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Author Topic: So, what happens when bitcoins stop being produced?  (Read 3017 times)
OgStar
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October 16, 2012, 06:10:58 PM
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Its production will drop by the half every 2 years, what happens when it reach numbers close to 0?

I know people who mined from the start will be rich, but what happens to the economy? People will stop to mine, how will the p2p network keep going?

I'm asking because I see bitcoin as a way to free myself from my government, I'm a libertarian, and I'm having a hard time to figure out how would bitcoin be a persisting solution for international currency.

I've done some researching, and there are a lot of people who consider bitcoin a pyramid scheme, including the developers of solidcoin.
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October 16, 2012, 06:19:13 PM
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There will still be a need for miners to verify transactions. You will still be able to send/receive coins even if there are no more to be mined.

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October 16, 2012, 06:21:46 PM
 #3

Its production will drop by the half every 2 years, what happens when it reach numbers close to 0?

I know people who mined from the start will be rich, but what happens to the economy? People will stop to mine, how will the p2p network keep going?

At this point Bitcoin will be worth enough that transaction fees make mining profitable.

How can I bee so sure? If Bitcoin won't be worth enough by then, it can be considered a failure long before.

I'm asking because I see bitcoin as a way to free myself from my government, I'm a libertarian, and I'm having a hard time to figure out how would bitcoin be a persisting solution for international currency.

Yes, bitcoin is free money. Not as for free, but like free speech.

I've done some researching, and there are a lot of people who consider bitcoin a pyramid scheme, including the developers of solidcoin.

See: https://en.bitcoin.it/wiki/FAQ#Is_Bitcoin_a_Ponzi_scheme.3F

Also, why do you listen to the solidcoin "developers". Its nothing but a cheap copy of bitcoin by people envy of the early adopters, that want to be early adopters themselves. (I'm NOT a early adopter)

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October 16, 2012, 06:23:22 PM
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My BTC0,02 (without insisting you pay me! Grin ):

As the supply of BTC closes in on the 21m cap, its gold-like characteristics (scarcity) come to the fore. Each BTC will hold its value or appreciate in real terms with the expansion of the economy due to the absence of inflation.

Miners can profit from transaction fees (will they remain in the order of 50.000 satoshi?) or bomb out.

Bitcoin might look like a pyramid scheme at first glance but I see one major difference: Ponzi schemes are fraudulent inasmuch as they are based around pretence of the existence of underlying value, whereas BTC is a cryptocurrency with real underlying value in a working economy. Early adopters profit as a reward for having taken the risk of investing in the fledgling scheme before it flourished.

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OgStar
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October 16, 2012, 06:25:48 PM
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Its production will drop by the half every 2 years, what happens when it reach numbers close to 0?

I know people who mined from the start will be rich, but what happens to the economy? People will stop to mine, how will the p2p network keep going?

At this point Bitcoin will be worth enough that transaction fees make mining profitable.

How can I bee so sure? If Bitcoin won't be worth enough by then, it can be considered a failure long before.

I'm asking because I see bitcoin as a way to free myself from my government, I'm a libertarian, and I'm having a hard time to figure out how would bitcoin be a persisting solution for international currency.

Yes, bitcoin is free money. Not as for free, but like free speech.

I've done some researching, and there are a lot of people who consider bitcoin a pyramid scheme, including the developers of solidcoin.

See: https://en.bitcoin.it/wiki/FAQ#Is_Bitcoin_a_Ponzi_scheme.3F

Also, why do you listen to the solidcoin "developers". Its nothing but a cheap copy of bitcoin by people envy of the early adopters, that want to be early adopters themselves. (I'm NOT a early adopter)



That was very helpful and clarifying. Thank you, Akka. I hope your answers will help people who had the same doubts that I had.
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October 16, 2012, 07:06:07 PM
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I'm more interested in what happens after a while, after enough people die and/or lose their wallets. Will we always switch to another type of 'coin'?

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October 16, 2012, 07:11:20 PM
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I've done some researching, and there are a lot of people who consider bitcoin a pyramid scheme, including the developers of solidcoin.
The difference between a pyramid scheme and a similarly-structured legitimate business is that a pyramid scheme doesn't provide a real product or service that has any value and instead moves around money just by enrolling new people into the scheme who bring the new value in themselves. If bitcoins never take off as a realistic way to transfer value from one place to another and all the value comes from speculation, then bitcoin will eventually collapse for the same reason all pyramid schemes eventually collapse.

It comes down to whether you believe crypto-currencies are a real product and a viable technology for use as a medium of exchange.


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Stephen Gornick
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October 16, 2012, 08:09:39 PM
 #8

after enough people die and/or lose their wallets. Will we always switch to another type of 'coin'?

For the person who loses their wallet (e.g., forgot the passphrase, loss of hardware and insufficient backup, etc.), those coins no longer circulate.  That is unfortunate for the owner of those coins, but to the rest of those holding bitcoins the impact is neutral to just slightly positive (as the value of each bitcoin increases slightly).

There are no other decentralized digital currencies in the same ballpark as bitcoin (proof of work, where the level of work needed to be disruptful are well beyond the capabilities of a single actor).

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October 16, 2012, 09:15:28 PM
 #9

People will stop to mine, how will the p2p network keep going?

People will continue mining because the block reward includes not only the new coins (50btc right now) but also a small fee component from each transaction. In the future, if Bitcoin has been successful, the value of these fees will be substantial and may even be worth more than 50btc per block.

Sites that make tons of transactions already pay significant amounts in fees to the miners. SatoshiDice.com has paid over 750 BTC over the last 5 months just in fees and all of this goes to the miners.
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October 16, 2012, 09:31:20 PM
 #10

Technically, Bitcoins will never stop being produced! Hooray!~
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October 16, 2012, 09:42:52 PM
 #11

Its production will drop by the half every 2 years, what happens when it reach numbers close to 0?
I'm not sure, but I think the block reward drops in half every 4 years (not 2).  Which I think makes it more than 120 years before the last new bitcoin piece is mined.  In order for bitcoin to survive 120+ years, it will have to become in widespread use so that transaction fees will be enough incentive for miners to continue mining. On the other hand, I don't expect to survive another 120+ years, so I guess it doesn't really matter to me.

Technically, Bitcoins will never stop being produced! Hooray!~
Are you sure about that?  I thought that once the block reward is less than 0.00000001 BTC, there would be no further new bitcoin mined?

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October 17, 2012, 05:09:40 AM
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Well judging by the hardware BFL is pumping out, it's scary how much GH or TH the hardware dishes out.
If anything the hashrate of the hardware will probably consume bitcoins. I don't know even when I say it sounds dumb, I hope. :<

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OgStar
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October 17, 2012, 05:45:35 AM
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Well judging by the hardware BFL is pumping out, it's scary how much GH or TH the hardware dishes out.
If anything the hashrate of the hardware will probably consume bitcoins. I don't know even when I say it sounds dumb, I hope. :<

It won't consume bitcoins, but it will rise the difficulty and make harder to get bitcoins by mining with gpu.
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October 17, 2012, 05:52:30 AM
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Technically, Bitcoins will never stop being produced! Hooray!~
Are you sure about that?  I thought that once the block reward is less than 0.00000001 BTC, there would be no further new bitcoin mined?

What if the precision has been increased by then? Could not the block reward then be 0.000000000000000001 BTC?
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October 17, 2012, 07:30:58 AM
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I hear it would take at least 150 years for all the bitcoins to be acquired as the internal software has a limit.
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October 19, 2012, 12:02:11 AM
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I hear it would take at least 150 years for all the bitcoins to be acquired as the internal software has a limit.

I hear people make up random statistics as their tolerance for actual facts has a limit.
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October 19, 2012, 01:17:30 AM
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I hear it would take at least 150 years for all the bitcoins to be acquired as the internal software has a limit.

I hear people make up random statistics as their tolerance for actual facts has a limit.


You can make up statistics to prove anything. 83% of people will tell you that!
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October 19, 2012, 01:44:14 AM
 #18

btc has done nothing but gone up in demand, with the exception of when Mt Grox got hacked.


With minners gone and small to medium sized stores accepting bitcoin it will only make it stronger
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October 19, 2012, 05:29:48 AM
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Technically, Bitcoins will never stop being produced! Hooray!~
Are you sure about that?  I thought that once the block reward is less than 0.00000001 BTC, there would be no further new bitcoin mined?

What if the precision has been increased by then? Could not the block reward then be 0.000000000000000001 BTC?

That would take a change to the protocol and there are no good reasons to continue providing a block reward at that point. It is not likely that a value of less than 1 satoshi will be significant for a very very long time. The value of BTC doubling at the same rate that the block reward halves (every 4 years) would mean a deflation rate of about 20%, which is not sustainable.

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October 19, 2012, 09:08:07 AM
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Why worry about what happens in many decades to come! The Principle is being proven and people can vote with their feet!

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