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Author Topic: Guaranteed death of BTC?  (Read 939 times)
miken123
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November 22, 2013, 02:58:42 PM
 #1

I had an idea - personally I own some BTCs (small potatoes) and I'm cheering them on but I was thinking a lot about mining and rate of return, etc... and then this thought hit me!

Let's extrapolate to the far future... when all the BTCs have been mined.
Let's assume the price of energy has skyrocketed so that it's very very expensive (but it's not Armageddon or anything)
Let's assume there's a full fledged BTC economy and people use them to buy/sell stuff.

In order for all the tons and tons of BTC transactions to occur, there needs to be people on the blockchain processing them -- which requires electrical power... which is now very very expensive.

At this point the BTC transaction fees will probably have skyrocketed as well (or else no one would spend precious energy on processing those transactions). 

Isn't it conceivable that if energy costs are high enough such that processing transactions becomes VERY expensive... that it could end up becoming a huge negative liability to the BTC economy?
If energy was expensive enough (and thus trx fees) all of a sudden we'd need a currency that doesn't require lots of energy to process transactions of!  And it wouldn't be BTC!



The easy counter to this idea is that with time the processing efficiency of the devices used to process transactions also increases greatly-- to the point where it at least keeps pace with the opposing rise in energy costs.. thus keeping the fees on transactions the same as they are today.   

Just fun thinking out loud. What do you think??
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blacksails
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November 22, 2013, 03:05:10 PM
 #2

I think (and hope) that we have developed cheap renewable energy by then.
sk8bo
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November 22, 2013, 03:07:34 PM
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Doesn't this mean that every other transaction would increase its cost as much as the BTC would? Cheesy
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November 22, 2013, 03:07:56 PM
 #4

Just fun thinking out loud. What do you think??

I think probably what will happen is as the coin generation approaches the end, the surviving developers (let's remember that Satoshi has already bailed) will fork Bitcoin to tweak the transaction fees.

There will also certainly be other alt currencies in circulation at different levels of maturity. My feeling is that branding and language will play an integral role in this process as more and more coins are developed with the most treasured coins being those with the most treasured names.

References:
http://coinmarketcap.com/

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marcinpl87
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November 22, 2013, 03:15:43 PM
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From last 100 years energy cost is going lower because technologies (to produce electricity) are more eficient. I don't know why did you assume that energy cost will skyrocket (?).
blacksails
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November 22, 2013, 03:25:13 PM
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From last 100 years energy cost is going lower because technologies (to produce electricity) are more eficient. I don't know why did you assume that energy cost will skyrocket (?).
We will eventually run out of fossil fuels, so I guess that's how he/she thought!
Martijnvdc
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November 22, 2013, 03:31:33 PM
 #7

... Why would transaction costs go up?
The OP doesn't make any sense.
toy4lov3rs
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November 22, 2013, 03:34:46 PM
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Yes, doesnt make sence.

Energy cost is going lower and as the price per BTC rises transaction cost will be lower in BTC terms

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November 22, 2013, 03:39:04 PM
 #9

I see what your saying, but assuming there will be a market for transferring money then bitcoin will have a space to compete in. If that is true then bitcoin will endure since it is in a position to out-compete proprietary systems. 

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PenAndPaper
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November 22, 2013, 03:49:36 PM
 #10

Let's extrapolate to the far future... when all the BTCs have been mined.
Let's assume the price of energy has skyrocketed so that it's very very expensive (but it's not Armageddon or anything)
Let's assume there's a full fledged BTC economy and people use them to buy/sell stuff.

In order for all the tons and tons of BTC transactions to occur, there needs to be people on the blockchain processing them -- which requires electrical power... which is now very very expensive.

At this point the BTC transaction fees will probably have skyrocketed as well (or else no one would spend precious energy on processing those transactions).

If you do those assumptions you should naturally come to the conclusion that BTC price will be to the moon  Tongue
Transaction fees are going to be lower not higher.

niothor
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November 22, 2013, 04:23:08 PM
 #11

Number of transactions =/= cost of mining.
There is no correlation between those two.

So , your scenario need adjustments , something like erase it all and come up with a new one.

Robbert BTC
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November 22, 2013, 04:33:06 PM
 #12

BTC will not die as long as people use it on a big scale. Where people are, and money (e-currency) goes around, nothing will disappear. Because of it's deflating nature, prices are likely to keep on rising (very long term). It's because of the inflating nature of FIAT currencies that these currencies actually always die, yes, the dollar, euro, yen, you name it... Will eventually disappear, and hopefully BTC will be ruling the world Smiley The only thing that has been around that also has a deflating nature are precious metals and gems, and probably BTC will follow the same path. As long as people world wide recognize BTC as the best option we have, we will have a flourishing economy and no such economic drawdown as we had the last years (and in all of human history since FIAT currency was invented actually).

Want anything to read on the dying nature of FIAT currencies? : http://dailyreckoning.com/fiat-currency/
Gemminyc
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November 22, 2013, 04:44:01 PM
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BTC will not die as long as people use it on a big scale. Where people are, and money (e-currency) goes around, nothing will disappear. Because of it's deflating nature, prices are likely to keep on rising (very long term). It's because of the inflating nature of FIAT currencies that these currencies actually always die, yes, the dollar, euro, yen, you name it... Will eventually disappear, and hopefully BTC will be ruling the world Smiley The only thing that has been around that also has a deflating nature are precious metals and gems, and probably BTC will follow the same path. As long as people world wide recognize BTC as the best option we have, we will have a flourishing economy and no such economic drawdown as we had the last years (and in all of human history since FIAT currency was invented actually).

Want anything to read on the dying nature of FIAT currencies? : http://dailyreckoning.com/fiat-currency/


No, there are always enought zeroes you can add. And if not, money reform divide these numbers

Thus, never hold more fiat you need
miken123
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November 22, 2013, 06:09:09 PM
 #14

... Why would transaction costs go up?
The OP doesn't make any sense.

They go up because no one would process transactions at huge losses. Currently people do it for free because it's 'fun' and it's cheap (energy costs) but if it really hurt their pocket to process a transaction for the block chain then they'd stop (or charge more for it).
Stinky_Pete
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November 22, 2013, 06:09:31 PM
 #15

If electricity has become so very, very expensive then why would people be using a currency which depends on electricity? They might find using paper IOUs works so much cheaper.

Open4lies
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November 22, 2013, 06:14:25 PM
 #16

Electricity will be cheaper and cheaper, unless ecoterrorist dictate how we have to create the electricity  Tongue

alouette
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November 22, 2013, 07:44:39 PM
 #17

I don't know if energy will be cheaper, but I wonder how it will be possible to store all the future (and past) transactions, the bitcoin-qt client needing already to download 15 Gb of data for the transactions of 3 years. How it will be in 100 years?
Jochen
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November 22, 2013, 08:10:07 PM
 #18

I don't know if energy will be cheaper, but I wonder how it will be possible to store all the future (and past) transactions, the bitcoin-qt client needing already to download 15 Gb of data for the transactions of 3 years. How it will be in 100 years?

In the beginning we were happy with a hard disk of 256MB on our computer.. See how far we are yet. In the future this will not be a problem  Wink

http://www.ornl.gov/ornl/news/news-releases/2012/ornl-debuts-titan-supercomputer
odolvlobo
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November 22, 2013, 10:27:06 PM
 #19

No one correct answer! I am disappoint.
The mining difficulty automatically adjusts.

Transaction fees are not dependent on mining cost. Instead, the mining cost depends on the transaction fees. If the transaction fees are low or the cost of power is high, then inefficient miners will stop mining until the remaining miners can mine profitably.

In order to keep Bitcoin secure, the transaction fees have to be sufficient to attract enough miners to prevent a 51% attack.  Requiring people to compete for space in the block chain will keep transaction fees from dropping to 0. That is why the block size limit is so important.

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Mondy
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November 22, 2013, 11:01:17 PM
 #20

I think (and hope) that we have developed cheap renewable energy by then.

Hopefully, or that we dont need as many confirmations per transaction

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