prizzy
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June 05, 2011, 12:29:35 AM |
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i think sweft needs to dev his own ecurrency software however he wants. let him see how his ideas actually pan out in an open market and the real world before he calls out the devs of bitcoin because they didnt do something right. well it sure appears they are doin somethin right as we speak cause the price of bitcoin is soaring.
sweft, go get an education.
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MoonShadow
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June 05, 2011, 12:30:18 AM |
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This entire thread is completely irrelevant. Harold Camping says the world is going to end in october.
I'm not impressed with his track record. If there were a way to short Harold Camping's predictions, I'd do that.
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"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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Quantumplation
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June 05, 2011, 12:30:44 AM |
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So much ad hominem it hurts.
Listen, the hashing rate doesn't need to INCREASE to maintain security. If the hash rate remains constant, the security of the network remains constant.
For the past several months (probably more like the entirety of the project), the reward for mining has been decreasing substantially, due to the difficulty rate increasing. Higher difficulty, less payout for miners. This hasn't created a "catastrophe", or you wouldn't be posting on this forum. In a stable bitcoin economy, the transaction fees for block generation will far outweigh the amount generated by block creation: 100,000 transactions in 10 minutes would mean 500 bitcoins at the new, reduced transaction fee. And 100,000 is roughly the number of credit card transactions per minute... JUST in the US. The system was designed to be a _lasting_, _stable_ economy, and has made assumptions as such. Bitcoin will never reach it's true potential until it becomes one, and that's the goal of the project, so why design it otherwise?
Inflation, on the other hand, is a very real problem, and has caused the outright destruction and mayhem of many massive economies (Germany, Russia, and I'm sure other forum members can provide other examples.) If bitcoin was not designed to avoid these catastrophes, what would the point of it all be?
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NOTE: This account was compromised from 2017 to 2021. I'm in the process of deleting posts not made by me.
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FreeMoney
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Strength in numbers
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June 05, 2011, 12:32:49 AM |
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There's a simple fix to this solution. Don't decrease intensives for people to mine. Once you do you compromise the network.
I don't know why you people are so hostile to this. It should be very easy to understand.
Make it. It isn't Bitcoin it's something else, something I think will fail. Seriously 99.999% of the work to make it is done, yet it isn't happening. This is because it is a crap money.
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Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
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theboos
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June 05, 2011, 12:55:00 AM |
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Transaction fees today are admittedly low enough to not support mining. However, if Bitcoin is still operational in 2040 (and is not proven inherently insecure), it will by then very likely be a very heavily used currency, to the point where the current volume of transaction fees will solely support mining. Some conservative predictions (if you think these are optimistic, consider the growth of the internet in the last ten years): - Transaction volume will rise 10,000-fold
- Value will rise to $1000 due to: deflation, expanding user base, and decreasing production rate
Finally, here's the genius of the difficulty adjustments: if mining ever becomes too expensive or not profitable enough, people stop mining until the difficulty decreases enough so that it is profitable to mine again. The only reason this wouldn't work so well today is that transaction fees are not steady; there are many blocks without fees or even transactions. If the 50 BTC bounty disappeared tomorrow, many miners would stop mining and the difficulty would decrease until the few bitcents per block of transaction fees were profitable enough to mine for. Simultaneously, users would be forced to send larger transaction fees to have their transactions processed promptly. All of this serves to stabilize the block production rate. Edit: Quantumplation covered half of my points...
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Sweft (OP)
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June 05, 2011, 01:02:02 AM |
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Transaction fees today are admittedly low enough to not support mining. However, if Bitcoin is still operational in 2040 (and is not proven inherently insecure), it will by then very likely be a very heavily used currency, to the point where the current volume of transaction fees will solely support mining. Some conservative predictions (if you think these are optimistic, consider the growth of the internet in the last ten years): - Transaction volume will rise 10,000-fold
- Value will rise to $1000 due to: deflation, expanding user base, and decreasing production rate
Finally, here's the genius of the difficulty adjustments: if mining ever becomes too expensive or not profitable enough, people stop mining until the difficulty decreases enough so that it is profitable to mine again. The only reason this wouldn't work so well today is that transaction fees are not steady; there are many blocks without fees or even transactions. If the 50 BTC bounty disappeared tomorrow, many miners would stop mining and the difficulty would decrease until the few bitcents per block of transaction fees were profitable enough to mine for. Simultaneously, users would be forced to send larger transaction fees to have their transactions processed promptly. All of this serves to stabilize the block production rate. Edit: Quantumplation covered half of my points... No that's not true. The claim that if it becomes unprofitable mining will decrease, miners will stop, and it will become profitable again. That's ok. It doesn't matter. The security of the network is determined by hash. A decrease in mining is a decrease in hash which is a decrease in security. If hash declines the value of bitcoins will decline. The hash determined the value of the bitcoin, nothing else. The hash gives the bitcoin security. Once hash decreases value decreases. The hash has to keep growing for value to increase.
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MoonShadow
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June 05, 2011, 01:06:19 AM |
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If hash declines the value of bitcoins will decline. The hash determined the value of the bitcoin, nothing else. The hash gives the bitcoin security.
Once hash decreases vale decreases. The hash has to keep growing for value to icrease.
You have your cause and effect backwards. Difficulty follows price, and averages a six week lag. So the difficulty that would match the current rally won't show up for about six weeks. The exchange price of a bitcoin is independent of the security level of the blockchain, but the security level (difficulty) is dependent upon the value.
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"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."
- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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Sweft (OP)
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June 05, 2011, 01:13:13 AM |
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If hash declines the value of bitcoins will decline. The hash determined the value of the bitcoin, nothing else. The hash gives the bitcoin security.
Once hash decreases vale decreases. The hash has to keep growing for value to icrease.
You have your cause and effect backwards. Difficulty follows price, and averages a six week lag. So the difficulty that would match the current rally won't show up for about six weeks. The exchange price of a bitcoin is independent of the security level of the blockchain, but the security level (difficulty) is dependent upon the value. He exchange price is independent of security of the network? Are you joking? I hope so.
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getrichquack
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June 05, 2011, 01:17:14 AM |
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ki.... No hostility here ...just confusion!! I might have it wrong ....but the way i understand the machinations of the Bitcoin algorithm, is that the difficulty ( to solve a block ...producing 50 bit coins) increases periodically. The points at which this will occur can be calculated roughly .. These thresholds are affected ( to a certain degree )by the number of people who are (or have been...past tense) mining ...or the 'Hash rate' of the network computing power combined. The higher the hash rate the ...faster the network approaches a " difficulty increase" threshold. I think where your argument comes unstuck is in the assumption that difficulty will decrease if hash rate decrease. and as i understand it ...It doesn't Lets say everyone stops mining simultaneously ...thus reducing the overall "hash" rate of the network to 0 ...the difficulty to "solve a block" ...won't reduce. It will remain static at that point . If one person re- starts mining the hash rate would be equal to whatever the hash rate of his personal setup was able to achieve....but the difficulty to solve a block would be that same as it was when thousands of people were mining .The difficulty is the same for everyone. It will only increase .It does not decrease. So I fail to understand how the network security is then compromised because less people are utilizing it Maybe i've missed something and you can set me straight ...If so please feel free to explain it to me ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif)
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justusranvier
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June 05, 2011, 01:20:48 AM |
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He exchange price is independent of security of the network?
Are you joking? I hope so.
The exchange price is entirely determined by what people are willing to pay at a given moment and nothing else.
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Quantumplation
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June 05, 2011, 01:25:49 AM Last edit: June 05, 2011, 01:46:06 AM by Quantumplation |
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No that's not true. The claim that if it becomes unprofitable mining will decrease, miners will stop, and it will become profitable again. That's ok. It doesn't matter.
The security of the network is determined by hash. A decrease in mining is a decrease in hash which is a decrease in security. If hash declines the value of bitcoins will decline. The hash determined the value of the bitcoin, nothing else. The hash gives the bitcoin security.
Once hash decreases vale decreases. The hash has to keep growing for value to icrease.
Your assumption that bitcoin derives it's value solely from security is false. A large part is the security, yes, but it also derives from: Convenience. It's DAMN easy to send someone a bitcoin. Intrigue. The concept is really clever. Freedom to property. Cost. It's a LOT cheaper to send someone internationally 1btc than it is 20 dollars. If the hash rate decreases (or stagnates), that does not guarantee that someone will be able to overwhelm the network instantaneously. They still have to ACQUIRE a substantial majority of the networking power. At the CURRENT volume of miners, that's more than the top 500 supercomputers combined. In a stable, vast reaching economy, "competition" (I use the word here for lack of a better term, not to imply that block solutions is a race) for the block solutions would be extremely high, and thus there would be several hundred times more computing power devoted to bitcoin. Transaction fees will more than cover the costs of incentivizing miners, as I outlined above. What you seem to think is that the value of bitcoins at this point will be extremely fluid: A TINY decrease in security will cause mass panic and devalue the currency, causing a cascade. Bitcoins will become stickier than that. In the same way that you cannot notice a 100w lightbulb among 100 other 100w lightbulb, there's a certain point at which the fluctuation of security in the system is undetectable. The value of bitcoins will stabilize. The value of a dollar is not subject to stock-like panic swings, and in the presence of a rich economy, neither will bitcoins. Similarly, the security of the system as a whole is subject to the same sensory threshold phenomenon. The difference in security between 100THash/s and 99THash/s is not equivalent to the difference in security from 2THash/s to 1THash/s. Just because it drops by 1 THash/s in the future doesn't mean it will have the same risks assosciated with dropping by 1THash/s today. Finally, someone with substantial control of the computational power of the network has only limited attack vectors on the system. He can claim he did not spend money which he did for limited amounts of time. The longer in the past he wants to rewrite this "history", the harder it takes, and he can never say that you gave him coins that you did not. The likely payoff for this in regards to the amount of computing power it would take to compromise a vast system that satoshi envisioned as a stable, worldwide economy would arguably not be worth it. Seemingly against intuition, and in one of the most beautiful aspects of the bitcoin system, when dealing with the types of resources required to complete these attacks, it's likely more profitable to be honest than it is to be malicious. I think where your argument comes unstuck is in the assumption that difficulty will decrease if hash rate decrease. and as i understand it ...It doesn't
No, the difficulty would also adjust down. It's adjusted such that a block is generated roughly every 10 6 10 minutes, ad infinitum. (Woops! hehe) (Woops again! That's what I get for trusting other people, eh? ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) )
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NOTE: This account was compromised from 2017 to 2021. I'm in the process of deleting posts not made by me.
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ryepdx
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June 05, 2011, 01:39:46 AM |
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Maybe i've missed something and you can set me straight ...If so please feel free to explain it to me ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) You have. The way I understand it, the Bitcoin algorithm always seeks to have 10 6 blocks an hour solved. 1 If everyone were to stop mining tomorrow, the difficulty would eventually plummet. The exchange price is entirely determined by what people are willing to pay at a given moment and nothing else.
Right. But if the network becomes open to attack due to a drop in the network's hashing power, people will become less willing to pay for bitcoin. The security of the network is determined by hash. A decrease in mining is a decrease in hash which is a decrease in security. If hash declines the value of bitcoins will decline. The hash determined the value of the bitcoin, nothing else. The hash gives the bitcoin security.
Kinda. I don't actually think we're looking at a system where one drives the other. I think we're looking at a feedback loop. But this is irrelevant. Sweft, your concerns have been voiced by many a newbie before you and addressed many times before. It's a failing of this community that we don't have a sticky to address your concerns, choosing instead to react with hostility toward you. (Though your calling everyone an idiot probably didn't help your case much.) I think you are overlooking the fact that the base block reward will be diminishing gradually, not simply going from 50 to 0 in 2040. Hashing will still take place afterward as by then (as it has been said before) transaction fees will have become the norm for "must-take-place-ASAP" transactions. Because the base block reward is set to diminish gradually, there will be plenty of time for the mining ecosystem to begin adapting to the upcoming change. The coping mechanism may be built into the system in the form of transaction fees, or a new as-of-yet-unknown one may be built on top of it. After all, the bitcoin payment processors that are bound to crop up will have a vested interested in keeping transactions going and may institute fees of their own, much like banks have now, to compensate mining cost (if indeed it becomes unprofitable.) The bitcoin system is extremely robust, I think you'll find. Hopefully the cold reception you've received from this community of bitcoin veterans won't put you off them too much. Edit:1. My original claim of 10 blocks an hour was incorrect. According to the wiki: The network rules are such that the difficulty is adjusted to keep block production to approximately 1 block per 10 minutes. From https://en.bitcoin.it/wiki/Category:Mining
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Quantumplation
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June 05, 2011, 01:45:19 AM |
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Just thought of something else:
The kind of people who have the resources for massive bitcoin mining servers are likely to be large financial investment firms. It is very much in their interest to keep mining, as, essentially, their entire company can perform transactions on the bitcoin network without any fees, as long as it's solved by their own server. This would be HUGE savings for the firm, likely doing high volume microtrades on thousands of stocks, on top of the income from the fees themselves. So we've got an example of secondary or tertiary motivational factors.
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NOTE: This account was compromised from 2017 to 2021. I'm in the process of deleting posts not made by me.
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ByteCoin
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June 05, 2011, 01:45:51 AM |
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You have. The way I understand it, the Bitcoin algorithm always seeks to have 10 blocks an hour solved.
Only if you're working in base 6. ByteCoin
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ryepdx
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June 05, 2011, 01:46:54 AM |
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You have. The way I understand it, the Bitcoin algorithm always seeks to have 10 blocks an hour solved.
Only if you're working in base 6. Correction noted and made. Thanks. :-)
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marcus_of_augustus
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Eadem mutata resurgo
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June 05, 2011, 01:56:13 AM |
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However misguided, it raises some interesting thoughts about if/when bitcoin network is matured. If difficulty is stabilising at some rate this is likely because the exchange value has stabilised. If the exchange value has stabilised there is much more likely to be merchants and vendors willing to exchange, trade, do free commerce, rather than save. The result of this is more transactions on the network and thus more fees.
So here is yet another self-regulating mechanism tucked into the inner workings of bitcoin, this time as a mature network. More stability of exchange value leads to more commerce leads to more fees => more mining => more security. Also, a drop in exchange value leads to more commerce (people cashing out) and more fees. Net effect, it drives difficulty towards some temporarily stable value (stationary fixed point) on fees only mining basis.
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Vladimir
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June 05, 2011, 01:58:28 AM |
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Pure genus isn't it?
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Sweft (OP)
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June 05, 2011, 02:05:52 AM |
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This issue hadn't been addressed, please stop saying that. It's a lie.
If it had been addressed someone would have Provided a sufficient explanation in this thread. I have yet to see one.
Thus to me this issue is problematic for bit coin.
People assume wrongfully that inflation is bad. To respect to security, inflation is not only beneficial but necessary. Otherwise a declining hash will compromise the security of the network.
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markm
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June 05, 2011, 02:07:19 AM |
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Original Poster, your problem is trivially easy to solve.
Please just tell us first exactly how many fixed coins you wish to buy and at what price, since most people who mouth off like that fail to put their money where their mouth is.
If you are serious about buying coins that feature your "fix", they will be made available for you to buy. Its simple, just put your money where your mouth is.
Until you do, or someone does, why should someone even point you at the coins that have the feature you are mouthing off about, let alone build them from scratch just for you? Possibly a hidden cadre of people are already making fortunes with precisely such coins, but if you aren't serious about buying any there is no point wasting their time on you.
-MarkM-
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