Questions (and concerns) about BTC

[Milotyc]

Dear BTC community,

I've recently introduced myself to the world of BTC.  There are still some subjects I would love to be teached about.

1. The 21 million cap. Assuming there will always be people that are mining, this cap will be reached.
Bitcoin will become a currency that can't suffer from inflation. Spending them is a "loss". 

1. Is there any possibility of this 21M cap being raised to keep it rolling?

2. Like everything there exists, the of it worth is determined by its demand. Bitcoin provides anonymity, security, and a growing usage.

2. Wouldn't bitcoin be rendered useless if there were to rise another cryptocurrency that exceeds bitcoin in these qualities?

3. How will bitcoin traffic be encrypted / decrypted without miners?

Tysm!

[anti-scam]

1. Bitcoin's lack of inflation is considered a good thing by many. One bitcoin is divisible up to eight decimal places so there's no risk of running out of units. The 21 million cap cannot be raised other than by an exceptionally strong consensus that is unlikely to ever exist.

2. This could happen, but the smartest people in cryptocurrency are currently working exclusively on Bitcoin. Bitcoin is likely to have most features first and can copy those that it doesn't. The Bitcoin community also has the most money to throw around to keep itself going.

3. Bitcoin traffic is not encrypted, but it won't work without miners. When the 21 million cap is reached, they will be compensated with transaction fees instead of new currency.

[corebob]

1. What I wonder is if rising the cap would render all existing coins(hashes) invalid, and effectively starting everything from scratch?

2.b I believe bitcoin is designed to take advantage of new crypto. You would typically have to create a new wallet using the new crypto and transfer coins over from the old one.

[Rannasha]

1. What I wonder is if rising the cap would render all existing coins(hashes) invalid, and effectively starting everything from scratch?

Not necessarily. If all miners and users would upgrade to a software version that awards 1000 BTC per block starting from a certain block-number in the near future, that would work perfectly. Of course, any users not upgrading to this software would be using a different fork of the blockchain, starting at the point where the block reward would increase.

So changing fundamental properties such as the block reward is perfectly doable from a software point of view. The problem is getting the users to adopt this new version and not crashing trust in BTC at the same time.

[jellies]

Can someone describe what happens in the last year? 2039 to 2040?

clearly the difficulty will be through the roof because miners will have unimaginably fast hardware, but at the same time, as BTC appear so rarely, either each BTC must be worth millions of dollars OR the fast hardware is uber cheap and uses almost no electricity, OR the transaction fees will already be the primary income for miners.

Is the state of affairs prior to the last block for the miners much different to the state of affairs after the last block is mined?

in other words is there a imperceptible transition? By the "end" have transaction fees long ago supplanted whatever tiny chances of the last few BTCs?
is that the case regardless of the value of one BTC (10 bucks or 10 million bucks)?

[Lauda]

Can someone describe what happens in the last year? 2039 to 2040?

clearly the difficulty will be through the roof because miners will have unimaginably fast hardware, but at the same time, as BTC appear so rarely, either each BTC must be worth millions of dollars OR the fast hardware is uber cheap and uses almost no electricity, OR the transaction fees will already be the primary income for miners.

Is the state of affairs prior to the last block for the miners much different to the state of affairs after the last block is mined?

in other words is there a imperceptible transition? By the "end" have transaction fees long ago supplanted whatever tiny chances of the last few BTCs?
is that the case regardless of the value of one BTC (10 bucks or 10 million bucks)?

The last year is ~2140, you won't live to see that day, don't worry about it.

[pand70]

The last year is ~2140, you won't live to see that day, don't worry about it.

Actually the year will be much sooner with the rapid increase in mining power. Also 99% of the coins will be mined much sooner than 2030.

[jellies]

well what the system does in the last 60 years is pretty close to what it does in the last year, because the production asymptotically approaches zero.

In 2032, which I hope to be around to see, we're already 99% done with production and BTC per block is pretty close to current earned transaction fees per block. So I guess the dynamic in 2030 isn't much different than the subsequent 100 years.

[pand70]

In 2032, which I hope to be around to see, we're already 99% done with production and BTC per block is pretty close to current earned transaction fees per block. So I guess the dynamic in 2030 isn't much different than the subsequent 100 years.

In bitcoin there arent any fixed years. These are approximations based on the assumption that difficulty changes every 2 weeks. In reality difficulty changes faster so those dates will move back by a lot. 2032 = a lot sooner than 2030.

[Milotyc]

The last year is ~2140, you won't live to see that day, don't worry about it.

Actually the year will be much sooner with the rapid increase in mining power. Also 99% of the coins will be mined much sooner than 2030.

Like a function with an asymptote of y = 21 000 000?

[Mondy]

Itll be interesting to see where btc is at in 50 years!

[Lauda]

Itll be interesting to see where btc is at in 50 years!

If we live to see that day.

[pand70]

The last year is ~2140, you won't live to see that day, don't worry about it.

Actually the year will be much sooner with the rapid increase in mining power. Also 99% of the coins will be mined much sooner than 2030.

Like a function with an asymptote of y = 21 000 000?

Yeah but its not an asymptote. It takes the value eventually. Check this out https://en.bitcoin.it/wiki/Controlled_supply

[datafish]

2. Wouldn't bitcoin be rendered useless if there were to rise another cryptocurrency that exceeds bitcoin in these qualities?

I've given a lot of thought to this lately.  However, the greater Bitcoin's market cap becomes, the less likely this is to happen.  Already, there's the equivalent of over 10 billion USD stored in the blockchain.  These folks aren't going to sit on their hands and watch their wealth get wiped out.  The best programmers and mathematicians will be hired, if necessary, to make sure Bitcoin remains the top cryptocurrency.  There's nothing preventing improvements in the protocol, as long as a majority of hashing power agrees with those improvements.  I think Bitcoin is pretty much unstoppable at this point.

[jellies]

 These folks aren't going to sit on their hands and watch their wealth get wiped out.

No, the best (and very small number by head count) of them will execute a switch to cash or an alternative so quickly that by the time everyone else sees what is going on it will be too late.

speculative hot money has zero respect for bitcoin or even the wider concept of a crypto currency, their mantra is after all never get attached to a stock and for the purposes of riding a curve, bitcoin is a stock. They're happy while it is paying them and will pay lip service (Winklevoss etc) but when they sense the capital appreciation has finished they're gone & without a thought. It isn't even comparable to the change of a stock from growth to income: a stable btc price in USD terms is dead money to speculators, they need a ROI. As a long term store? nope, it is no hedge against huge financial collapse either, mtgox and every other btc to currency converter would fold in a nanosecond if the capital markets imploded.

[Milotyc]

Tyvm for all the help and info, will write a proper reply tomorrow.

[nimda]

The last year is ~2140, you won't live to see that day, don't worry about it.

Actually the year will be much sooner with the rapid increase in mining power. Also 99% of the coins will be mined much sooner than 2030.

Like a function with an asymptote of y = 21 000 000?

Close. However Bitcoins are not infinitely divisible, so eventually the reward will halve from 0.00000001 to 0.000000005, which will be rounded down to 0. Thus it's not an asymptotic function because after the final halving, the function can be described with a constant (f(x)=c).