, but based on processing power instead of how hard it is to get out of the ground.

[Etlase2]

I'm not sure what the connection between "more power" and "less anonymity" is. Are you just saying as a consequence of bitcoin becoming ubiquitous that it will become a target for the government? If so, you don't need to throw more power at bitcoin to make its pseudonymity secure, you need to come up with better ways of being pseudonymous if what bitcoin currently provides is not enough.

Unfortunately, I consider bitcoin's hashing for security to be a very big flaw in bitcoin. The costs of new hardware to continue to compete against those who have the money to buy in bulk will likely become more and more difficult for the average joe when returns can only diminish, perhaps drastically, over time. Rather than earning transaction fees, they are fought for in a constant battle of computing hardware--where, just like lawyers in class action lawsuits, most of the winnings go to the ones selling you the hardware or the electricity.

To get a taste of how this could be done differently, see my signature.