nedbert9
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April 18, 2012, 02:10:37 PM |
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Someone who has 51% or anywhere close to it will be making a lot of money, I have a hard time believing that someone would go to all that trouble, money, and time just to attack and kill the chain. More likely they would hide the fact that they even have that much to keep confidence from dropping. Just look at the recent mystery miner, had 15-20% of the hashing power, but the only reason anyone even knew about it was because of the 1tx blocks he was producing.
15 to 20 percent? Nice, drive out at least 60% of the other miner's capacity and there's your 50%. I don't at all doubt that Mystery Miner is in a position to greatly increase its capacity if the mood suits, so the drop out rate could be even lower than 60% and the blockchain could be theirs. I keep seeing a claim that the Halving of the Bitcoin will cause it to double in value, but it's not clear to me why this would be. Any insights would be appreciated. If overall BTC supply is not heavily represented by miners then there's no reason to think that the BTC/USD rates will go up when the mining reward halves. On the other hand, if supply is impeded by profit miners creating walls. Miners would have to represent enough of the supply. I just don't see that.
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RyNinDaCleM
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Legen -wait for it- dary
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April 18, 2012, 02:12:15 PM |
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I don't think the price needs to necessarily double. If the average break-even price right now is around $3, the reward halving would kick it up to $6. So, as long as the price gets above, and stays above $6, it'll be similar to what we have been seeing since November.
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arepo
Sr. Member
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this statement is false
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April 18, 2012, 02:38:09 PM |
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It's impossible to know how the block reward drop will affect everything exactly but talking about "failing" is absolute FUD.
This talk of FUD is such bullshit. Explain why it won't happen asshat. Don't just call it FUD. That is just so weak! The price will rise...
Anyone who knows any economics realizes that there is no reason to expect more than a minuscule price increase (say 1-3% per annnum) from the drop in block reward. Adding a healthy serving of ass to your reply does not lend you credibility. (addressing the audience) You should take these kinds of bullshit arguments as a tacit admission of extreme weakness. it is FUD because you've given meager to no explanation in the OP about why you possibly think this specific horror scenario should play out. "explain why it WON'T happen, asshat" are words which come out of the mouth of someone trying to avoid the burden of proof. you made the claim, the onus is on you. BTC is trading at $5 a piece right now, so "BITCOIN WILL FAIL" claims are indeed positive claims, not the opposite. do you have any evidence at all to believe what you wrote in the OP?
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this sentence has fifteen words, seventy-four letters, four commas, one hyphen, and a period. 18N9md2G1oA89kdBuiyJFrtJShuL5iDWDz
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teflone
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April 18, 2012, 02:39:16 PM |
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It's impossible to know how the block reward drop will affect everything exactly but talking about "failing" is absolute FUD.
This talk of FUD is such bullshit. Explain why it won't happen asshat. Don't just call it FUD. That is just so weak! The price will rise...
Anyone who knows any economics realizes that there is no reason to expect more than a minuscule price increase (say 1-3% per annnum) from the drop in block reward. Adding a healthy serving of ass to your reply does not lend you credibility. (addressing the audience) You should take these kinds of bullshit arguments as a tacit admission of extreme weakness. it is FUD because you've given meager to no explanation in the OP about why you possibly think this specific horror scenario should play out. "explain why it WON'T happen, asshat" are words which come out of the mouth of someone trying to avoid the burden of proof. you made the claim, the onus is on you. BTC is trading at $5 a piece right now, so "BITCOIN WILL FAIL" claims are indeed positive claims, not the opposite. do you have any evidence at all to believe what you wrote in the OP? Careful, he'll call you an asshat....
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ribuck
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April 18, 2012, 02:40:41 PM |
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I keep seeing a claim that the Halving of the Bitcoin will cause it to double in value, but it's not clear to me why this would be. Any insights would be appreciated.
I think this claim originates from a simplistic analysis that assumes miners are selling all new coins immediately. On that basis, 7200 new coins are coming onto the market every day. If the price remains stable around $5, there must also be $36000 of new additional coming into the Bitcoin exchanges each day (equal to 7200 x $5). If the supply of new coins drops to 3600 per day, but the influx of new money stays at $36000 per day, the market price will rise to $10. Obviously there are many factors that are not considered in that naiive analysis, so it's not of much use.
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DeathAndTaxes
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Gerald Davis
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April 18, 2012, 02:48:57 PM |
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10TH/s isn't significantly harder to destroy than 5TH/s.
Yeah it is 2x but 2x isn't much of a multiple. For example lets say Chase Bank decided to destroy Bitcoin. Granted very implausible but lets say they decided. At ~$1M per TH/s to 51% the network at 10TH/s requires $10M and @ 5TH/s requires $5M. Now yes simplisticly $10M is larger than $5M but any entity willing AND able to devote $5M to the destruction of Bitcoin could just as easily devote $10M. If Chase bank could devote $5M to the destruction of Bitcoin they could just as easily devote $10M. If $5M is worth it then $10M is also likely worth it.
The reality is given the tiny economic value of the network even $1M probably isn't worth it.
Now $200M or $5B that is a different story. Those change the dynamics. $200M is harder to hide from shareholders and harder to justify as an expenditure. $5B puts Bitcoin out of the reach of most non-governmental entities.
In terms of "non-economic" (attacker isn't looking to directly profit from the double spends) 51% attack protection: 10TH/s ~= 5TH/s
Worst case scenario (for hashing power) is reward is cut in half and price doesn't rise at all. If hashrate falls by half the remaining miners will be just as profitable as now. That puts a floor at ~5TH/s which isn't materially different than 5TH/s. It would take a drop of something like 95% or a rise of something like 5000% to materially change the strength of the network.
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cunicula
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April 18, 2012, 02:51:21 PM |
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It's impossible to know how the block reward drop will affect everything exactly but talking about "failing" is absolute FUD.
This talk of FUD is such bullshit. Explain why it won't happen asshat. Don't just call it FUD. That is just so weak! The price will rise...
Anyone who knows any economics realizes that there is no reason to expect more than a minuscule price increase (say 1-3% per annnum) from the drop in block reward. Adding a healthy serving of ass to your reply does not lend you credibility. (addressing the audience) You should take these kinds of bullshit arguments as a tacit admission of extreme weakness. it is FUD because you've given meager to no explanation in the OP about why you possibly think this specific horror scenario should play out. "explain why it WON'T happen, asshat" are words which come out of the mouth of someone trying to avoid the burden of proof. you made the claim, the onus is on you. BTC is trading at $5 a piece right now, so "BITCOIN WILL FAIL" claims are indeed positive claims, not the opposite. do you have any evidence at all to believe what you wrote in the OP? Persistence of the status quo when a major change occurs should be assumed and does not need to be supported by argument. Nice, please continue. I've discovered that the best method of discrediting you comes from just getting you to respond. The revealed idiocy is so extreme that any thinking person necessarily perceives it. Arguing with you is not a good strategy. The audience here is not sufficiently intelligent to follow a logical argument. It is like speaking in a foreign language. Or like US politics. Logical arguments are simply ignored and have no impact (watch I'll try in the next post). It is easier and more effective to goad one's opponent into writing something blatantly foolish.
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bb113
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April 18, 2012, 02:55:37 PM |
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It's impossible to know how the block reward drop will affect everything exactly but talking about "failing" is absolute FUD.
This talk of FUD is such bullshit. Explain why it won't happen asshat. Don't just call it FUD. That is just so weak! The price will rise...
Anyone who knows any economics realizes that there is no reason to expect more than a minuscule price increase (say 1-3% per annnum) from the drop in block reward. Adding a healthy serving of ass to your reply does not lend you credibility. (addressing the audience) You should take these kinds of bullshit arguments as a tacit admission of extreme weakness. it is FUD because you've given meager to no explanation in the OP about why you possibly think this specific horror scenario should play out. "explain why it WON'T happen, asshat" are words which come out of the mouth of someone trying to avoid the burden of proof. you made the claim, the onus is on you. BTC is trading at $5 a piece right now, so "BITCOIN WILL FAIL" claims are indeed positive claims, not the opposite. do you have any evidence at all to believe what you wrote in the OP? Persistence of the status quo when a major change occurs should be assumed and does not need to be supported by argument. Nice, please continue. I've discovered that the best method of discrediting you comes from just getting you to respond. The revealed idiocy is so extreme that any thinking person necessarily perceives it. Arguing with you is not a good strategy. The audience here is not sufficiently intelligent to follow a logical argument. It is like speaking in a foreign language. Or like US politics. Logical arguments are simply ignored and have no impact (watch I'll try in the next post). It is easier and more effective to goad one's opponent into writing something blatantly foolish. Honestly why do you talk like this? What is the purpose of these posts I keep seeing where you just insult people and provide 0 useful or interesting info?
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DeathAndTaxes
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April 18, 2012, 02:58:41 PM |
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Arguing with you is not a good strategy. Good. Then you should stop. At the top of the page click "Logout".
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arepo
Sr. Member
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this statement is false
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April 18, 2012, 03:05:26 PM |
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Persistence of the status quo when a major change occurs should be assumed and does not need to be supported by argument. Nice, please continue. I've discovered that the best method of discrediting you comes from just getting you to respond. The revealed idiocy is so extreme that any thinking person necessarily perceives it.
Arguing with you is not a good strategy. The audience here is not sufficiently intelligent to follow a logical argument. It is like speaking in a foreign language. Or like US politics. Logical arguments are simply ignored and have no impact (watch I'll try in the next post). It is easier and more effective to goad one's opponent into writing something blatantly foolish.
this: Honestly why do you talk like this? What is the purpose of these posts I keep seeing where you just insult people and provide 0 useful or interesting info?
and this: Good. Then you should stop. At the top of the page click "Logout".
also, While "persistence of the status quo when a major change occurs should be assumed and does not need to be supported by argument," may not be true, that your specific scenario should play out is still a positive claim. Are you completely unfamiliar with the concept of burden of proof? Are you some kind of creationist or something?
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this sentence has fifteen words, seventy-four letters, four commas, one hyphen, and a period. 18N9md2G1oA89kdBuiyJFrtJShuL5iDWDz
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arepo
Sr. Member
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this statement is false
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April 18, 2012, 03:06:28 PM |
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also, we should all probably just put cunicula on ignore because all we're doing is bumping this FUDlicious thread.
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this sentence has fifteen words, seventy-four letters, four commas, one hyphen, and a period. 18N9md2G1oA89kdBuiyJFrtJShuL5iDWDz
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blablahblah
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April 18, 2012, 03:29:11 PM |
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Worst case scenario (for hashing power) is reward is cut in half and price doesn't rise at all. If hashrate falls by half the remaining miners will be just as profitable as now. That puts a floor at ~5TH/s which isn't materially different than 5TH/s. It would take a drop of something like 95% or a rise of something like 5000% to materially change the strength of the network.
The thing is, difficulty lags behind the hash rate (correct me if I'm wrong). So at the very least it will introduce a jolt where new coins suddenly more expensive to produce, without a corresponding decrease in difficulty. That "while" might be a few days, or it might be several months. If one has a look at historical difficulty charts, to me it looks like the difficulty is still oscillating from last year's bubble.
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disclaimer201
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April 18, 2012, 03:32:44 PM |
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Persistence of the status quo when a major change occurs should be assumed and does not need to be supported by argument. Nice, please continue. I've discovered that the best method of discrediting you comes from just getting you to respond. The revealed idiocy is so extreme that any thinking person necessarily perceives it.
Arguing with you is not a good strategy. The audience here is not sufficiently intelligent to follow a logical argument. It is like speaking in a foreign language. Or like US politics. Logical arguments are simply ignored and have no impact (watch I'll try in the next post). It is easier and more effective to goad one's opponent into writing something blatantly foolish.
this: Honestly why do you talk like this? What is the purpose of these posts I keep seeing where you just insult people and provide 0 useful or interesting info?
and this: Good. Then you should stop. At the top of the page click "Logout".
also, While "persistence of the status quo when a major change occurs should be assumed and does not need to be supported by argument," may not be true, that your specific scenario should play out is still a positive claim. Are you completely unfamiliar with the concept of burden of proof? Are you some kind of creationist or something? No, he is just an arrogant person who thinks he is so much smarter than anyone else on this forum. He believes he is an economic hot shot. But even if he was, this way of ridiculing other people's opinions shows he just gets the laughs in winding people up. It's all over the forum. He even wanted to be paid to answer questions. Too bad claiming you know it better won't just do it in forums. If you don't want to educate others without being paid for it you shouldn't be on such a forum. You should keep your precious knowledge and sell it to rich college kids only. Only they deserve to deal with you. Since you won't pay any respect to others, why should they listen to you? One more thing, do you think it's funny calling people names? Quite frankly, why isn't the moderator banning people who violate network etiquette so blatantly? Oh, yes yes - this post is a violation of your intelligence. I get it, blah.
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DeathAndTaxes
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Gerald Davis
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April 18, 2012, 03:39:02 PM |
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The thing is, difficulty lags behind the hash rate (correct me if I'm wrong). So at the very least it will introduce a jolt where new coins suddenly more expensive to produce, without a corresponding decrease in difficulty. That "while" might be a few days, or it might be several months. If one has a look at historical difficulty charts, to me it looks like the difficulty is still oscillating from last year's bubble.
I am not saying difficulty (hashing power) and price won't oscillate. They certainly will. I also think volatility (both in terms of hashing power and price) are likely to increase as we move through this "event". I am just saying even a change from 10TH/s to 5TH/s doesn't materially change the strength of Bitcoin.
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ldrgn
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April 18, 2012, 03:51:01 PM |
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a change from 10TH/s to 5TH/s
DAT, I know you're more than a little bit familiar with the economics of mining. What do you think the distribution of miners and their profits are like? What I'm getting at is do you think that half of the miners are currently mining below 50% of the current miner marginal revenue (giving a 50% profit) or somewhere else? Where do you think the average mining profit sits w/r/t mining revenue? FWIW I saw people in the mining subforum attributing the current decrease in hashrate to slowing down/shutting off miners for the higher summer electricity cost. If someone could get a good guess at the average electricity rate change from winter -> summer it could be used to get a very rough estimate of the elasticity of miners.
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casascius
Mike Caldwell
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The Casascius 1oz 10BTC Silver Round (w/ Gold B)
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April 18, 2012, 03:55:30 PM |
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I anticipate that we'll get a pile of press around the block halving time, and that it will be good press.
It will remind the world that Bitcoin has been around for FOUR years, and that the supply is about to be permanently cut in half.
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Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.
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blablahblah
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April 18, 2012, 03:56:24 PM |
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He even wanted to be paid to answer questions. Too bad claiming you know it better won't just do it in forums. If you don't want to educate others without being paid for it you shouldn't be on such a forum.
I would gladly pay for some of his sage wisdom. Unfortunately, I'm kinda broke at the moment -- all my funds are tied up in a business venture, and in order to access them, he would need to send me a donation of sorts (see address below ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) ) to cover the administrative costs of unwinding part of that venture prematurely. The thing is, difficulty lags behind the hash rate (correct me if I'm wrong). So at the very least it will introduce a jolt where new coins suddenly more expensive to produce, without a corresponding decrease in difficulty. That "while" might be a few days, or it might be several months. If one has a look at historical difficulty charts, to me it looks like the difficulty is still oscillating from last year's bubble.
I am not saying difficulty (hashing power) and price won't oscillate. They certainly will. I also think volatility (both in terms of hashing power and price) are likely to increase as we move through this "event". I am just saying even a change from 10TH/s to 5TH/s doesn't materially change the strength of Bitcoin. Fair enough. When it comes to leading vs lagging indicators, do you see any overt mechanism/cause for increased volatility leading up to the changeover? The only obvious thing I can see is the psychological uncertainty!
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silverbox
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April 18, 2012, 04:02:55 PM |
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I don't think there's any question that if the price does not double immediately after the reward drop, lots of miners are going to drop out. Whether somebody maliciously takes advantage of that, there's no way to know. With only more efficient miners left over, assuming the price doesn't jump up enough, then I suspect the price will continue downward as the more efficient miners can tolerate lower prices and remain profitable.
I think there's a good chance this scenario happens as people will probably price an increase in well before the reward change in anticipation of a possible price increase, thus there won't be a subsequent and sufficient price increase after the change.
Why should people feel the need to pay twice as much just because miners aren't earning as much? Halving the block reward doesn't make bitcoin twice as valuable, and nobody owes you free money for mining. Block reward halves, miners mining at a loss stop mining, difficulty drops. Simple. Ditto
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blablahblah
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April 18, 2012, 04:16:42 PM |
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I don't think there's any question that if the price does not double immediately after the reward drop, lots of miners are going to drop out. Whether somebody maliciously takes advantage of that, there's no way to know. With only more efficient miners left over, assuming the price doesn't jump up enough, then I suspect the price will continue downward as the more efficient miners can tolerate lower prices and remain profitable.
I think there's a good chance this scenario happens as people will probably price an increase in well before the reward change in anticipation of a possible price increase, thus there won't be a subsequent and sufficient price increase after the change.
Why should people feel the need to pay twice as much just because miners aren't earning as much? Halving the block reward doesn't make bitcoin twice as valuable, and nobody owes you free money for mining. Block reward halves, miners mining at a loss stop mining, difficulty drops. Simple. Ditto And they restart mining the next week when they realise the difficulty has dropped enough to make it profitable again? There are a few "what is the meaning of Value? 101" threads around the place. Cutting a very long story short: Bitcoin value for miners ~= Cost + small personal reward. Bitcoin value for everyone else ~= 1001 conveniences + psychological factors. In other words, price is very elastic. So if miners cut the supply, the users will go all ape-shit and pay more ![Wink](https://bitcointalk.org/Smileys/default/wink.gif)
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Dutch Merganser
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April 18, 2012, 04:22:25 PM |
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It's impossible to know how the block reward drop will affect everything exactly but talking about "failing" is absolute FUD.
This talk of FUD is such bullshit. Explain why it won't happen asshat. Don't just call it FUD. That is just so weak! The price will rise...
Anyone who knows any economics realizes that there is no reason to expect more than a minuscule price increase (say 1-3% per annnum) from the drop in block reward. Adding a healthy serving of ass to your reply does not lend you credibility. (addressing the audience) You should take these kinds of bullshit arguments as a tacit admission of extreme weakness. Fear based thinking is characteristic of much of what I see pass for discourse on this forum. That's one reason why FUD is such an appealing concept to scared little sheep. Seriously kiddies, your life is as likely to be a fucked up disappointment that you will regret every day as it is to be anything else, and no matter that, you are likely to die painfully in complete hopelessness and slide down that long gray tunnel into forever darkness without ever knowing why. Oh, and you can't take it with you, even if it is a deflationary currency ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) So buck up, you sound like a bunch of little girls. Coach Satani signing out ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif)
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"Science flies you to the Moon, religion flies you into buildings." - Victor Stenger
"Religion is regarded by the common people as true, by the wise as false, and the rulers as useful." - Seneca the Elder (ca. 54 BCE - ca. 39 CE) Roman rhetorician
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