Bitcoin Forum
December 11, 2017, 03:23:20 PM *
News: Latest stable version of Bitcoin Core: 0.15.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2] 3 »  All
  Print  
Author Topic: Is this the reason the bitcoin price is not exploding right now?  (Read 4262 times)
Nagle
Legendary
*
Offline Offline

Activity: 1204


View Profile WWW
September 16, 2014, 06:53:45 PM
 #21

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.
It is a common myth that Bitcoin is ruled by a majority of miners. This is not true. Bitcoin miners "vote" on the ordering of transactions, but that's all they do. They can't vote to change the network rules.
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1513005800
Hero Member
*
Offline Offline

Posts: 1513005800

View Profile Personal Message (Offline)

Ignore
1513005800
Reply with quote  #2

1513005800
Report to moderator
AMVM
Jr. Member
*
Offline Offline

Activity: 44


View Profile
September 16, 2014, 08:20:20 PM
 #22

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
Hero Member
*****
Offline Offline

Activity: 630



View Profile
September 16, 2014, 08:42:04 PM
 #23

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.

All is Mine!

1H7LUdfx9AFTMSXPsCBror3RDk57zgnc2R
tspacepilot
Legendary
*
Offline Offline

Activity: 1400


I may write code in exchange for bitcoins.


View Profile
September 16, 2014, 08:48:06 PM
 #24


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
Hero Member
*****
Offline Offline

Activity: 630



View Profile
September 16, 2014, 09:03:40 PM
 #25

Give a little more time.

It will soon explode.

All is Mine!

1H7LUdfx9AFTMSXPsCBror3RDk57zgnc2R
wasserman99
Sr. Member
****
Offline Offline

Activity: 476



View Profile
September 17, 2014, 01:06:49 AM
 #26


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
Legendary
*
Offline Offline

Activity: 1722



View Profile
September 17, 2014, 01:18:49 AM
 #27


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.

btc: 15sFnThw58hiGHYXyUAasgfauifTEB1ZF6
juju
Sr. Member
****
Offline Offline

Activity: 382



View Profile
September 17, 2014, 01:37:38 AM
 #28


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
Hero Member
*****
Offline Offline

Activity: 728


Time is on our side, yes it is!


View Profile
September 17, 2014, 01:56:05 AM
 #29

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
Legendary
*
Offline Offline

Activity: 1400


I may write code in exchange for bitcoins.


View Profile
September 17, 2014, 02:55:34 AM
 #30

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
Legendary
*
Offline Offline

Activity: 1204


View Profile WWW
September 17, 2014, 03:29:11 AM
 #31

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
Legendary
*
Offline Offline

Activity: 1064


HoneybadgerOfMoney.com Weed4bitcoin.com


View Profile WWW
September 17, 2014, 03:44:33 AM
 #32

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
Hero Member
*****
Offline Offline

Activity: 700



View Profile
September 17, 2014, 06:17:29 AM
 #33

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
Hero Member
*****
Offline Offline

Activity: 742

StakeMiners.com The Future of POS Mining


View Profile WWW
September 17, 2014, 08:12:04 AM
 #34

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
Sr. Member
****
Offline Offline

Activity: 336


View Profile
September 17, 2014, 08:19:18 AM
 #35

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
Full Member
***
Offline Offline

Activity: 199



View Profile
September 17, 2014, 09:12:17 AM
 #36


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.

Bitmessage: BM-2DAetLWJBKWHZoPbNCgg5z8jwaPpDYWwd4
gpg key id:C6EF5CE3
mcgeal
Jr. Member
*
Offline Offline

Activity: 52


View Profile
September 17, 2014, 09:19:32 AM
 #37

Hope bitcoin will rise sky high...  Cheesy

iamahappyminer
Member
**
Offline Offline

Activity: 79


View Profile
September 17, 2014, 09:32:27 AM
 #38

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.

FantomCoin - first merged mining CryptoNote based coin.
Bizzaran
Jr. Member
*
Offline Offline

Activity: 32


View Profile
September 17, 2014, 01:33:38 PM
 #39

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
Legendary
*
Offline Offline

Activity: 1609


View Profile
September 17, 2014, 07:53:01 PM
 #40

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.
Pages: « 1 [2] 3 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!