.

[Nagle]

https://www.youtube.com/watch?v=_-TLA3j-ic4

No.

The amount of money being spent on mining will be roughly equal to the selling price of new Bitcoins produced. The Bitcoin price drives the level of mining activity, not the other way round. Difficulty has little impact on Bitcoin price. In the last six months, Bitcoin difficulty has gone to the moon as huge mining farms have been built. Bitcoin price has gone nowhere.

[AMVM]

Well lemme quote some smart comrade from this Forum on this subject:

And the current proof-of-work system isn't a tragedy of the commons, it's actually the reverse of same.  I was thinking along these lines early on, and made some of those same very arguments about a year ago, but I accept my error now.  A tragedy of the commons requires that a common resource be consumed by self interested players, but what is really happening is that a common resource (the security of the blockchain) is actually being aggregated.  I've made many counter arguments to my prior position on this since then, particularly centered around the incentive for major future entities in competition investing in exclusive mining agreements.  Think Wal-Mart & McDonalds agreeing to partner on a mining center that makes every effort to exclude the transactions intended for the Target & Burger King alliance.  I.E., companies in different industries have an incentive to work together, but exclude their competitors, as far as that is realistic in order to avoid transaction fees & processing delays.  This adversarial situation benefits the bitcoin consumers collectively, regardless of how each set of mining alliances should treat each other.

Brick & Morter banks would have similar reciprocal processing agreements; in order to get the other bank to process their customers' transactions without a fee & relatively fast, they would have to do the same for their customers.  Such an agreement would benefit both banking institutions, regardless of their relative size.  For example, MEGABitCoinBAnk in NYC has 100,000 customers and a 1000 GPU data center, while LittleFarmersBitcoinTrust near Cincinnati only has 10,000 customers and a 50 gpu data center.  Both banking institutions stand to benefit to some degree, so long as they are not competing in the same local markets, so the agreement happens.  MEGABitCoinBAnk is likely to make dozens of such agreements, leveraging the gpus of those dozens of local banks, even if some of them do compete with each other in the same market.

[tzortz]

PoW mining is the problem, See this thread too:
https://bitcointalk.org/index.php?topic=770591.0

PoW is one of Bitcoin's greatest strengths.

I agree, pow is a great strength.

[tspacepilot]

PoW mining is the problem, See this thread too:
https://bitcointalk.org/index.php?topic=770591.0

PoW is one of Bitcoin's greatest strengths.

did you invest in asics bro?

No.

Hm... why do you think PoW is one of bitcoins greatest strengths? It feels stupid to pay miners 1.6 M bucks per day for burning electricity. It was a great invention back in 2009 but now  we can all see its a flaw that might kill bitcoin. Especially when the difficulty is high enough so only big players will be able to profit from mining thus recentralizing the network to a few mining data centers

But wait a minute.  We're not paying them to "burn electricty" we're paying them to find the next block and reify a set of transactions.  There's a very real need for this.  How else do you resolve disputes about who sent what to whom?

[tzortz]

Give a little more time.

It will soon explode.

[wasserman99]

PoW mining is the problem, See this thread too:
https://bitcointalk.org/index.php?topic=770591.0

PoW is one of Bitcoin's greatest strengths.

did you invest in asics bro?

No.

Hm... why do you think PoW is one of bitcoins greatest strengths? It feels stupid to pay miners 1.6 M bucks per day for burning electricity. It was a great invention back in 2009 but now  we can all see its a flaw that might kill bitcoin. Especially when the difficulty is high enough so only big players will be able to profit from mining thus recentralizing the network to a few mining data centers

The miners are not "burning" electricity. They are using the electricity to perform mathematical calculations that prevent people from spending the same money twice. This is not unlike how banks power their computer systems to keep track of account holders' balances

[kokojie]

PoW mining is the problem, See this thread too:
https://bitcointalk.org/index.php?topic=770591.0

PoW is one of Bitcoin's greatest strengths.

did you invest in asics bro?

No.

Hm... why do you think PoW is one of bitcoins greatest strengths? It feels stupid to pay miners 1.6 M bucks per day for burning electricity. It was a great invention back in 2009 but now  we can all see its a flaw that might kill bitcoin. Especially when the difficulty is high enough so only big players will be able to profit from mining thus recentralizing the network to a few mining data centers

The miners are not "burning" electricity. They are using the electricity to perform mathematical calculations that prevent people from spending the same money twice. This is not unlike how banks power their computer systems to keep track of account holders' balances

Except Bitcoin already spends more on electricity, than VISA. But processes 0.001% of the amount of transactions VISA does.

[juju]

https://www.youtube.com/watch?v=_-TLA3j-ic4

I read through the white paper quickly and have a few issues with the way it works, how do you determine that all 100 delegates are unique, your assuming that their is never a bad actor or collusion, this would have the same issue as Bitcoin if it had a higher marketcap more centralization of the 100 delegates. I think the white-paper needs more scenarios of attackers trying to compromise the system. Since you only need 51% vote you only need 51 delegates to agree on something? What if each delegate actually controls 2 delegates, then 26 people need to agree on something?

While I agree with the issue of centralization in regards to ASIC's, it does make mining Bitcoin something not most can do. I think Satoshi truly intended for 1 CPU = 1 Vote or maybe he predicted this.

If you think about traditional metal mining operations that's similar too how they run anyway, its largely inaccessible to produce large amounts of precious metal unless you have a huge amount of money to invest on equipment, land etc.

[counter]

No, there is just too many variable to be considered when trying to predict or speculate on the price of Bitcoin.  The more you learn the more you realize that Bitcoin is unpredictable .

[tspacepilot]

Except Bitcoin already spends more on electricity, than VISA. But processes 0.001% of the amount of transactions VISA does.

Bitcoin isn't just the transaction network, it's also the asset being transacted. Your comparison is invalid.

Can VISA block transactions at their whim? Your comparison is invalid.

Agree, the comparison isn't valid.  It's a lot like saying comparing a candle to a steam engine and saying, "look the candle uses way less energy".  It totally obfuscates the fact that the candle isn't anywhere near as powerful or robust or even in the same class of object.  The candle is fine for what it does, the steam engine is fine for what it does.  But comparing them on energy use is crazy.  It misses the fact that the steam engine can power a locotomotive train whereas the candle can power ..., well the candle can't really power anything but it can light up your room.

[Nagle]

The miners are not "burning" electricity. They are using the electricity to perform mathematical calculations that prevent people from spending the same money twice. This is not unlike how banks power their computer systems to keep track of account holders' balances

Each full Bitcoin node keeps track of enough data to detect spending the same money twice. At the current transaction volume, that's a background job on a PC. That's all the compute power needed for accounting. All those racks of ASIC machines are doing no accounting whatsoever. Attached to an ASIC farm is some modest PC doing the block chain work.

[frankenmint]

Except Bitcoin already spends more on electricity, than VISA. But processes 0.001% of the amount of transactions VISA does.

Bitcoin isn't just the transaction network, it's also the asset being transacted. Your comparison is invalid.

Can VISA block transactions at their whim? Your comparison is invalid.

Agree, the comparison isn't valid.  It's a lot like saying comparing a candle to a steam engine and saying, "look the candle uses way less energy".  It totally obfuscates the fact that the candle isn't anywhere near as powerful or robust or even in the same class of object.  The candle is fine for what it does, the steam engine is fine for what it does.  But comparing them on energy use is crazy.  It misses the fact that the steam engine can power a locotomotive train whereas the candle can power ..., well the candle can't really power anything but it can light up your room.

Its not, but man that was a funny comeback. 

I concur with most here:  NOPE the video was a DPOS commercial (links in the description gave it away), if you want to read my full thoughts on this then goto youtube.

[cdog]

Especially when the difficulty is high enough so only big players will be able to profit from mining thus recentralizing the network to a few mining data centers

What advantages does a data center have compared an individual wanting to mine with one (or a few) machines?

What disadvantages does a data center have compared an individual wanting to mine with one (or a few) machines?

How does the amount of machines you have change your profit margins (which is what you seem to be suggesting)?

Hm... why do you think PoW is one of bitcoins greatest strengths?

It is the reason Bitcoin can exist and function. The alternatives have not proven to be superior, regardless of how strong one's opinion on the matter may be.

I guess you dont know that much about mining. Due to economies of scale, mining is no longer viable for individuals. Its the same reason you buy milk at the supermarket and not a milkman who delivers it fresh to your door everyday. Basically, the only companies making a profit in mining at this point are the hardware manufacturers themselves. Theres no fruit left on the tree that individuals can reach.

Personally, I dont have a problem with it as it all makes the network more secure.

[cyberpinoy]

There is 2 reasons Bitcoin price is not exploding. Problem one, there is no real demand for the coin. there is no one going out to specifically buy bitcoin because they "NEED" or "WANT" them. There is no product that can be purchased with only bitcoins, there are no products that have discounts if you buy them with bitcoins. There is no security structure put in place to secure the demand for the bitcoin.

Without a true demand for bitcoin and no real attempt by the developers to create anything more than a tradable market value for the coin, places like Amazon, Dell and other retailers/manufactures are dumping coins every 2 weeks, thus killing the value for the coin.

As soon as the developers realize people dont care about developer view of faster transaction and people dont care about anonymity the faster they will realize they need more for their coins future.

How to define demand in idiot terms

 Imagine yourself just a regular person, what reason do you have to exchange your cash for BTC just to buy a computer from dell.If both are offered as a payment method, what real reason is there to trade your CASH for BTC just to buy a computer from dell or anything off of Amazon. There is no reason, the cost is not less, it does not take less time. It actually takes an extra set of steps to get BTC. Now what happens if you have both payment methods, but buying with BTC is 10% or more less than buying with cash, or what happens when there is a product that can only be purchased by BTC. what reason do you have now to exchange your cash for BTC? And then ask tyoursef what happens when people have to buy BTC with cash, what does that do to the value of BTC??

Now do you understand the definition of demand and how it helps BTC?

[devphp]

I guess you dont know that much about mining. Due to economies of scale, mining is no longer viable for individuals. Its the same reason you buy milk at the supermarket and not a milkman who delivers it fresh to your door everyday. Basically, the only companies making a profit in mining at this point are the hardware manufacturers themselves. Theres no fruit left on the tree that individuals can reach.

Personally, I dont have a problem with it as it all makes the network more secure.

I don't see how it makes the network more secure. The hashrate figure is not the only parameter of measuring security of the network. The number of participants in that hashrate is no less significant. Security of Bitcoin network is better in one aspect but worse in another, which balances it to about the same it was a couple of years ago when people used GPUs to mine.

[testconpastas2]

Except Bitcoin already spends more on electricity, than VISA. But processes 0.001% of the amount of transactions VISA does.

Yes, please, compare the VISA's carbon footprint ( all workers + all offices + all "tools") with miners one.

Lies and FUD everywhere. My btcs are securer with PoW , and if you had any, you'd think so too.

[mcgeal]

Hope bitcoin will rise sky high... 

[iamahappyminer]

OK, FUD patrol checking in.

"Control four chip manufacturers then you could control 90% of [ASIC chip] production". 90% of ADDITIONAL production, maybe. You still would need to produce > 50% of all hashing capacity that already exists. And you need to hope no other chip designs/manufacturers emerge (since SHA2 hashing isn't a terribly difficult task, that requires a leap of faith. Good luck blowing your $400 million on that gamble.

"By controlling two mining pools you could get more than 50% of the network" Mining pools with 50% can censor transaction but they cannot double spend unless they first take that mining capacity offline (to mine a private fork of the blockchain). Do a Google search for

"Downplaying statistically possible double-spending risks" (http://www.ofnumbers.com/2014/08/18/downplaying-statistically-possible-double-spending-risks/) for more on why pools with > 50% are not the same as having your own equipment that exceeds 50% .

"Control one dozen or two dozen mining centers you could get 50%" Again ... that's a $200 million (or more) investment. If the intention is to have just censorship power then maybe that's feasible. Otherwise what is needed for this hashing capacity to be used to double spend is to take it offline and begin mining a private fork. Just like with pools, taking this action would be something noticeable before the damage is done (six confirmations on a much slower fork have passed) seriously lessening the chances of a double spending attack using this method causing serious harm to the big players (who presumable are monitoring the rate of block solving or have hotwallets or other withdrawal limits that woudl protect from such an attack).

Cool story though.

[Bizzaran]

He said Satoshi solved the Byzantine General's problem - he didn't. We don't believe it is unsolvable, we know it is. It's been mathematically proven. Satoshi made a mechanism that made it reliable if no one got > 50% of the deciding nodes, based on probability. But the Byzantine Generals' problem has always been based on probability, so this isn't a "mathematical" solution, just possibly a "practical" one. He then goes on to say "solving the centralization problem should be a cake-walk compared to that." Why? I would say that was the hard problem all along. If you can guarantee decentralization, "solving" the generals' problem is the easy part.

[mmortal03]

This PoW algorithm is not only for security, but also for distribution and adoption. While the time scale may be non-optimum, I believe the logic is sound. I don't think Satoshi anticipated it would catch on so quickly. The reward rate halves, but the time between halvings maybe should have halved as well.

On the contrary, if it had actually caught on more quickly, we wouldn't be having this problem. Obviously, the demand for it actually hasn't met the rate that it is being mined, or the price would still be going up.  Your solution, though, doesn't seem to be off.