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Author Topic: The Future of the Bitcoin  (Read 5439 times)
telestrial
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February 24, 2011, 12:52:34 AM
 #1

Hello folks,

I've been watching this for a long time now, and I've just recently gotten involved...gotten my first .05...the whole nine yards.

It feels great.

But at the same time, I have a question that has been gnawing at me for sometime. I've been reading people's posts about this being a real future currency. I know it's a currency now, but it's not mainstream.  And it's certainly not something that is close to adoption on a large scale.  Here's the issue I see:

Difficulty to mint bitcoins is increasing. This is something that is SUPPOSE to happen, but doesn't this hurt the future of the bitcoin? Using computer power to create more means that those with computer power are the most powerful (not to be redundant).  This works now because it's a new commodity on the uprise..but what happens when the difficulty rises above what an average computer user can manage? In fact, hasn't it already?  To really be competitive in acquiring more of these things, I need to go out and spend a couple hundred dollars on a new video cards. I don't want to argue with anyone about how much the buy in is right now, because that's not really the point.  Difficulty will continue to increase, and what I see when I look ahead is a future where supercomputers mint new bitcoins. That's interesting, isn't it?  Now, I realize that by this point the market will be much more saturated with these things, but I'm trying to parallel this with the dollar.

In a Bitcoin future, will Intel be the next federal reserve?
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February 24, 2011, 01:05:34 AM
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There will be many such 'Intels' and anyone can potentially start one.  But even the biggest player won't be able to change the rules without everyone agreeing.

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kiba
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February 24, 2011, 01:06:48 AM
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Difficulty will continue to increase, and what I see when I look ahead is a future where supercomputers mint new bitcoins. That's interesting, isn't it?  Now, I realize that by this point the market will be much more saturated with these things, but I'm trying to parallel this with the dollar.

In a Bitcoin future, will Intel be the next federal reserve?

Those who are parasite on electrical source could be competitors. You might have whole zombie botnet that just mine bitcoin.

telestrial
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February 24, 2011, 01:14:51 AM
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There will be many such 'Intels' and anyone can potentially start one.  But even the biggest player won't be able to change the rules without everyone agreeing.

But when the difficulty really gets up there (this is all theoretical..this assumes bitcoins will take off and become something huge) will there really be many Intels? Won't there only be a handful of setups that can mint new coins?  Hell, right now, a supercomputer could mint a couple thousand of these things a day. This is a very perplexing to me as a potential investor.  Do I really want to place my worth into a currency that rewards processing superiority?

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Those who are parasite on electrical source could be competitors. You might have whole botnet that just mine bitcoin.


This opens up a whole different discussion about legality.  However, it's semi-pertinent.  This system rewards computer power. That is really troublesome.


....I realize I'm scrutinizing the whole idea...and if I don't like it..I shouldn't use it. Yeah yeah. I know. But are people considering this future? Is this what we want for the bitcoin?

Would any amount of randomizing the mint system help this problem?  Or what if everyone had the same odds? And then as the difficulty arose the time between a new mint would increase...
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February 24, 2011, 01:25:27 AM
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But when the difficulty really gets up there (this is all theoretical..this assumes bitcoins will take off and become something huge) will there really be many Intels? Won't there only be a handful of setups that can mint new coins?  Hell, right now, a supercomputer could mint a couple thousand of these things a day. This is a very perplexing to me as a potential investor.  Do I really want to place my worth into a currency that rewards processing superiority?

The whole point of processing is to secure the bitcoin network. Zombie botnet secure it. Intel supercomputers secure it.Bitcoin banks with an interest in bitcoin security will just throw some  mining hardware at the problem. Anybody who mines, secure it. 

Beside, you can never mint more than 21 million bitcoin. It's impossible by design.
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....I realize I'm scrutinizing the whole idea...and if I don't like it..I shouldn't use it. Yeah yeah. I know. But are people considering this future? Is this what we want for the bitcoin?

Would any amount of randomizing the mint system help this problem?  Or what if everyone had the same odds? And then as the difficulty arose the time between a new mint would increase...

We scrutinized this ourselves long time ago and come to a consensus that this is the most fair way we know to distribute bitcoin. Somebody must secure bitcoin in the first place, why not get rewarded for it?

telestrial
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February 24, 2011, 01:32:12 AM
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The whole point of processing is to secure the bitcoin network. Zombie botnet secure it. Intel supercomputers secure it.Bitcoin banks with an interest in bitcoin security will just throw some  mining hardware at the problem. Anybody who mines, secure it.

Would you mind expanding on this idea of "securing" it?  Why does this secure it?  Because it guarantees that there will always be more?
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February 24, 2011, 01:33:55 AM
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Would you mind expanding on this idea of "securing" it?  Why does this secure it?  Because it guarantees that there will always be more?

It makes counterfeiting incredibly difficult.

telestrial
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February 24, 2011, 01:38:53 AM
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No, it is because it guarantees that there will be no more.

So....I'm trying to make this make sense using real events.

Are we in a "gold rush" stage with Bitcoins? Where eventually the difficulty will get so high that the rate of new mints will be SUPER slow? So then..the "bitcoin veins" will dry up and people will have whatever they have and won't likely be able to mint new ones...? Then...people will have to do business to actually move them around?
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February 24, 2011, 01:44:21 AM
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Are we in a "gold rush" stage with Bitcoins? Where eventually the difficulty will get so high that the rate of new mints will be SUPER slow? So then..the "bitcoin veins" will dry up and people will have whatever they have and won't likely be able to mint new ones...? Then...people will have to do business to actually move them around?

No, the new mint will not be super slow. It will alway try to make sure that there are six new blocks per hour. After mining is over, bitcoin miners will then demand transaction fees to sustain its activity. Right now, it is free to make payment because for many miners, 50 BTC is sufficient.

Please read the https://en.bitcoin.it/wiki/FAQ because it seem that you are asking basic question about how bitcoin works.

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February 24, 2011, 01:49:05 AM
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Actually there will always be miners...

Except they will be mining an infinite amount of fractions off the last Bitcoin.
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February 24, 2011, 02:00:34 AM
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Actually there will always be miners...

Except they will be mining an infinite amount of fractions off the last Bitcoin.
Technically yes, but they will mine for transaction fees. And the transaction fees will be as high as is needed to motivate miners to get 1 block every ~10 minutes.

"Bitcoin had been transformed from an anarachistic challenge to the financial status quo, to the crypto spawn of Satan, fuelled by cut-throat greed and delusions of avarice." - MatTheCat
"these people don't seem to want to stop till Bitcoin is completely destroyed and left like an old cum rag in the corner of the room." - ShroomsKit
telestrial
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February 24, 2011, 02:13:41 AM
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Please read the https://en.bitcoin.it/wiki/FAQ because it seem that you are asking basic question about how bitcoin works.

Thank you for the suggestion. I've read this several times, however, and I was really just trying to find out where all this is headed. That's all.
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February 24, 2011, 02:23:12 AM
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It seems everyone always misses the point, that you're not supposed to mine bitcoins, that's a sideshow to the fact that it's a more convenient currency.
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February 24, 2011, 02:40:36 AM
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Ask yourself what happens to the price of gold if, the production of gold came to a halt?

Demand would be the same but supply would reducee. This means the price of gold would continue to increase as long as there is sufficient demand. It would get to the point where a gold wedding ring would be worth enough to buy a moderate family home.

This is what happens when bitcoin mining slows down or becomes too expensive or whatever.

If tomorrow no more bitcoins were being mined, the price of bitcoins would grow even quicker than it is now.

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telestrial
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February 24, 2011, 02:41:21 AM
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I don't agree that mining is a sideshow for Bitcoins right now.
kiba
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February 24, 2011, 02:41:56 AM
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I don't agree that mining is a sideshow for Bitcoins right now.

It is already a sideshow for me.

telestrial
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February 24, 2011, 03:04:22 AM
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Hey..there is no blame here at all. I'm just stating the obvious.  I'm actually trying to get in on the action myself.
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February 24, 2011, 03:45:40 AM
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I only wish I'd been mining for the last six months! I first started in August, generated a 100 BTC off my CPU in a week, and when I discovered that they were trading for virtually nothing, I stopped and forgot all about it. If I'd known about GPU mining, and that the value would increase so dramatically, you better bet I would have kept on mining! I'm excited to see what happens in the next six months.

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February 24, 2011, 04:14:40 AM
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I only wish I'd been mining for the last six months! I first started in August, generated a 100 BTC off my CPU in a week, and when I discovered that they were trading for virtually nothing, I stopped and forgot all about it. If I'd known about GPU mining, and that the value would increase so dramatically, you better bet I would have kept on mining! I'm excited to see what happens in the next six months.

The exact same thing happened to me, except it was 1000 btc that I had mined before I got bored.

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ribuck
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February 24, 2011, 08:56:48 AM
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Except they will be mining an infinite amount of fractions off the last Bitcoin.

Theoretically, perhaps, but it's implemented with 64-bit integers, so as soon as that last "1" drops of the right-hand bit, the mining reward will be exactly zero forevermore. This won't happen within my lifetime though.
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