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Author Topic: Question About Supply  (Read 917 times)
Anth0n
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August 31, 2011, 03:27:36 PM
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From what I understand, the supply of BTC increases at the same rate no matter how many people are mining. Isn't this unrealistic, since if it were like mining in real life, supply would increase less with fewer miners and more with more miners?
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August 31, 2011, 03:39:29 PM
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From what I understand, the supply of BTC increases at the same rate no matter how many people are mining. Isn't this unrealistic, since if it were like mining in real life, supply would increase less with fewer miners and more with more miners?

You might find Bitcoin unrealistic also because its not yellow and it can not be hold on your hand.
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August 31, 2011, 03:44:24 PM
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From what I understand, the supply of BTC increases at the same rate no matter how many people are mining. Isn't this unrealistic, since if it were like mining in real life, supply would increase less with fewer miners and more with more miners?

You might find Bitcoin unrealistic also because its not yellow and it can not be hold on your hand.

Heh... Hugo, tenle paciencia.

Yes, Anth0n, it's unrealistic if your goal is to come up with a clone of gold, or platinum, or diamonds. But that wasn't the goal with Bitcoin. Rather, it was to make both the total supply and the way in which we'll reach it both open and predictable. This has its advantages too.
Anth0n
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August 31, 2011, 04:04:52 PM
 #4

From what I understand, the supply of BTC increases at the same rate no matter how many people are mining. Isn't this unrealistic, since if it were like mining in real life, supply would increase less with fewer miners and more with more miners?

You might find Bitcoin unrealistic also because its not yellow and it can not be hold on your hand.

Heh... Hugo, tenle paciencia.

Yes, Anth0n, it's unrealistic if your goal is to come up with a clone of gold, or platinum, or diamonds. But that wasn't the goal with Bitcoin. Rather, it was to make both the total supply and the way in which we'll reach it both open and predictable. This has its advantages too.

I had always thought Bitcoin to theoretically be a perfect money since it would mimic the real life ideals of supply and demand, until I noticed this flaw. It discourages new miners from joining since their share will be less than if more coins were created when they joined.
Piper67
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August 31, 2011, 04:10:57 PM
 #5

From what I understand, the supply of BTC increases at the same rate no matter how many people are mining. Isn't this unrealistic, since if it were like mining in real life, supply would increase less with fewer miners and more with more miners?

You might find Bitcoin unrealistic also because its not yellow and it can not be hold on your hand.

Heh... Hugo, tenle paciencia.

Yes, Anth0n, it's unrealistic if your goal is to come up with a clone of gold, or platinum, or diamonds. But that wasn't the goal with Bitcoin. Rather, it was to make both the total supply and the way in which we'll reach it both open and predictable. This has its advantages too.

I had always thought Bitcoin to theoretically be a perfect money since it would mimic the real life ideals of supply and demand, until I noticed this flaw. It discourages new miners from joining since their share will be less than if more coins were created when they joined.

And yet, somehow, even with the low prices we have right now, miners are mining... lots of them. It's probably because the term "mining" is a bit misguided. Think of them as the "high priests and priestesses of the network".  Grin
Anth0n
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August 31, 2011, 04:35:57 PM
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Never said that it would discourage all mining. But there are probably not as many miners as there should be given how quickly the supply is increasing.
indio007
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August 31, 2011, 04:39:49 PM
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Mining is just what got adopted instead of "proof of work". It was never meant to be analogous to mining.
koin
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August 31, 2011, 10:12:00 PM
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It discourages new miners from joining

not a problem -- bitcoin only needs as many miners as are necessary to discourage any attempts to gain more than 50% of the mining network capacity.  and bitcoin is way beyond that level at present.


since their share will be less than if more coins were created when they joined.

huh?   a miner's share is dependent entirely on how many hashes are being performed today.  a new miner and an earlier miner, both with 1 ghash/s of capacity will earn about the exact same amount today.
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September 01, 2011, 03:09:55 AM
 #9

From what I understand, the supply of BTC increases at the same rate no matter how many people are mining. Isn't this unrealistic, since if it were like mining in real life, supply would increase less with fewer miners and more with more miners?

Mining is the least important part of mining.

Pretend that gold was the only money around, and that there was exactly one once of gold in the world, and that it had already been mined.  No one would be employed mining gold, but many people would be employed assaying tiny specs of it.

Bitcoin mining has a lot more to do with assaying than it does with mining.  We are verifying that no fake gold is coming to the market.

Just that in the bitcoin world, we only have access to a third of that ounce of gold, and there is a strange quirk of the assaying process that makes more gold show up whenever we successfully complete a test, and that the amount of new gold will gradually diminish at a fairly regular rate until the whole ounce is here.

Oh, and real gold can only be divided to a finite degree before it stops being divisible (or stops being gold!).  Currently we don't bother dividing bitcoins beyond a certain size because there is no point to values that small.  But there is no limit to how finely we can divide bitcoins if we ever need to.  A few more bits and we could assign a part to each and every atom in the solar system.  A few bits beyond that and we could give a part to every quark, electron and photon in the universe.

p2pcoin: a USB/CD/PXE p2pool miner - 1N8ZXx2cuMzqBYSK72X4DAy1UdDbZQNPLf - todo
I routinely ignore posters with paid advertising in their sigs.  You should too.
Anth0n
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September 01, 2011, 07:23:04 PM
 #10

Actually turns out there is no problem after all, since more coins are issued when more miners join, up until the difficulty increase. It works out economically!
Piper67
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September 01, 2011, 07:45:56 PM
 #11

Actually turns out there is no problem after all, since more coins are issued when more miners join, up until the difficulty increase. It works out economically!

No, the total number of coins issued remains the same. The difficulty adjusts to compensate, depending on the number of miners.
Anth0n
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September 01, 2011, 09:03:23 PM
 #12

Actually turns out there is no problem after all, since more coins are issued when more miners join, up until the difficulty increase. It works out economically!

No, the total number of coins issued remains the same. The difficulty adjusts to compensate, depending on the number of miners.

Yes, that's what I'm saying.

In terms of gold mining, suppose company A finds a gold mine and starts mining, obtaining gold at a certain rate. Company B joins in and finds gold at the same rate, up until all the easy gold is mined, then more advanced digging (GPU power) will be required to obtain gold at the same rate. Without increasing digging resources, they will still obtain gold, just not as much. Bitcoin simulates this quite nicely.
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