Bitcoin Forum
December 06, 2016, 08:30:27 AM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: [1]
  Print  
Author Topic: Does profitability matter?  (Read 1834 times)
anderxander
Member
**
Offline Offline

Activity: 70


View Profile
May 30, 2011, 01:58:07 AM
 #1

Does long term profitability for mining really matter? We all know bitcoins will stop being released at some point which means at some  point just trying to add computer power to increase odds of finding coins to make money won't make sense. So what's the point? The early profitability is bait to get people started. Once bitcoins are done being released what will be the point in running miners? To make all those bitcoins you just spent thousands on mining and the transactions you are going to make with them good. By running your machine you will be protecting  your transactions and everyone else s. . This is the true value of bitcoin. The major problem to overcome for bitcoin to me is paying electric companies to power the network.

 

1NhQB9dPCRKWJGBJmBhNJxCUnbrbXTiYY2
1481013027
Hero Member
*
Offline Offline

Posts: 1481013027

View Profile Personal Message (Offline)

Ignore
1481013027
Reply with quote  #2

1481013027
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
rezin777
Full Member
***
Offline Offline

Activity: 154


View Profile
May 30, 2011, 02:04:55 AM
 #2

Transaction fees will replace the block reward. Thanks for playing.
Braden
Jr. Member
*
Offline Offline

Activity: 42


View Profile
May 30, 2011, 02:38:48 AM
 #3

Current transaction fees make up an irrelevant fraction each block, and there is discussion of reducing the minimum fee in the client. I fail to see how transaction fees will be sufficient to sustain mining?

1PVxeKo1K2TvDLiAe7hzVttDNHjqAGwcLD
RyNinDaCleM
Legendary
*
Offline Offline

Activity: 1988


Legen -wait for it- dary


View Profile
May 30, 2011, 02:48:31 AM
 #4

Mining will go on for quite a while! Only a 1/3 of the BTC has been found. With increasing difficulties, it has been, and will continue to take longer to solve a block. When you become severely underpowered, it becomes too inefficient to mine. Then you start buying BTC.

rezin777
Full Member
***
Offline Offline

Activity: 154


View Profile
May 30, 2011, 02:54:08 AM
 #5

Current transaction fees make up an irrelevant fraction each block, and the there is discussion of reducing the minimum fee in the client. I fail to see how transaction fees will be sufficient to sustain mining?

Look into your crystal ball and tell me how many transactions fees are included in the block after the first halving of the block reward.
anewbie
Jr. Member
*
Offline Offline

Activity: 31


View Profile
May 30, 2011, 02:56:51 AM
 #6

Current transaction fees make up an irrelevant fraction each block, and the there is discussion of reducing the minimum fee in the client. I fail to see how transaction fees will be sufficient to sustain mining?

The miners can decide what transactions to include in a block.  It does not appear to me that any actually do much selection.

That being said, once the number of bitcoins becomes small or non-existent for finding a block, miners will become more selective.  Some may not accept free transactions.  Others may only accept a small number.  The transaction fee will determine whether your transaction goes through or not.


Braden
Jr. Member
*
Offline Offline

Activity: 42


View Profile
May 30, 2011, 02:58:36 AM
 #7

Current transaction fees make up an irrelevant fraction each block, and the there is discussion of reducing the minimum fee in the client. I fail to see how transaction fees will be sufficient to sustain mining?

Look into your crystal ball and tell me how many transactions fees are included in the block after the first halving of the block reward.

I'm asking, not stating. Why is it assumed transaction fees will be sufficient?

1PVxeKo1K2TvDLiAe7hzVttDNHjqAGwcLD
Vladimir
Hero Member
*****
Offline Offline

Activity: 812


-


View Profile
May 30, 2011, 03:01:29 AM
 #8

I'm asking, not stating. Why is it assumed transaction fees will be sufficient?

Because free self regulating market forces will sort it out. As opposed to "some wise guy will tell us what to do".

-
Braden
Jr. Member
*
Offline Offline

Activity: 42


View Profile
May 30, 2011, 03:02:46 AM
 #9

I'm asking, not stating. Why is it assumed transaction fees will be sufficient?

Because free self regulating market forces will sort it out. As opposed to "some wise guy will tell us what to do".


and why is it assumed that a perfectly competitive market can price the externality of computational power properly?

1PVxeKo1K2TvDLiAe7hzVttDNHjqAGwcLD
Nythain
Jr. Member
*
Offline Offline

Activity: 56



View Profile
May 30, 2011, 03:03:33 AM
 #10

One could assume that as the bitcoin bounty for a solved block decreases, miners and pools will be more selective in only allowing transactions with fees to compensate. This will in turn spur more transactions with fees because people want their transactions processed as quickly as possible. Even if the fee is very small, as more people start paying them for every transaction, it should add up.

It could also be assumed that as the bounty for solved blocks decreases down to nothing, the value of the bitcoin might very well increase, a lot. At this point in time, bitcents and fractions of become more valuable, especially when you consider that there can only be ~21 million minted. The number in circulation could be assumed to be less due to wallet.dat losses and bitcoins lost to the void in rare occasions.

While 0.00001btc might not be worth much now, it could possibly be worth more than 1btc by the end of the minting process. All of this is coulds and assumes though, everything could totally crash and fail before the minting process even draws near an end. Who knows. Just throwin some logic out there.

anderxander
Member
**
Offline Offline

Activity: 70


View Profile
May 30, 2011, 03:06:44 AM
 #11

What about the fact that you must pay USD for electricity? This forever ties bitcoin to the dollar and makes the dollar the base of bitcoins.

1NhQB9dPCRKWJGBJmBhNJxCUnbrbXTiYY2
Braden
Jr. Member
*
Offline Offline

Activity: 42


View Profile
May 30, 2011, 03:09:03 AM
 #12

Is there data available as to the rate of growth in bitcoin transactions, and percentage of those transactions that involve fees?

1PVxeKo1K2TvDLiAe7hzVttDNHjqAGwcLD
KnuttyD
Member
**
Offline Offline

Activity: 110



View Profile
May 30, 2011, 03:17:41 AM
 #13

What about the fact that you must pay USD for electricity? This forever ties bitcoin to the dollar and makes the dollar the base of bitcoins.
Only if you pay USD for your electricity

If I helped you in some way, and you feel obligated to do so, you can tip me some coin!
1KVadqbELY3KuJhkm9rDtcwxZknhRsfPHY
anderxander
Member
**
Offline Offline

Activity: 70


View Profile
May 30, 2011, 03:23:17 AM
 #14

What about the fact that you must pay USD for electricity? This forever ties bitcoin to the dollar and makes the dollar the base of bitcoins.
Only if you pay USD for your electricity

Who pays btc for their electric?

1NhQB9dPCRKWJGBJmBhNJxCUnbrbXTiYY2
jme621
Sr. Member
****
Offline Offline

Activity: 308



View Profile
May 30, 2011, 03:25:55 AM
 #15

What about the fact that you must pay USD for electricity? This forever ties bitcoin to the dollar and makes the dollar the base of bitcoins.
Only if you pay USD for your electricity

Who pays btc for their electric?


think he was referring to those who mine and dont live in usa/usd countries, thus not paying electric in usd but their native currency and thus showing why its not tied to the dollar as stated

Nythain
Jr. Member
*
Offline Offline

Activity: 56



View Profile
May 30, 2011, 03:26:52 AM
 #16

What about the fact that you must pay USD for electricity? This forever ties bitcoin to the dollar and makes the dollar the base of bitcoins.
Only if you pay USD for your electricity

Who pays btc for their electric?

Some people pay Euros, others GBP, others Rupees, you get the point... not everyone lives in the US and not every country's currency is the USD Tongue

rezin777
Full Member
***
Offline Offline

Activity: 154


View Profile
May 30, 2011, 03:36:02 AM
 #17

Is there data available as to the rate of growth in bitcoin transactions, and percentage of those transactions that involve fees?

http://blockexplorer.com/
anderxander
Member
**
Offline Offline

Activity: 70


View Profile
May 30, 2011, 11:20:09 AM
 #18

What about the fact that you must pay USD for electricity? This forever ties bitcoin to the dollar and makes the dollar the base of bitcoins.

Only if you pay USD for your electricity

Who pays btc for their electric?

Some people pay Euros, others GBP, others Rupees, you get the point... not everyone lives in the US and not every country's currency is the USD Tongue

I've traveled all over the world, I understand how it works.

Let me rephrase. Who doesn't use a centralized currency to pay for electric? I think a major problem for bitcoin is the conversion to a centralized currency to pay for the electric to run the network.

 

1NhQB9dPCRKWJGBJmBhNJxCUnbrbXTiYY2
triforcelink
Member
**
Offline Offline

Activity: 112



View Profile
May 30, 2011, 05:38:30 PM
 #19

What about the fact that you must pay USD for electricity? This forever ties bitcoin to the dollar and makes the dollar the base of bitcoins.

Only if you pay USD for your electricity

Who pays btc for their electric?

Some people pay Euros, others GBP, others Rupees, you get the point... not everyone lives in the US and not every country's currency is the USD Tongue

I've traveled all over the world, I understand how it works.

Let me rephrase. Who doesn't use a centralized currency to pay for electric? I think a major problem for bitcoin is the conversion to a centralized currency to pay for the electric to run the network.

 

well, when bitcoins become more popular and stable, maybe power companies will start accepting them and then you will be able to buy your power with some btc. If the world governments keep running their currencies into the ground, bitcoins have it made.

Pages: [1]
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!