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Author Topic: [2014-12-26] Reuters: Bitcoin’s defects will hasten its demise in 2015  (Read 707 times)
panju1
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December 27, 2014, 07:55:29 AM
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Bitcoin’s defects will hasten its demise in 2015

http://blogs.reuters.com/breakingviews/2014/12/26/bitcoins-defects-will-hasten-its-demise-in-2015/

Bitcoin’s defects will hasten its demise in 2015. The leading crypto-currency’s economies of scale in mining and its transaction system’s vulnerability to subversion by a dominant miner make it unsound. As seignorage declines it will become cost-uncompetitive for transactions. These flaws will cause its price to lose further altitude.

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Let's talk governance, lipstick, and pigs.


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December 27, 2014, 08:07:55 AM
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2011 called. They want their headline back.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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December 27, 2014, 08:10:01 AM
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Heard this before... will hear it again... it won't come true again... moving on...

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December 27, 2014, 08:42:37 AM
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sound like the topic of the threat of  51% attack! It is resolved by the big miners's self adjust. when their hash power exceeds a certain level, they will voluntarily shift some hash power to other small pool!
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As seignorage declines it will become cost-uncompetitive for transactions.
I don't think the transaction fee will be increased to become cost-uncompetitive when seignorage declines!

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December 27, 2014, 08:49:32 AM
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sound like the topic of the threat of  51% attack! It is resolved by the big miners's self adjust. when their hash power exceeds a certain level, they will voluntarily shift some hash power to other small pool!
Quote
As seignorage declines it will become cost-uncompetitive for transactions.
I don't think the transaction fee will be increased to become cost-uncompetitive when seignorage declines!

In case you don't know what seignorage is (like I didn't), I Googled it and it appears to be the "cost of making money" something like that.

I don't think it's fair to assume that the transaction fees won't be increased.  I assume the bitcoin community will always do what is good for bitcoin.

If that includes fee increases or decreases, we'll see, but I do agree that the fees would only increase if that was a good thing for the miners.  So if they were to do anything to harm the community (and thus price), it would ultimately hurt the miners.  So we'll see how much blood is squeezed from the onion.

For now, the fees remain a very small fraction of the mining revenues, so I suspect we're debating about 10-20 years from now at least... what a problem to have if we make it that far!

CampBX for buying BTCs, Coinbase for selling BTCs or Vircurex for trading alternate cryptocurrencies like DOGEs

PM me with any questions on these sites!  Happy to help!

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Spondoolies-Tech or KnC Miner for the fastest mining hardware available!

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December 27, 2014, 09:36:34 AM
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In case you don't know what seignorage is (like I didn't), I Googled it and it appears to be the "cost of making money" something like that.

Seignorage is the value of money created minus cost of creating money.

In the case of fiat, say the government prints USD 1 million. The cost of printing bills might only be USD 10K. The remaining would be called seignorage.

In the case of Bitcoin, seignorage would be the block reward minus costs incurred by a miner (electricity, hardware costs). I think the article is talking about the block reward halving.
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