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Author Topic: Incentive for generating new blocks?  (Read 1656 times)
denaje
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August 18, 2010, 07:29:24 PM
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Currently, there is a clear incentive to spending CPU time to generate blocks.  For every block I generate, I get 50 BTC.  But when the 21mil BTC mark is reached and no more BTC are being generated, would it be correct to say that I would have no incentive to spend costly electricity to generate new blocks, since I don't get anything more out of it?  If that's the case, what if the majority of people stopped generating blocks? Wouldn't that destroy the underlying security of the Bitcoin system?

(Forgive me if I grossly misunderstand the nature of generating blocks.)
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jgarzik
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August 18, 2010, 07:33:38 PM
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Currently, there is a clear incentive to spending CPU time to generate blocks.  For every block I generate, I get 50 BTC.  But when the 21mil BTC mark is reached and no more BTC are being generated, would it be correct to say that I would have no incentive to spend costly electricity to generate new blocks, since I don't get anything more out of it?

You get transaction fees.


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August 18, 2010, 07:33:46 PM
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If you are still alive in 120+ years, you probably will not *personally" care to be generating blocks.  However, assuming bitcoin is still running then, anyone who has a large number of bitcoins is going to still have a personal incentive to keep the currency strong; even if the transaction fees are too small to compete over.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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August 18, 2010, 08:02:02 PM
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IF people with a stake in BTC generate to keep the system going THEN fees will be low enough not to be an incentive themselves. ELSE fees will rise until fees are an adequate incentive.

http://www.bitcoin.org/wiki/doku.php?id=transaction_fee

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MoonShadow
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August 18, 2010, 10:05:11 PM
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IF people with a stake in BTC generate to keep the system going THEN fees will be low enough not to be an incentive themselves. ELSE fees will rise until fees are an adequate incentive.

http://www.bitcoin.org/wiki/doku.php?id=transaction_fee

True, the supply of privately supplied computational power will rise to meet the demand or the computational power will decrease to meet the demand.  Either way, it'll balance out in the long term.  Unless we hit the 'singularity' before then, only my grandchildren will have to worry about such things.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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