difficulty too high while bitcoin society too small

[afterburner229]

Hi, there

I studied a lot of bitcoin-associated info in last few days. So I see one problem - the idea is excellent, but the
"constant set" is bad-adjusted.

I consider "constant set" is:
- total number of bitcoins = 21 mln.
- average block generation rate = 1 in 10 minuts
- BTC profit per block generated/closed = 50 BTC per block

See, the "constant set" mentioned above leads to exponential difficluty, in LAST FEW DAYS: roughly
- 144000 for 3-5 days ago
- 240000 for now
- 360000 for 3-5 days in nearest future (some 1100 blocks remain till next difficulty increase).

Next, see: bitcoin society is some 10 000 people now, while for bitcoin currency system to work economically stable, it need some 100 000 people or more, spread around the world.

Next, if I want to enter bitcoin mining society now, as a newbie, I need:
- spend some $1000 for mining rig, or more
- use mining pools
- profit decreases exponentially

Of course you say, deflation scenario is not a problem because we can divide 1 bitcoin till 8 digits, also BTC/$ exchange ratio is adjusting automatically while deflation takes place..

I say : NO, it's THE PROBLEM, because bitcoin mining society is some 10 000 people, NOT some 100 000, NOT million, while Earth's population is 6 000 000 000 people, see 10 000 / 6 000 000 000 is TOO TINY for stability!

bitcoin society is in SEVERE DANGER of collapse!

What to do? May be, we need "constant set" adjustment, to attract MUCH MORE people?

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[benjamindees]

Personally I think the solution is to help and encourage large BTC holders to purchase things produced within the BTC economy.  There needs to be a way to facilitate that.

In other words, instead of spending $1000 on mining equipment to see diminishing returns, newcomers can spend $1000 on producing some good and see rising returns.

[FreeMoney]

Generally if you want something and don't want to do it yourself you can pay someone. I highly recommend that strategy.

[afterburner229]

Personally I think the solution is to help and encourage large BTC holders to purchase things produced within the BTC economy.  There needs to be a way to facilitate that.

In other words, instead of spending $1000 on mining equipment to see diminishing returns, newcomers can spend $1000 on producing some good and see rising returns.

Oh, no, no, no

What is bitcoin? Why I am being newbie, should trust in it? What motivation for me to sell goods for BTC??!

bitcoin society is some 10 000 people, and current software (with current "constant set") DOES limit bitcoin society in some 100 000 people or less, because difficulty is being normalized to generate constant number of blocks per unit time, 1 bock per 10 minutes.

you see, 10 000 people is NOT a thing to trust in, or to operate with.

and you see, no one miner will remove his mining power from generation process, so difficulty will increase till mining will be unprofitable acording to electricity power costs. This moment will be reached in some 100 000 people attracted for mining, or less.

As 10 000 people, 100 000 people is NOT a thing to trust in, or to operate with. IN TERMS of wold-wide totally distributed currency!

So, your politics is simply turns bitcoin system into small financial 'sect', or 'pyramid'.

I think, bitcoin "constant set" MUST be normalized to reach EXPONENTIAL newbie miner income rate, TILL 1 000 000 people will be attracted for mining. Then you may change EXPONENTIAL rate to some POLINOMINAL one, then to some LINEAR one, and then, to some CONSTANT. This limited constant number of miners should be some 100 000 000 - 1 000 000 000, i.e. each 1/100-1/10 Earth's citizen should be miner or peer.

Otherwise, no motivation for newbies, and apparent bitcoin system failure in nearest future (2012 at 25 BTC per block switch) with max. number of attracted people some 100 000.

[elewton]

I really see your point afterburner.
We would very much like to spread exponentially.  I am working on a free website that uses Bitcoins, but it is difficult, since I'm not a professional programmer and am busy with working at getting the old money I need to live and get enough Bitcoins to start up the website.

The best thing we can do is spread the increase usefulness of Bitcoin.  I agree that it's risky to invest in the Bitcoin economy, but I like to take risks occasionally, and my estimation of the potential usefulness of Bitcoin makes it worthwhile to me.  Does it to you?

[Garrett Burgwardt]

You're missing the point that bitcoin mining isn't meant to be that  profitable for most people.

There is far too much focus on mining in the media attention IMO.

[afterburner229]

I really see your point afterburner.
We would very much like to spread exponentially.  I am working on a free website that uses Bitcoins, but it is difficult, since I'm not a professional programmer and am busy with working at getting the old money I need to live and get enough Bitcoins to start up the website.

The best thing we can do is spread the increase usefulness of Bitcoin.  I agree that it's risky to invest in the Bitcoin economy, but I like to take risks occasionally, and my estimation of the potential usefulness of Bitcoin makes it worthwhile to me.  Does it to you?

I understand you, but at your piont of view, bitcoin is just financial game or little risky business.

At my point, bitcoin is what OFFICIAL bitcoin site writes: WORLD-WIDE totally distributed, totally defended, and totally mathematically prooven currency, not just dollar replacement, but even GOLD replacement.

The value of Gold is confirmed by 6 000 000 000 Earth's citizen, the value of bitcoin is confirmed by 10 000 people. Feel the difference? That's while bitcoin, from mathematical point of view, IS the strong replacement for gold.

But real confirmation may be acheved ONLY by number of attracted people, NOT mathematics! No one cares, what mathematics prooves! It's geeky!

Also, if we allow attraction of 1 000 000 people as base minimun, it will be a win-win strategy for all us. I.e. it will be, in total perspective, much more profitable game, than now. And much less risky.

[afterburner229]

You're missing the point that bitcoin mining isn't meant to be that  profitable for most people.

There is far too much focus on mining in the media attention IMO.

Of course, but 10 000 current people is simply nothing to do with, for the GLOBAL currency.

See, FEW days ago, at difficult 144 000, I WAS ready to mining, but FEW days after today, at difficult 360 000 I WILL NOT BE ready.

Feel, FEW days, not FEW years, not FEW months! And 10 000 people, NOT 100 000, NOT 1 000 000 000.

This is the problem!

[BitLex]

what has all of this todo with mining?


there's no 6 000 000 000 Earth's citizens mining gold, that's just a few hundred.

bitcoin is not about mining coins, it's about transferring coins.
you don't need to mine bitcoins to value bitcoins.

[mewantsbitcoins]

Calm down.

There is no problem. User base is steadily increasing as is difficulty. Mining isn't for general public and soon it won't be for gamers/amateurs either. In the future few people with knowledge, time and a hefty investment will be able to mine. Bitcoin is meant to be traded for goods and services - not mined. Mining is just the way to introduce it into circulation

[elewton]

...the value of bitcoin is confirmed by 10 000 people....

Pff.  No it isn't.  If you offered most people here 100,000 USD worth of Bitcoins or 50,000 USD worth of Gold and 50,000 worth of Bitcoins, I bet they'd take the diversified risk.

There are simply 10,000 (or whatever) people who have sufficient faith in Bitcoin to make it part of their personal economic decisions.

[afterburner229]

what has all of this todo with mining?


there's no 6 000 000 000 Earth's citizens mining gold, that's just a few hundred.

bitcoin is not about mining coins, it's about transferring coins.
you don't need to mine bitcoins to value bitcoins.

Yes, there's no 6 000 000 000 Earth's citizens mining gold, that's just a few hundred.

But 6 000 000 000 Earth's citizens CONFIRM value of Gold.

And only 10-20 000 people, according of what percentage do not mine, just sell or buy bitcoins & goods, CONFIRM value of bitcoin.

If number of miners will be frozen by the current algorithm, number of people who trust in bitcoin, will be drop down - just at 25 BTW per block switch. So I proove, bitcoin is just financial 'pyramid', if you do not change current algorithm.

[afterburner229]

...the value of bitcoin is confirmed by 10 000 people....

Pff.  No it isn't.  If you offered most people here 100,000 USD worth of Bitcoins or 50,000 USD worth of Gold and 50,000 worth of Bitcoins, I bet they'd take the diversified risk.

There are simply 10,000 (or whatever) people who have sufficient faith in Bitcoin to make it part of their personal economic decisions.

See my comment below - if there are only 10 000 miners in the world frozen, I do not trust in bitcoin, because number of people who confirm value of bitcoin is COMPARABLE to number of miners. It is not a rule, it's just happen for bitcoin historically.

(!) For gold, number of people who confirm value >> number of miners.

With digital currency you never achive Gold rate of confirmation, at 10 000 people who mine.

[kjj]

I'm sorry man, I just can't understand what it is that you are trying to say.  I think you are upset that you missed the goldrush.  But we can't make the block hashing easier just to give you another shot at mining riches.

[afterburner229]

I'm sorry man, I just can't understand what it is that you are trying to say.  I think you are upset that you missed the goldrush.  But we can't make the block hashing easier just to give you another shot at mining riches.

I just say, I even proove, with current algorithm, bitcoin system will fail down somewhere in 2012, probably at switch 50 BTC to 25 BTC per block. More exactly - when mining will reach unprofitable against electrical power, with typical hardware for newbie - 5850x2 or 5970.

It happens because number of people who confirm value of bitcoin is comparable with number of miners. And this situation does NOT take place with Gold. ALL people on Earth trust in gold value. 20 000 people trust in bitcoin value.

And you leave no way to join to trust in bitcoin. The only method - allow mining to be profitable to MILLIONS of people at time intervals YEARS, not DAYS (see difficalty rate & prognosis).

[stic.man]

Isn't this the reason why the transaction fees exist?  Won't the fees subsidize the increased difficulty/reduced rewards for mining?

[FooDSt4mP]

I'm sorry man, I just can't understand what it is that you are trying to say.  I think you are upset that you missed the goldrush.  But we can't make the block hashing easier just to give you another shot at mining riches.

I just say, I even proove, with current algorithm, bitcoin system will fail down somewhere in 2012, probably at switch 50 BTC to 25 BTC per block. More exactly - when mining will reach unprofitable against electrical power, with typical hardware for newbie - 5850x2 or 5970.

It happens because number of people who confirm value of bitcoin is comparable with number of miners. And this situation does NOT take place with Gold. ALL people on Earth trust in gold value. 20 000 people trust in bitcoin value.

And you leave no way to join to trust in bitcoin. The only method - allow mining to be profitable to MILLIONS of people at time intervals YEARS, not DAYS (see difficalty rate & prognosis).

So you're saying you would be more confident about bitcoin if there was a larger percentage of non-miners?  I might agree to that, but I don't think we need to be yelling about the sky falling just yet.  The economy is growing.

[barbarousrelic]

"There aren't enough people in the Bitcoin community" is correct. But it is relatively new, and so this is to be expected.

Also, you are conflating the Bitcoin mining community with the Bitcoin community itself. They are not the same. Mining is not the point of Bitcoin. You don't have to be a miner to be involved with Bitcoin.

If mining becomes unprofitable for its electric power, either the difficulty will drop (as people stop mining) or the value of Bicoins will increase. It's self-correcting.

It happens because number of people who confirm value of bitcoin is comparable with number of miners. And this situation does NOT take place with Gold. ALL people on Earth trust in gold value. 20 000 people trust in bitcoin value.

And you leave no way to join to trust in bitcoin. The only method - allow mining to be profitable to MILLIONS of people at time intervals YEARS, not DAYS (see difficalty rate & prognosis).

Miners are not the entirety of the Bitcoin community. I do not mine and I trust Bitcoin for a fraction of my wealth.

[da2ce7]

people will stop mining when it gets unprofitable.  This will reduce the ratio of miners / non-miners.  Making the economy stable again.

Edit: you are also forgetting about technology advances that improve mining.  They increase the difficulty _while_ reducing the total number of people mining.  (That was seen when many people dropped out when CPU mining became unprofitable).

[server]

I just say, I even proove, with current algorithm, bitcoin system will fail down somewhere in 2012, probably at switch 50 BTC to 25 BTC per block. More exactly - when mining will reach unprofitable against electrical power, with typical hardware for newbie - 5850x2 or 5970.

It happens because number of people who confirm value of bitcoin is comparable with number of miners. And this situation does NOT take place with Gold. ALL people on Earth trust in gold value. 20 000 people trust in bitcoin value.

And you leave no way to join to trust in bitcoin. The only method - allow mining to be profitable to MILLIONS of people at time intervals YEARS, not DAYS (see difficalty rate & prognosis).

I think aftherburner229 is right.
And the group of people thinking this and acting on it, will increase.

Also a few people (the pre-goldrush users, seniors and moderators of this forum) try to protect their investments/wealth, are not objective, this stands in the way of a bitcoin breakthrough.

[da2ce7]

I just say, I even proove, with current algorithm, bitcoin system will fail down somewhere in 2012, probably at switch 50 BTC to 25 BTC per block. More exactly - when mining will reach unprofitable against electrical power, with typical hardware for newbie - 5850x2 or 5970.

It happens because number of people who confirm value of bitcoin is comparable with number of miners. And this situation does NOT take place with Gold. ALL people on Earth trust in gold value. 20 000 people trust in bitcoin value.

And you leave no way to join to trust in bitcoin. The only method - allow mining to be profitable to MILLIONS of people at time intervals YEARS, not DAYS (see difficalty rate & prognosis).

People trust Bitcoin because it is secure, not because they are mining it themselves.

[afterburner229]

Isn't this the reason why the transaction fees exist?  Won't the fees subsidize the increased difficulty/reduced rewards for mining?

Remember, when all bitcoins will be mined, transaction fees are the ONLY source of profit. Of course.

but @ 10 000 miners & trusters, we should reject all second-order arguments, but focus only on number of miners & trusters.
bitcoin specifics is number of miners ~ (roughly equal) number of trusters. due to digital, non-material nature of bitcoin.

it's just psychology effect, but no one cares, if bitcoin system fails with it's 10 000 - 20 000 adopters.

ps. do you know SHA-256 is partially broken ?

[vuce]

ps. do you know SHA-256 is partially broken ?

citation needed.

edit: how exactly can you "partially break" a hash function?

[afterburner229]

People trust Bitcoin because it is secure, not because they are mining it themselves.

It's MAIN mistake! People trust in bitcoin because 10 000 - 20 000 OTHER people already trust!

SHA-256 is partially broken, and algorithms themselves do almost nothing with trust. Did you study psychology?

algorithms lead earlier adopters - miners & brokers - to trust in, because they were geeks.

[afterburner229]

http://en.wikipedia.org/wiki/Sha-256

[barbarousrelic]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

[mestar]

And you leave no way to join to trust in bitcoin. The only method - allow mining to be profitable to MILLIONS of people at time intervals YEARS, not DAYS

Ok, I will personally ALLOW you to mine bitcoins profitably.

[mestar]

It's MAIN mistake! People trust in bitcoin because 10 000 - 20 000 OTHER people already trust!

But, what does this have to do with mining?   

Your rant seems to be about the issue that new people can't mine profitably.  Person number 20.001 will trust in bitcoins because 20.000 people already trust in it, not because 20.000 are mining.

I'm sure there are some people who are mining, but still don't think the bitcoin will be around in 10 years.

Are you saying that the mining is the only way people can learn about bitcoin and start to use it?

What method do you propose that would allow million people to mine profitably.  Each gets his fair share? How?

[kjj]

People trust bitcoin because the math is so difficult that it requires a lot of time, even when the entire world gets together to throw a massive amount of computing power at the hashing.

It really makes no difference if a thousand people are participating in mining, or a billion.  What matters is that it can't be faked.

[afterburner229]

But, what does this have to do with mining?   

Your rant seems to be about the issue that new people can't mine profitably.  Person number 20.001 will trust in bitcoins because 20.000 people already trust in it, not because 20.000 are mining.

Psychology is NOT mathematical induction. And bitcoin is NOT a gold. Number of trust people will not increase just because 20 000 people already trust. You must represent them a psychological kind of ownership. I know too ways - mining & zombie-hypnosis.

Simply, 20 000 trusters in 6 000 000 000 world is UNseriously for GLOBAL currency, but is acceptable for a financial pyramid.

I'm sure there are some people who are mining, but still don't think the bitcoin will be around in 10 years.

Sure too. But for me, FEW days ago, mining was profitable, and FEW days later will NOT. See, DAYS, DAYS, DAYS. not even months!!!
This is the problem - difficulty doubling time interval is DAYS.

Are you saying that the mining is the only way people can learn about bitcoin and start to use it?

What method do you propose that would allow million people to mine profitably.  Each gets his fair share? How?

Because of bitcoin complete digital unmaterial nature, I see the only way - to normalize algorithm to allow profitable mining for 1 million people on time interval at least 1 year. NOT DAYS! NOT 10 000 people!
 

[afterburner229]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

OHH if SHA-2 has been broken we simply do not discuss here at all.

a half of number of rounds during SHA-2 computing has just been broken.

[FooDSt4mP]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

OHH if SHA-2 has been broken we simply do not discuss here at all.

a half of number of rounds during SHA-2 computing has just been broken.

If this is true, the mining software can be updated and we will double the hashing power of the mining network overnight.  Bitcoin will remain just as secure.

[afterburner229]

People trust bitcoin because the math is so difficult that it requires a lot of time, even when the entire world gets together to throw a massive amount of computing power at the hashing.

It really makes no difference if a thousand people are participating in mining, or a billion.  What matters is that it can't be faked.

Understand you, but disagree. only geeks take care it can't be faked.

Paper's dollars can be faked. But people trust in them because everyone MUST accept it as a currency media.

When you understand, that whether bitcoin can be faked or not - is just psychological reason to trust for FIRST adopters, that are simply geeks?!

[MoonShadow]

People trust bitcoin because the math is so difficult that it requires a lot of time, even when the entire world gets together to throw a massive amount of computing power at the hashing.

It really makes no difference if a thousand people are participating in mining, or a billion.  What matters is that it can't be faked.

Understand you, but disagree. only geeks take care it can't be faked.

Paper's dollars can be faked. But people trust in them because everyone MUST accept it as a currency media.

This is not so.  The average Joe only cares that his paper currency can be taken to another store next week or next month and buy (almost) as much as he had to give to get it.  For the average Joe, the relative difficulty in counterfitting is only important in that same context.

[barbarousrelic]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

OHH if SHA-2 has been broken we simply do not discuss here at all.

a half of number of rounds during SHA-2 computing has just been broken.

Again, please post a link showing what you're claiming. I'm not entirely sure what you're saying, but the Wikipedia link does not mention this. In fact, the link you post says "these attacks have not been successfully extended to SHA-2."

[vuce]

http://en.wikipedia.org/wiki/Sha-256

SHA-1 has been shown to be weak. SHA-2, used in Bitcoin, has not been broken.

OHH if SHA-2 has been broken we simply do not discuss here at all.

a half of number of rounds during SHA-2 computing has just been broken.

Again, please post a link showing what you're claiming. I'm not entirely sure what you're saying, but the Wikipedia link does not mention this. In fact, the link you post says "these attacks have not been successfully extended to SHA-2."

he obviously has no idea what he's talking about.

[afterburner229]

This is not so.  The average Joe only cares that his paper currency can be taken to another store next week or next month and buy (almost) as much as he had to give to get it.  For the average Joe, the relative difficulty in counterfitting is only important in that same context.

So I see you start to understand me.

But yet I don't know are you honest person or just a pyramid gamer. That's ok because of anonymous nature of our discussion and bitcoin too.

See, average Joe TRUSTs his paper currency can be taken to another store next week or next month. I am average Joe, and I just count number of people who accept bitcoins - the number is some 10 000. In my country, Russia, the only bitcoin excange btcex.com is CLOSED. Reason is dim. Beeing average Joe I simply do NOT trust in bitcoin as currency, in CURRENT moment with 10 000 other trusters.

But what can I do else? Reject bitcoin at all. Or.. MINING!

Consider current situation, there are some 10 000 miners. FEW days ago I could be miner. FEW days later I never can, with current algorithm of difficulty.

When you understand, these FEW days of difficulty-doubling interval is the problem, and 10 000 people in the 6 000 000 000 world who accept bitcoins is the problem.

I see the only way - normalize difficulty algorithm to allow profitable mining for 1 000 000 people around a world. at least. And I sure this is win-win way for all of us.

In the future, most miners will become peers, when all bitcoin will be mined. So transaction fees (for transaction to pass quickly) will be low.

Current algorithm of difficult makes it untrustable to enter in bitcoin world, so it will fail at 10 000 miners & 10 000 trusters/accepters of bitcoin world-wide.

[error]

Changing "difficulty" in that way would break Bitcoin. Perhaps you should study it more closely.

As for Russia, btcex.com disappeared because its operator was apparently a scammer, who also was apparently involved somehow in DDoS attacks on some other Bitcoin exchanges. Lots of people lost money when btcex.com closed. This is unfortunate.

Perhaps instead of complaining about mining being unprofitable, you should do something that IS profitable, like open a new exchange and run it honestly?

[afterburner229]

Again, please post a link showing what you're claiming. I'm not entirely sure what you're saying, but the Wikipedia link does not mention this. In fact, the link you post says "these attacks have not been successfully extended to SHA-2."

----------------
Currently, the best public attacks break 41 of the 64 rounds of SHA-256 or 46 of the 80 rounds of SHA-512, as discussed in the "Cryptanalysis and Validation" section below.[10]
----------------
--from http://en.wikipedia.org/wiki/Sha-256

but this is academical interest only, because I mentioned, whether sha-256 and bitcoin at all is cryptographically strong or not - is just psychological motivation for earlier bitcoin adopters because they are geeks. ang geeks trust in mathematics.

Average Joe is stupidly counting number of people who accept bitcoins worldwide and who mine worldwide.

[vuce]

----------------
Currently, the best public attacks break 41 of the 64 rounds of SHA-256 or 46 of the 80 rounds of SHA-512, as discussed in the "Cryptanalysis and Validation" section below.[10]
----------------
--from http://en.wikipedia.org/wiki/Sha-256

those attacks have time complexity of 2^500. Hardly a threat. (especially when birthday paradox tells you probabilistic attack has (expected) time complexity of 2^256)

[afterburner229]

Changing "difficulty" in that way would break Bitcoin. Perhaps you should study it more closely.

As for Russia, btcex.com disappeared because its operator was apparently a scammer, who also was apparently involved somehow in DDoS attacks on some other Bitcoin exchanges. Lots of people lost money when btcex.com closed. This is unfortunate.

Perhaps instead of complaining about mining being unprofitable, you should do something that IS profitable, like open a new exchange and run it honestly?

Exactly no!

I know, algorithm change is a HUGE problem. Not technical one - bitcoin supports several protocol vrsions. You, 10 000 miners & adopters, will loose profit in a short-interval future. And long-interval future is DIM at all for all business.

So if you advice me "do something else (but mining) that IS profitable", in context of difficult-doubling interval of FEW days, and bitcoin adopters of FEW 10 000 people world-wide - it carries out a "message" following:

"we know about the problem, but we are pyramid gamers, and just try to output our money, to save our short-interval profit."

wake up! this politics will apparently kill bitcoin far soon than somewhere in 2012, @ 50-to-20 BTC per block switch.

[error]

All right, well since you don't know what you're talking about and have no interest in learning, I wish you good luck. Bye

[kjj]

I just read this whole thread again, and I still can't understand your point, apart from missing out on the goldrush.

[afterburner229]

All right, well since you don't know what you're talking about and have no interest in learning, I wish you good luck. Bye

Estimated   386297 in 894 blks
^^^^^^^^^^^^^^^^^^^
http://bitcoincharts.com/markets/

No problem! I see you understand EXACTLY what I talking about - you are just pyramid gamer, you do not care that bitcoin failure will discredit the whole idea of decentrolized distributed currency in eye of 6 000 000 000 average Joes.

[afterburner229]

I just read this whole thread again, and I still can't understand your point, apart from missing out on the goldrush.

Yes, I say APPARENTLY - I am missing out on the goldrush, because FEW days ago difficult was 244000, and FEW days prognosis is 380000.
Few days ago I could be miner, few days later I never could.

I do not what to do something most profitable than mining, because I do not trust to 10 000 bitcoin miners/accepters worldwide - I need some 1 000 000 worldwide, in 6 000 000 000 world!

And I am that EXACTLY average Joe with $1000 for 5850x2 or 5970 miner rig.

Do you want you 10 000 guys will manage the world?! Bitcoin is a monopoly much stronger than dollar?!

[afterburner229]

IMAGINE REAL GOLD MINING BECOMES UNPROFITABLE FOR INDIVIDUAL GOLD-DIGGER IN TIME INTERVAL OF FEW DAYS.
while total number of gold-diggers is 10 000 in 6 000 000 000 world.

guys can you think by head?

[barbarousrelic]

IMAGINE REAL GOLD MINING BECOMES UNPROFITABLE FOR INDIVIDUAL GOLD-DIGGER IN TIME INTERVAL OF FEW DAYS.
while total number of gold-diggers is 10 000 in 6 000 000 000 world.

guys can you think by head?

Real gold mining is unprofitable for most people, so if they want gold, they provide goods and services in exchange for other peoples' gold.

Why don't you try selling stuff on biddingpond.com or bitcoin classifieds?

[afterburner229]

Total BTC already mined is 6.306 mln. from 21 mln.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
http://bitcoincharts.com/markets/

Imagine just 1/3 real gold is mined, and individual mining is unprofitable, but FEW days ago it was profitable @ 7:1 per individual gold-miner (per electricity cost).

THINK!

[afterburner229]

Real gold mining is unprofitable for most people, so if they want gold, they provide goods and services in exchange for other peoples' gold.

Why don't you try selling stuff on biddingpond.com or bitcoin classifieds?

Did you read all my posts? I answered, I do not trust in 10 000 bitcoin accepters & miners, I will provide goods for dollars, because 6 000 000 000 people world-wide accept dollars. Even in Russia

I am, average Joe, will trust in bitcoin, only if I can mine bitcoin profitably. Gold & dollars are historically trusted, bitcoin is NOT.

For bitcoin - can't mine <=> can't trust. In CURRENT difficulty rate situation. In CURRENT number of bitcoin acceptors.

[error]

Did you read all my posts? I answered, I do not trust in 10 000 bitcoin accepters & miners, I will provide goods for dollars, because 6 000 000 000 people world-wide accept dollars. Even in Russia

I am, average Joe, will trust in bitcoin, only if I can mine bitcoin profitably. Gold & dollars are historically trusted, bitcoin is NOT.

For bitcoin - can't mine <=> can't trust. In CURRENT difficulty rate situation. In CURRENT number of bitcoin acceptors.

Oh, so you're crazy.

[mewantsbitcoins]

Wake up and stop trolling

[bitcoinBull]

Yes, I say APPARENTLY - I am missing out on the goldrush, because FEW days ago difficult was 244000, and FEW days prognosis is 380000.
Few days ago I could be miner, few days later I never could.

I do not what to do something most profitable than mining, because I do not trust to 10 000 bitcoin miners/accepters worldwide - I need some 1 000 000 worldwide, in 6 000 000 000 world!

And I am that EXACTLY average Joe with $1000 for 5850x2 or 5970 miner rig.

Do you want you 10 000 guys will manage the world?! Bitcoin is a monopoly much stronger than dollar?!

Doubling of difficulty means going from 10,000 miners to 20,000 and on the way to a million miners.  Isn't that what you want?

Your problem is that you cant see before or beyond the difficulty increase to the bitcoin price increase.  Before you got here the difficulty was flat around 100,000 and BTC was under $1.00. 

Then BTC went to almost $10.  Now difficulty is heading towards a million to match the 10x increase in price.

When difficulty is at a million and BTC is $10, mining will seem like a losing bet.  Some will quit and sell their coins. 

Come back in a few months.  The price will go to $50 or $100.  Difficulty will follow from one million to ten million, and all the new miners will complain that the sky is falling, difficulty is headed towards the moon (a good thing btw), and bitcoin is doomed.

[amincd]

Did you read all my posts? I answered, I do not trust in 10 000 bitcoin accepters & miners, I will provide goods for dollars, because 6 000 000 000 people world-wide accept dollars. Even in Russia

That is of course the disadvantage of bitcoin to established currencies: they are widely accepted and bitcoin is not. There needs to be some perceived advantage that bitcoin has to established currencies that encourages adoption despite its being less widely accepted, and so far it has had that, since its adoption rate has been very high.

The increases in difficulty increase trust in bitcoin, because they are a result of greater computing power, and greater computing power increases security.

[afterburner229]

Did you read all my posts? I answered, I do not trust in 10 000 bitcoin accepters & miners, I will provide goods for dollars, because 6 000 000 000 people world-wide accept dollars. Even in Russia

I am, average Joe, will trust in bitcoin, only if I can mine bitcoin profitably. Gold & dollars are historically trusted, bitcoin is NOT.

For bitcoin - can't mine <=> can't trust. In CURRENT difficulty rate situation. In CURRENT number of bitcoin acceptors.

Oh, so you're crazy.

Yes, I am, as crazy as difficulty rate @ http://bitcoincharts.com

[afterburner229]

Doubling of difficulty means going from 10,000 miners to 20,000 and on the way to a million miners.  Isn't that what you want?

Your problem is that you cant see before or beyond the difficulty increase to the bitcoin price increase.  Before you got here the difficulty was flat around 100,000 and BTC was under $1.00. 

Then BTC went to almost $10.  Now difficulty is heading towards a million to match the 10x increase in price.

When difficulty is at a million and BTC is $10, mining will seem like a losing bet.  Some will quit and sell their coins. 

Come back in a few months.  The price will go to $50 or $100.  Difficulty will follow from one million to ten million, and all the new miners will complain that the sky is falling, difficulty is headed towards the moon (a good thing btw), and bitcoin is doomed.

First good argument, you know, I was waiting for it. But 95% of 10 000 bitcoin adopters were so unlogical! But they all are still geeks!

I agree with this argument, but the problem is ALL you mentioned takes place in the field of.. 10 000 players! bitcoin excange ratio is too unstable, and money output is too unguaranteed.

DANGER, extreme exponential games take place in the field of some 10 000 players!
 

[afterburner229]

Also, I used

http://www.alloscomp.com/bitcoin/calculator.php

to see, difficulty rises faster than $/BTC exchange ratio.

and I can not find any prooven data of rising of number of bitcoin acceptors world-wide.

some exchange closes (btcex.com) take place..

[afterburner229]

The increases in difficulty increase trust in bitcoin, because they are a result of greater computing power, and greater computing power increases security.

I wrote about this too - difficulty increases trust just for you, first 10 000 mining geeks.

For me, average Joe, trust depends on number of bitcoin acceptors world-wide, and because this number is so poor, as 10 000 miners, the only way to trust for me - being attracted to profitable mining myself.

FEW days ago I could mine profitably. Few days later I never can mine due to difficulty. So, average Joe does not trust in bitcoin.

[vuce]

Actually, mining is much more profitable now than when bitcoin was only worth 80 cents (and difficulty was about 95000)... So this whole "early adoption" idea falls a bit short.

[error]

Then why are you still here? Go try to find some other get-rich-quick scheme. Bitcoin is not.

[amincd]

I wrote about this too - difficulty increases trust just for you, first 10 000 mining geeks.

It increases security of every bitcoin holder's currency as it makes the bitcoin transaction record more difficult to attack. This element increases trust.

For me, average Joe, trust depends on number of bitcoin acceptors world-wide, and because this number is so poor, as 10 000 miners, the only way to trust for me - being attracted to profitable mining myself.

What exactly do you mean by "trust" here? Trust that any bitcoins you acquire will be safe from theft/hacking? That they won't devalue due to inflation?

[afterburner229]

Actually, mining is much more profitable now than when bitcoin was only worth 80 cents (and difficulty was about 95000)... So this whole "early adoption" idea falls a bit short.

Also good argument. Above, I was mixing two notions - profit in dollars, and profit in bitcoins. I hope wether you detect this.

Of course, if we allow some 1 000 000 people to mine profitably in bitcoins, $/BTC ratio will fall down.
That is situation with 1 000 000 new miners attracted somewhat similar to situation you mentioned above.

But somewhat not similar - if other average Joes see, that 1 000 000 people already trust in bitcoin, it will keep $/BTC at high positions!

Despite, you still do not understand my accent:
________________________________________
NOT profit in dollars is matter. FEW days time interval of difficulty-doubling IS matter WHILE there are 10 000 players worldwide in the field only, AND just 1/3 of total bitcoins are mined.
________________________________________

To verify the danger, simply replace bitcoin by real gold: INDIVIDUAL real-gold miners WERE ABLE to mine real gold profitably FOR YEARS.
Was Real-gold mining difficulty being increased TWICE in the FEW DAYS?! Not $/gold exchange ratio, but difficulty of mining gold?!

[afterburner229]

What exactly do you mean by "trust" here? Trust that any bitcoins you acquire will be safe from theft/hacking? That they won't devalue due to inflation?

For me, average Joe, trust is just acceptance world-wide. If there is no good acceptance - only 10 000 people world-wide, let me mine bitcoins with my average Computer!

Then I decide myself, what I prefer - keep BTC, or output $.

small bitcoin society & unprofitable mining - no trust. it so simple.

what about strong cryptography - let geeks to headache about.

[rezin777]

I wrote about this too - difficulty increases trust just for you, first 10 000 mining geeks.

For me, average Joe, trust depends on number of bitcoin acceptors world-wide, and because this number is so poor, as 10 000 miners, the only way to trust for me - being attracted to profitable mining myself.

FEW days ago I could mine profitably. Few days later I never can mine due to difficulty. So, average Joe does not trust in bitcoin.

What you seem to want, world-wide acceptance of Bitcoin, and the security that comes with it (I can trust Bitcoins because everyone uses them), is impossible to achieve instantly (or even very quickly) without a world-wide government to enforce it.

So, do you want to be forced to use Bitcoins? I didn't think so.

So, accept the fact that Bitcoin has to grow before it is a stable / secure currency. It can not grow from a calf to a whale overnight. It takes time.

If you are afraid that it won't grow, even though many signs are pointing in the other direction, feel free to avoid using Bitcoin. No one is forcing you.

Increasing difficulty means the computational power of the network is increasing. When the computational power of the network increases, Bitcoin is less susceptible to attack. If Bitcoin is more secure, it's more secure for every potential user of Bitcoin, not just the people currently using it.

Finally, you don't have to mine to use Bitcoin. No one is guaranteeing that mining will be profitable either. Nor should they. The other thing you seem to want, fantastic free money for everyone who wants to grab it, is a fairytale. It occurs, but it doesn't last, because everyone realizes there is fantastic free money for everyone who wants to grab it, and they grab it! Which is why the difficulty will continue to go up until mining is barely profitable.

[BitterTea]

For me, average Joe, trust is just acceptance world-wide. If there is no good acceptance - only 10 000 people world-wide, let me mine bitcoins with my average Computer!

Mining is completely tangential to the acceptance of Bitcoin. Mining serves a valuable purpose, which is to secure the network against attack. But the initial money must come from somewhere, so a subsidy was added - when you find a block you can reward yourself with 50 BTC.

This has almost nothing to do with the use of Bitcoin as a money.

small bitcoin society & unprofitable mining - no trust. it so simple.

Mining is profitable, otherwise difficulty would decrease.

what about strong cryptography - let geeks to headache about.

What are you talking about? Perhaps you would be better off discussing this on a forum of your native language?

[Vandroiy]

Mining will just cease to be important after 2012.

We don't really need a lot of miners. We only need the network to agree on a valid block chain, and the deeper I look into this problem, the more it looks like it can be solved with very few miners.

I just hope that spending by rich BTC holders will commence in a smooth fashion at increasing market size, so the pre-2011 coins don't disturb the economy because of being controlled by too few people. Let's just hope that the early adopters use their coins wisely, or give them away slowly.

Mining... get over it. Over a quarter of it is done, and the rest will be distributed over a huge network. Now, we are getting an increasingly good configuration, with the mined coins spread over many people.

[MoonShadow]

Mining will just cease to be important after 2012.

We don't really need a lot of miners. We only need the network to agree on a valid block chain, and the deeper I look into this problem, the more it looks like it can be solved with very few miners.

I just hope that spending by rich BTC holders will commence in a smooth fashion at increasing market size, so the pre-2011 coins don't disturb the economy because of being controlled by too few people. Let's just hope that the early adopters use their coins wisely, or give them away slowly.

Mining... get over it. Over a quarter of it is done, and the rest will be distributed over a huge network. Now, we are getting an increasingly good configuration, with the mined coins spread over many people.

I was really hoping that you had a better understanding of all this by now.

[afterburner229]

rezin777, bitterTea

you say right things but you DO NOT compute numbers!

Of course, mining is profitable, otherwise difficulty will decrease!

Compute profit, for example by

http://www.alloscomp.com/bitcoin/calculator.php

- How mining profit decreases TWICE in FEW days?! Despite $/BTC is still rising in average.
- How it takes place while just 10 000 miners & 10 000 acceptors in the game field?!
- How it takes place while just 1/3 of total gold is mined?!

Old miners NEVER leave the field, so profit will fall VERY close to zero, in FEW weeks,
according to current difficulty rate.

Bitcoin's economical behaviour is NOT similar to real gold one!

And trust to bitcoin is tiny while bitcoin society is tiny.

Bitcoin is like an UFO, not Gold.

[rezin777]

- How mining profit decreases TWICE in FEW days?! Despite $/BTC is still rising in average.

There is a delay between price increase and new miners. You can't just magically turn on new hardware, you have to buy it, wait for it to arrive, and build it. The increase we are seeing now probably has something to do with Bitcoins hitting $9 USD each a little while ago. If the price continues down or remains steady, eventually mining will taper off or remain steady as well.

Old miners will leave the field, when it's no longer profitable to them. Are you suggesting they have an unfair advantage? I'm so tired of hearing that. The first person with the wheel had an unfair advantage too, it doesn't mean the wheel is a bad tool.

And who said Bitcoin has to mirror gold? That's just an example.

Yes, Bitcoin is a risky investment until millions have invested, even then there is risk. What is your point? You want a risk free investment? Me too! Let me know when you find it.

[afterburner229]

I suppose GPU are the breakers of bitcoin society.

Once each average Joe is able to use ATI GPUs for mining, his Mhash/s power jumped up in roughly 100 times!

So, when one new GPU average Joe comes to the game field, it equal to 100 old, CPU average Joes.

Then, other 10 000 Joes bought ATI GPUs in SHORT time period - and because, difficulty-doubling interval is FEW days for now.

So, 10 000 CPU average Joes become 10 000 ATI GPU average Joe, while almost zero NEW average Joes come to the field. Don't matter, if CPU Joes become GPU Joes, or CPU Joes left the filed, and new GPU come in.

Now, to keep profit for individual miner the same, we need hardware, 100 times stronger than typical ATI GPU.

But this is impossible: supercomputers belong to large companies such as IBM, etc. not to individual average Joes.
-------------------------------------------------------------------------
Bitcoin algorithm is excellent in idea, but just is not normalized properly - for 1 000 000 miners in the field,
NOT for 1 block generation per unit time (10min)!

[rezin777]

So, 10 000 CPU average Joes become 10 000 ATI GPU average Joe, while almost zero NEW average Joes come to the field.

You have to realize this is incorrect. Look at the mining forums and see all the new posts made by new forum users asking how to mine.

[elewton]

Bitcoin has to use something to distribute the incentive.  "Satoshi" chose Hash/s, and that's pretty reasonable.  If you wanted to eliminated GPUs from the equation, you could probably write a Bitcoin clone (PersonCoin) that rewards based on an updated list of cost of resource (hash, storage, bandwidth etc.) that you believe optimised for an individual, and charge a tax for updating the list of standards.

I can't wait to see it!

[afterburner229]

You have to realize this is incorrect. Look at the mining forums and see all the new posts made by new forum users asking how to mine.

LOL))) I've asked how to mine, too!!

But watching current difficulty increase rate, and current profit decrease rate (@ time interval = FEW DAYS), both in BTC & $ (despite $/BTC rises), I NEVER ENTER.

Because, according to current politics, there is no chance to expand bitcoin society up from some 10 000 people mining & accepting boundary!

Compute, ATI GPUs made HUGE bias to HIGH difficulty, that can NOT be reached profitably for 1 000 000 Average Joes, that SHOULD be the base for bitcoin society!

Mumber of miners & acceptors will be frozen near 10 000 people boundary.

[afterburner229]

Bitcoin has to use something to distribute the incentive.  "Satoshi" chose Hash/s, and that's pretty reasonable.  If you wanted to eliminated GPUs from the equation, you could probably write a Bitcoin clone (PersonCoin) that rewards based on an updated list of cost of resource (hash, storage, bandwidth etc.) that you believe optimised for an individual, and charge a tax for updating the list of standards.

"Satoshi" chose Hash/s because he is a geek, specialist in mathematics only.

Bitcoin society needs specialists in psychology too.
Normalization by just Hash/s is WRONG. Although, it could spark, if there no ATI GPUs on the market. but they are.

If "Satoshi" were studying psychology, he normalized the algorithm, to allow 1 000 000 miners come into field, with no dependance of power of ATI GPUs.

Compare with real gold: individual gold-digger finds an instrument, that increases his individual gold mining in 100 times - from 7 Mhash/s to 700 Mhash/s - on the time interval of ONE day - time to buy ATI GPU and install phoenix-like software.

Only ONE man developed that software, say, for months & years. But ONCE the software is available for free download, each average Joe can increase his real gold mining power up to 100 times in ONE day.

Just think by head & compute numbers.

Now, I have understood, why,
difficulty is being increased on time interval FEW days! It's JUST average time for average Joe to buy ATI GPI, download free software, and start mining.

And sure, TODAY you can see that number of miners increases too. BUT, this process will continue for FEW days (weeks).

Then, mining will fall down, because of almost zero profit AND unabling to output large amounts of $.

And the bitcoin society will be frozen in some 10-20 000 (ok, let 50 000) miners & acceptors, on the time interfal FEW weeks.

This is mathematical theorem according to current difficulty algorithm!

[amincd]

If "Satoshi" were studying psychology, he normalized the algorithm, to allow 1 000 000 miners come into field, with no dependance of power of ATI GPUs.

It would not work. You can't have 50 blocks being created every hour. It causes problems for the network. The difficulty HAS to adjust to how quickly blocks are being created, in order to keep block generation at one per 10 minutes.

[afterburner229]

It would not work. You can't have 50 blocks being created every hour. It causes problems for the network. The difficulty HAS to adjust to how quickly blocks are being created, in order to keep block generation at one per 10 minutes.

If you understand psychological part of problem, technical part is not problem at all.

Bitcoin even support different versions of protocols.

I am not strong in bitcoin algorithms. So YOU may think how to make 1 000 000 miners in the field possible, with no dependance on their mining power.

Imagine, IBM were interested in bitcoin in earlier stages. Then, IBM connects all their super-computers to mining. So, Average Joe could not enter into the field even in earlier stage. In current stage, we would see IBM plus 100 individual miners.

Understand, bitcoin algorithm is VERY vulnerable, self-collapsing, and it's vulnerability does NOT lie in cryptographic plane of view.

[FreeMoney]

If "afterburner229" have better code for us to examine we will be very pleased.

[vuce]

If "Satoshi" were studying psychology, he normalized the algorithm, to allow 1 000 000 miners come into field, with no dependance of power of ATI GPUs.

It would not work. You can't have 50 blocks being created every hour. It causes problems for the network. The difficulty HAS to adjust to how quickly blocks are being created, in order to keep block generation at one per 10 minutes.

50 blocks per hour would not help. What he wants is increasing amount of coins mined per hour, eg. 50 coins/10 minutes now and 100 coins/10 minutes 14 days from now. This just can't work.

[afterburner229]

If "afterburner229" have better code for us to examine we will be very pleased.

Let me some time to think about an idea.

Consider real Gold. While we have mined 1/3 of total gold, the mass of the gold being mined per unit time, in the total world, depends on total mining power. NOT constant mass being mined per unit time:
-----------------------------------------------------------------------------
mass_per_time = k * total_mining_power, where k = const, mass of mined gold < 90%
-----------------------------------------------------------------------------
When we have mined 90% of total gold, the mass of the gold being mined per unit time starts to decrease exponentially:
-----------------------------------------------------------------------------
mass_per_time = mass_per_time (mass of mined gold = 90%) * exp (- time/1_YEAR), mass of mined gold >= 90%
-----------------------------------------------------------------------------
(don't be afraid about if we get not 100% EXACTLY - exponential function DOES make upper boundary - just re-normalize)

Look in to the history - 90% of total gold mined was reached on time interval few CENTURYs.

Of course, we apparently do not want wait for century. 90% bitcoins must be mined in 5-10 years due to world-wide political reasons & crysis. This is normalization for k = const, mentioned above.

So the new algorithm is almost ready!

[markm]

Okay, lets tailor a blockchain-based currency to address your concerns.

Mostly it seems you want to distribute coins among at least a million people before allowing an arms-war to start among them whereby they compete with each other to enrich processor manufacturers instead of each other.

How about this:

- Our AfterburnerCoin system will not recognise a coin-production transaction as valid unless it designates a specific address as beneficiary, or one of a "jury of peers" of addresses maybe.

- The institution / committee / whatever controlling that address or those addresses commits to issuing the coins to many people, no more than 21 coins per person, so that a million people are required in order for all 21 million coins to be issued.

(Or even, only 1 per person so a million people can be equipped with one when only 1/21 of the total have even been minted yet.)

-MarkM- (Or a faucet issues them, oh wait, that is already done, did you get your free faucet money yet?)

(Weird, firefox thinks faucet isn't a word, maybe I somehow have set it not to use an American dictionary?)

(If so, what is it in English? A tap, I guess?)

P.S. How to get rich quick with such a system: (1) Tell people they can get a free [something] from you simply by picking up free coin at a faucet and giving it to you in return for that [something].

[afterburner229]

Oh guys, I see you STARTED with exponetial decrease of mining mass BTC. LOL)) Do you EVER think?!

[vuce]

If "afterburner229" have better code for us to examine we will be very pleased.

Let me some time to think about an idea.

Consider real Gold. While we have mined 1/3 of total gold, the mass of the gold being mined per unit time, in the total world, depends on total mining power. NOT constant mass being mined per unit time:
-----------------------------------------------------------------------------
mass_per_time = k * total_mining_power, where k = const, mass of mined gold < 90%
-----------------------------------------------------------------------------
When we have mined 90% of total gold, the mass of the gold being mined per unit time starts to decrease exponentially:
-----------------------------------------------------------------------------
mass_per_time = mass_per_time (mass of mined gold = 90%) * exp (- time/1_YEAR), mass of mined gold >= 90%
-----------------------------------------------------------------------------
(don't be afraid about if we get not 100% EXACTLY - exponential function DOES make upper boundary - just re-normalize)

Look in to the history - 90% of total gold mined was reached on time interval few CENTURYs.

Of course, we apparently do not want wait for century. 90% bitcoins must be mined in 5-10 years due to world-wide political reasons & crysis. This is normalization for k = const, mentioned above.

So the new algorithm is almost ready!

How exactly would one get (uncompromised) total_mining_power (in a decentralized system)?

[bernd]

The most efficient miners will set the profitability, im afraid the most profitable miners right now are those who dont pay for electricity, the kids in their parents basements or at their companies or whereever no one cares. The rest of you who pay for electricity and/or maintenance will soon cease to be profitable. good thing i dont have to pay for electricity or maintenance, my mining rig is infinitely profitable right now.

[amincd]

50 blocks per hour would not help. What he wants is increasing amount of coins mined per hour, eg. 50 coins/10 minutes now and 100 coins/10 minutes 14 days from now. This just can't work.

He's saying difficulty is too high. If difficulty were lowered, there would be more blocks being created per hour.

If he wants what you describe, that also can't work. It would lead to bitcoins being almost worthless, and few people accepting them in exchange for goods/services because of their rapid inflation.

[vuce]

50 blocks per hour would not help. What he wants is increasing amount of coins mined per hour, eg. 50 coins/10 minutes now and 100 coins/10 minutes 14 days from now. This just can't work.

He's saying difficulty is too high. If difficulty were lowered, there would be more blocks being created per hour.

If he wants what you describe, that also can't work. It would lead to bitcoins being almost worthless, and few people accepting them in exchange for goods/services because of their rapid inflation.

fair enough... either fixed amount of btc per block and variable block generation times, or the other way around.

[afterburner229]

Mostly it seems you want to distribute coins among at least a million people before allowing an arms-war to start among them whereby they compete with each other to enrich processor manufacturers instead of each other.

How about this:

- Our AfterburnerCoin system will not recognise a coin-production transaction as valid unless it designates a specific address as beneficiary, or one of a "jury of peers" of addresses maybe.

- The institution / committee / whatever controlling that address or those addresses commits to issuing the coins to many people, no more than 21 coins per person, so that a million people are required in order for all 21 million coins to be issued.

No, it is another great mistake - to arbitrary distribute coins among at least a million people before allowing an arms-war to start among them.

We need 1 000 000 people of high quality & IQ, each:
- can invest his OWN money to ATI-GPU miner, some $1000
- can install mining software on it
- can support mining uptime close to 99% per unit time for YEARS
- can become a permanent peer, when mining will be unprofitable

[stic.man]

so you don't want average joe involved with BTC?

[afterburner229]

How exactly would one get (uncompromised) total_mining_power (in a decentralized system)?

For now, How does difficulty know about total_mining_power, to auto-adjust for 1 block generation per 10 min?
I suggest, current decentralized algorithm CAN estimate current total_mining_power.

[afterburner229]

He's saying difficulty is too high. If difficulty were lowered, there would be more blocks being created per hour.

I say, we need completely re-normalize current mining (BTC-mass/per unit time) algorithm by two functions - linear increasing one (while less than 90% gold-BTC has been mined) and exponetial decreasing one (when more than 90% gold-BTC will be mined).

[Basiley]

so you don't want average joe involved with BTC?

just hope he don't plan to kill anyone knowing about BTC.
/duck & hide.

[markm]

When bitcoins are worth only a mere US$10 each, happening to win a block would be a win of US$500.

If you actually *invest*, long term, as you seem to plan to have your million high-IQ people do, instead of living rig-to-new-hardware selling off your bitcoins instead of sitting on them until they go up to at least ten times the value they had when you actually mined them, then yes you might see mining as unprofitable, because by being so short-sighted you will be competing with all kinds of wannabe-get-rich-quick people who are trying to make a quick profit in only a year or few instead of looking at it as a long term business and bearing in mind that typically long term businesses need at least a couple of years to break even (and then benefit from the huge percent of their competitors who dropped out before even lasting a couple of years in the biz).

If you figure it is a long term good investment, you surely ought to be figuring the coins you mine will be worth at least ten times as much within oh gosh maybe less than a decade even than when you initially mined them.

So if you do happen to luck into a block when it is only worth US$500, you will be thinking oh cool, that is at least US$5000 in my mind as I don't expect to sell it until it *is* worth at least that...

Most competitors will be thinking shorter term, and maybe running equipment they intend to burn out in only a few years instead of running gear optimised to last a decade or two. (Maybe heating units for the winter and solar units for summer, heat pump engines recycling heat, industrial 24/7 chips instead of gamer chips intended to be used flat out only a few hours a day, and so on.)

Thinking of high IQ long term investors burning out units not intended for flat out 24/7 use seems a little oxymoronic. Can you run ten times as many units at one tenth duty cycle or one tenth power or something and make them last more than ten times as long or something? Or just build units with 24/7 duty cycle in mind from the chip-design up? Or *something* more intelligent than abusing consumer low duty cycle hardware?

(How about your million smart people each put a dollar or few toward a specially designed chipset and a datacentre to put it in, forming a mining corporation they each buy into?)

-MarkM-

[afterburner229]

The most efficient miners will set the profitability, im afraid the most profitable miners right now are those who dont pay for electricity, the kids in their parents basements or at their companies or whereever no one cares. The rest of you who pay for electricity and/or maintenance will soon cease to be profitable. good thing i dont have to pay for electricity or maintenance, my mining rig is infinitely profitable right now.

Picture you describe will take place in FEW weeks, with current algorithm. So only the pilferers of electricity power will be frofitable in FEW weeks. Now there are some 10 000 miners, how much pilferers will remain? 1 000 ?!

LOL. "secure currency" being mined by .. 1000 pilferers world-wide.))))

People, wake up!

[vuce]

Now there are some 10 000 miners, how much pilferers will remain? 1 000 ?!

Why would the number of miners decrease? I guess when equilibrium is reached difficulty would be at least what is now - therefore at least as many miners as there are now.

[markm]

Actually, if the price of coins does go down so low compared to difficulty than only people who get "free" electricity can "profit" by mining, that will probably *increase* the number of small scale miners, because having to pilfer probably cuts down the average amount of electricity used. There might be some people who can pilfer enough electricity for ten years straight to run a significant number of rigs but but there are probably more people who could, if it were profitable to do so, buy enough electricity for ten years straight to run a significant number of rigs.

So quite likely if mining is "unprofitable" for anyone who pays for electricity the ratio of small miners to large miners will change in favour of small miners, which could well increase the chance of getting a million small miners with minimum competition from large miners...

-MarkM-

[afterburner229]

When bitcoins are worth only a mere US$10 each, happening to win a block would be a win of US$500.

If you actually *invest*, long term, as you seem to plan to have your million high-IQ people do, instead of living rig-to-new-hardware

-- SKIPPED

Can you run ten times as many units at one tenth duty cycle or one tenth power or something and make them last more than ten times as long or something? Or just build units with 24/7 duty cycle in mind from the chip-design up? Or *something* more intelligent than abusing consumer low duty cycle hardware?

(How about your million smart people each put a dollar or few toward a specially designed chipset and a datacentre to put it in, forming a mining corporation they each buy into?)

-MarkM-

Oh Mark, you are dreaming in clouds! You think by RIGHT way, but 10 000 people in bitcoin society is NOT the basis for your thinking! At least 1 000 000 people IS basis.

I know about Official FPGA miner just released

http://forum.bitcoin.org/index.php?topic=9047.0

This is NOT the way because there is no reason to trust in 10 000-people bitcoin society. FPGA is UFO that costs over $500! And you can not buy it in arbitrary computer store in arbitrary country in arbitrary amount..

First we need 1 000 000 miners with ATI-GPU for mining duration of few years, THEN we will think about FPGA..

[afterburner229]

Now there are some 10 000 miners, how much pilferers will remain? 1 000 ?!

Why would the number of miners decrease? I guess when equilibrium is reached difficulty would be at least what is now - therefore at least as many miners as there are now.

Of course, number of miners will not decrease - it just will be frozen @ constant = some 10 000 people, while mining hardware is working (for some years).

but this freeze is Bitcoin society COLLAPSE. 10 000 frozen people DO compromise the IDEA of world-wide currency.

[afterburner229]

Actually, if the price of coins does go down so low compared to difficulty than only people who get "free" electricity can "profit" by ming, that will probably *increase* the number of small scale miners, because having to pilfer probably cuts down the average amount of electricity used. There might be some people who can pilfer enough electricity for ten years straight to run a significant number of rigs but but there are probably more people who could, if it were profitable to do so, buy enough electricity for ten years straight to run a significant number of rigs.

So quite likely if mining is "unprofitable" for anyone who pays for electricity the ratio of small miners to large miners will change in favour of small miners, which could well increase the chance of getting a million small miners with minimum competition from large miners...

-MarkM-

Now, you, Full member, are compromising bitcoin currency idea in REAL TIME, because you does accept, that small pilfer miners will become LARGE percentage of total miners (maybe more than 50% - till 1 000 000 miners).

Bitcoin will base upon PILFERS??!!!!!!

Change algorithm right NOW! You know the way = linear rising function (< 90% BTC mined) & exponetially decreasing one (> 90% BTC mined).

[markm]

Oh Mark, you are dreaming in clouds! You think by RIGHT way, but 10 000 people in bitcoin society is NOT the basis for your thinking! At least 1 000 000 people IS basis.

I know about Official FPGA miner just released

http://forum.bitcoin.org/index.php?topic=9047.0

This is NOT the way because there is no reason to trust in 10 000-people bitcoin society. FPGA is UFO that costs over $500! And you can not buy it in arbitrary computer store in arbitrary country in arbitrary amount..

First we need 1 000 000 miners with ATI-GPU for mining duration of few years, THEN we will think about FPGA..

Look on the bright side: your failure to take advantage of the current opportunity in mining is one less GPU others have to compete against, so by refusing to mine you are helping make mining more profitable for others who are less short-sighted and bigoted (against communities of less than a million people) than you are.

So thank you for doing your part in that way.

Furthermore if this FUD you are trolling here turns anyone else off of mining that again helps those who do grab the bull market by the horns to profit so maybe even that is a good contribution in a backhanded kind of way.

-MarkM-

[barbarousrelic]

Thank you, afterburner229. Your objections will be noted in our log.

[afterburner229]

Look on the bright side: your failure to take advantage of the current opportunity in mining is one less GPU others have to compete against, so by refusing to mine you are helping make mining more profitable for others who are less short-sihted and bigoted (against communities of less than a million people) than you are.

So thank you for doing your part in that way.

Furthermore if this FUD you are trolling here turns anyone else off of mining that again helps those who do grab the bull market by the horns to profit so maybe even that is a good contribution in a backhanded kind of way.

-MarkM-

You speak absolutely right things, but this is just admission of guilt, that you are not more than SMALL PYRAMID gamer. And bitcoin system is SMALL PYRAMID BY DESIGN TO STAY SMALL, TO ALLOW YOU (10 000 people) OUTPUT YOUR MONEY FROM THE GAME IN GOOD MOMENT, FEW weeks LATER.

Thanks!

[barbarousrelic]

If Bitcoin succeeds, yes, that means that people who got in early will profit. This is true. The same principle applied with Microsoft and Google. It is not indicative of fraud or wrongdoing on anyone's part. 

[FooDSt4mP]

If Bitcoin succeeds, yes, that means that people who got in early will profit. This is true. The same principle applied with Microsoft and Google. It is not indicative of fraud or wrongdoing on anyone's part. 

+1 there is very little reward without risk, and early adopters took the risks required to grow bitcoin to the point we're at today

[kjj]

And the reward, so far, is negligible.

Seriously guys, stop feeding the trolls.  5 pages of this nonsense is enough.  Everything has been said, and he's ignored it all.

[afterburner229]

If Bitcoin succeeds, yes, that means that people who got in early will profit. This is true. The same principle applied with Microsoft and Google. It is not indicative of fraud or wrongdoing on anyone's part. 

Of course, but I have prooven, it will not succeed, but will be frozen @ some 10 000 miners & acceptors, due to current difficulty algorithm.

Then you, premium members, admit your fault, that if Bitcoin succeeds, just pilferers of zero-cost electricity will remain in basis of bitcoin.

Whether my proof is completely correct, or not, there is STRONGLY NO WAY to trust in Bitcoin.

Bitcoin has been compromised.

[afterburner229]

+1 there is very little reward without risk, and early adopters took the risks required to grow bitcoin to the point we're at today

What risk did you have?! Risk to run open-source mining software upon your own CPU, then ATI GPU?! You are computer-gamers so you had already have GPU for gaming.

LOL))

Seriosly: What do u know about risks, in real life, guys?!

[stic.man]

[BitterTea]

afterburner is either a troll, or too hopelessly ignorant to ever understand economics.

This is just my humble opinion of course...

[Garrett Burgwardt]

+1 there is very little reward without risk, and early adopters took the risks required to grow bitcoin to the point we're at today

What risk did you have?! Risk to run open-source mining software upon your own CPU, then ATI GPU?! You are computer-gamers so you had already have GPU for gaming.

LOL))

Seriosly: What do u know about risks, in real life, guys?!

To waste time and electricity. Additionally, not anywhere near everyone here is a gamer.

[Insti]

Surely there are LESS than 10,000 people who can create new USD.
Does that make it not a secure currency?

[Anders]

Too small? How many users did Facebook have in the beginning?

Check this out:



Whoa. That looks really interesting to me. Sure, the Bitcoin concept may pancake, but it may very well continue on the exponential growth we see in the Alexa graph.

[Clipse]

Afterburner make it easy on yourself and understand one simple thing, bitcoin != mining, the mining aspect is just a extra way to make something out of bitcoins atm.

You can do the following:

Bitcoinmining = Clearly not for you, you find way to many "_PROVEN ALGORITHMIC_" problems with it.
bitcoin buy/sell trading = mtgox.com , figure out or speculate when to buy and when to sell, you save on miningrig costs.
bitcoin general trading = setup a store / figure out business plan / make money from trading services for Bitcoins, be creative.


Your way of thinking about bitcoins is exactly that of someone who thought hes going to win big walking into a casino and then suddenly realised there is a constant house edge and lost all his money then acting all bitter as if he deserved to become rich over night.

if anything youve proven that bitcoin is not a get rich overnight scheme and like any business requires hardwork(in most cases) to come out ahead a winner.

[FooDSt4mP]

+1 there is very little reward without risk, and early adopters took the risks required to grow bitcoin to the point we're at today

What risk did you have?! Risk to run open-source mining software upon your own CPU, then ATI GPU?! You are computer-gamers so you had already have GPU for gaming.

LOL))

Seriosly: What do u know about risks, in real life, guys?!

I got in too late for CPU mining to be effective, and my GPU was crap for mining, so I invested USD.  It was very risky, but happened to turn out well.  I know a lot about risks and risk management, in real life.  I barely game, and haven't played anything in several months.  I prefer outdoor leisure activities.  You have a lot of preconceptions that are just plain wrong, and it's obvious you are too hardheaded to accept you just might not know everything.  As far as I'm concerned, you're just a cocky kid who's jealous he didn't get involved sooner.  I was pretty cocky too when I was younger (and I still am sometimes), so trust me when I say you're just embarrassing yourself, but you won't realize it until your arrogance gets knocked down a notch.

[afterburner229]

afterburner is either a troll, or too hopelessly ignorant to ever understand economics.

This is just my humble opinion of course...

If I am a troll why do you, Hero Member, still feed me?!
I am newbie, NOBODY.

You does 'feed' me because you know about this problem.
And you are interested to fail me, because you are the gamer on the bitcoin field. I am not.

You are interested in good reputation of bitcoin in eyes of newbies to attract them to pyramid.
You do attract newbies to BYE & SELL, i.e. to PLAY on exchange, NOT to mine.

Because you, 10 000 people, want to be PEERS when mining will be unprofitable.
So you want to control the whole bitcoin system - no matter you are NOT single person, but like
a parliament consists of 10 000 people.

----

Read all the branch again pedantically - some premium members have been accepted that the difficulty problem does exist.

[afterburner229]

Surely there are LESS than 10,000 people who can create new USD.
Does that make it not a secure currency?

No it does not. I think SHA-256 & 100 miners are sufficient for security.
I say if number of miners will be frozen @ 10 000, number of bitcoin acceptors will be frozen at roughly the same boundary world-wide.

So I can do bitcoin-to-bitcoin transactions absolutely secure, but I can not BYE & SELL for bitcoin, in practical life.

[afterburner229]

Afterburner make it easy on yourself and understand one simple thing, bitcoin != mining, the mining aspect is just a extra way to make something out of bitcoins atm.

Anders, Clipse, you are newbies, but premium members did confirm that problem I mentioned does exist.
They simply have their own interests in pyramid game.

Of course, I can exactly TODAY bye bitcoins and, EXACTLY a WEEK later, to sell.
And I will have almost 100% guarantie of profit.

BUT THIS IS THE PYRAMID GAME.
 

[barbarousrelic]

Of course, I can exactly TODAY bye bitcoins and, EXACTLY a WEEK later, to sell.
And I will have almost 100% guarantie of profit.

BUT THIS IS THE PYRAMID GAME.
 

The fact that something increases in value does not make it fraudulent, and it does not make it a pyramid scheme or a Ponzi scheme.

Also, you do not have 100% guarantee of profit buying this week and selling next week.

[afterburner229]

I got in too late for CPU mining to be effective, and my GPU was crap for mining, so I invested USD.  It was very risky, but happened to turn out well.  I know a lot about risks and risk management, in real life.  I barely game, and haven't played anything in several months.  I prefer outdoor leisure activities.  You have a lot of preconceptions that are just plain wrong, and it's obvious you are too hardheaded to accept you just might not know everything.  As far as I'm concerned, you're just a cocky kid who's jealous he didn't get involved sooner.  I was pretty cocky too when I was younger (and I still am sometimes), so trust me when I say you're just embarrassing yourself, but you won't realize it until your arrogance gets knocked down a notch.

Oh I see you decide to troll out me, being a fat troll myself? Very nice.)))
Let us both LOL))
---------------------------------
No, switch to business. And read thread again - I recognized PUBLICALLY I do ENVY to first 10 000 miners.

My emothions is one thing. But the difficulty problem is another.

WOW! Difficulty prognosis updated:
---------------------------------
Estimated   405913 in 597 blks
----------------------------------
http://bitcoincharts.com/markets/

YESTERDAY it was some 360000 in some 1100 blks.
YESTERDAY.

I CAN NOT buy the ATI 5850x2 pair and start to mine SO QUICKLY. PHYSICALLY.

[afterburner229]

The fact that something increases in value does not make it fraudulent, and it does not make it a pyramid scheme or a Ponzi scheme.

Also, you do not have 100% guarantee of profit buying this week and selling next week.

Let us stop. Second circle?

something increases exponetially, and EVEN on the constant field, this is the HUGE problem.

what about pyramid, it is just criterium of your honestness: are you also GAMER interested, with opinion biased.

If you read me pedantically you see, my schema with attraction of 1 000 000 mining people is pyramid itself till 90% of bitcoins will be mined.

If you still do not understand why my pyramid is honest, and your one is wrong, you did not simply read my posts pedantically.

hint: I introduced TWO functions - linear increase till 90% BTC mined & exponential decrease after 90% BTC mined.

 

[error]

This idiot is still at it?

[BitterTea]

afterburner, it comes down the fact that if you don't like Bitcoin you are free to start your own version of the block chain with your own rules. You're not going to change the existing Bitcoin, so just accept it.

[FooDSt4mP]

Oh I see you decide to troll out me, being a fat troll myself? Very nice.)))
Let us both LOL))

I have no idea what you are trying to say here.

Regarding difficulty, I see no problem... The economy is growing at a reasonable pace.  Higher difficulty results in a more secure network.  Higher difficulty is bad for miners, but good for the overall economy.

[afterburner229]

Regarding difficulty, I see no problem... The economy is growing at a reasonable pace.  Higher difficulty results in a more secure network.  Higher difficulty is bad for miners, but good for the overall economy.

Let us stop at this point.
An economy with 10 000 frozen members world-wide is not the economy at all.

Only time will judge us. FEW weeks.

[Anders]

Afterburner make it easy on yourself and understand one simple thing, bitcoin != mining, the mining aspect is just a extra way to make something out of bitcoins atm.

Anders, Clipse, you are newbies, but premium members did confirm that problem I mentioned does exist.
They simply have their own interests in pyramid game.

Of course, I can exactly TODAY bye bitcoins and, EXACTLY a WEEK later, to sell.
And I will have almost 100% guarantie of profit.

BUT THIS IS THE PYRAMID GAME.
 

It may be similar to a pyramid scheme in that those who join early will have the opportunity to make the biggest profit. But in a pyramid scheme, those who join early will continuously receive money from the lower part of the pyramid, whereas in Bitcoin there is no guarantee that the early adopters will get anything at all! Because if the system crashes, then even the those who joined early will lose unless they have managed to sell their bitcoins before the crash. So Bitcoin is more like investing in a growing company. Like investing in Facebook or Google when they were small companies. Or like investing in similar startups that went bankrupt. So there is a risk involved in the Bitcoin system in contrast to a pyramid scheme, plus the most important thing is perhaps that a pyramid scheme is just a fraudulent system leading to a certain crash while the Bitcoin system is something that builds to a potentially very useful monetary system with immense intrinsic social and real value.

[afterburner229]

It may be similar to a pyramid scheme in that those who join early will have the opportunity to make the biggest profit. But in a pyramid scheme, those who join early will continuously receive money from the lower part of the pyramid, whereas in Bitcoin there is no guarantee that the early adopters will get anything at all! Because if the system crashes, then even the those who joined early will lose unless they have managed to sell their bitcoins before the crash. So Bitcoin is more like investing in a growing company. Like investing in Facebook or Google when they were small companies. Or like investing in similar startups that went bankrupt. So there is a risk involved in the Bitcoin system in contrast to a pyramid scheme, plus the most important thing is perhaps that a pyramid scheme is just a fraudulent system leading to a certain crash while the Bitcoin system is something that builds to a potentially very useful monetary system with immense intrinsic social and real value.

I agree with you that bitcoin is not a pyramid by pedantic economical definition. I even trust in honestness of bitcoin software developers and earlier adopters.

I disappoint you by two things:

1. I've detected that current adopters - 'premium' members - are NOT sincere persons.
2. bitcoin society is prooven to crash independently on WHETHER current adopters ARE sincere or NOT.

[Anders]

I agree with you that bitcoin is not a pyramid by pedantic economical definition. I even trust in honestness of bitcoin software developers and earlier adopters.

I disappoint you by two things:

1. I've detected that current adopters - 'premium' members - are NOT sincere persons.
2. bitcoin society is prooven to crash independently on WHETHER current adopters ARE sincere or NOT.

Ok, I don't know if bitcoin will crash or not. Maybe you are right. I know too little about it at the moment (I became aware of bitcoin today!  ).

It will be a real test for the bitcoin system the coming months. For the system to survive and become strong it must be able to handle all kinds of dishonest persons and mischief.

[afterburner229]

DIFFICULTY ALGORITHM IS BLACK HOLE.

May be, even with current exponent BUT with another coefficient, bitcoin were survive, if some 1 000 000 miners & acceptors could enter the game field.

Sad, if bitcoin society will decay @ 10 000 frozen adopters, staying absolutely secure from cryptographic point of view,
 due to one incorrect coefficient in difficulty algorithm.

[LMGTFY]

DIFFICULTY ALGORITHM IS BLACK HOLE.

May be, even with current exponent BUT with another coefficient, bitcoin were survive, if some 1 000 000 miners & acceptors could enter the game field.

Sad, if bitcoin society will decay @ 10 000 frozen adopters, staying absolutely secure from cryptographic point of view,
 due to one incorrect coefficient in difficulty algorithm.

To spare me having to wade through this entire thread (I've been reading it piecemeal since it started, so I've probably missed a lot of it) could someone explain this "10,000 frozen" idea?

[afterburner229]

To spare me having to wade through this entire thread (I've been reading it piecemeal since it started, so I've probably missed a lot of it) could someone explain this "10,000 frozen" idea?

I recommend you read pedantically the whole thread. I hope still, I am wrong for a miracle, and bitcoin society will survive.

Don't worry about time spent in reading: just observe how difficulty increases in time @
http://bitcoincharts.com/markets/

[LMGTFY]

To spare me having to wade through this entire thread (I've been reading it piecemeal since it started, so I've probably missed a lot of it) could someone explain this "10,000 frozen" idea?

I recommend you read pedantically the whole thread. I hope still, I am wrong for a miracle, and bitcoin society will survive.

Don't worry about time spent in reading: just observe how difficulty increases in time @
http://bitcoincharts.com/markets/

I'm familiar with how difficulty has increased over time, thanks (I generated my first block on a 4-core CPU over 5 days, when difficulty was something like 8000). I'm looking for a quick summary explaining where this "10,000 frozen" concept comes from: if the price of that knowledge is having to read the entire thread then I'll pass.

[elewton]

Afternurner has !000% proven it in MATHEMATICL FORMULAS, LMGTFY!!

THe moon is turning constantly, but you DON NOT understand human psychologia.  That is why you will FAIL...

[FooDSt4mP]

Afternurner has !000% proven it in MATHEMATICL FORMULAS, LMGTFY!!

THe moon is turning constantly, but you DON NOT understand human psychologia.  That is why you will FAIL...

ARG BARG FLO GARG!

[BitterTea]

Afterburner is Bitcoin's Harold Camping.

[kjj]

To spare me having to wade through this entire thread (I've been reading it piecemeal since it started, so I've probably missed a lot of it) could someone explain this "10,000 frozen" idea?

I recommend you read pedantically the whole thread. I hope still, I am wrong for a miracle, and bitcoin society will survive.

Don't worry about time spent in reading: just observe how difficulty increases in time @
http://bitcoincharts.com/markets/

I'm familiar with how difficulty has increased over time, thanks (I generated my first block on a 4-core CPU over 5 days, when difficulty was something like 8000). I'm looking for a quick summary explaining where this "10,000 frozen" concept comes from: if the price of that knowledge is having to read the entire thread then I'll pass.

I'll save you the pain.

This guy equates mining = bitcoin in his head.  The notion that people might use it without mining is alien to him.  About a dozen people have tried to set him right, but we've all failed.

Because he missed the goldrush and is unable to mine profitably, no one will ever use bitcoin ever again, and the 10,000 users that got in early are all that there will ever be.

[afterburner229]

I'm familiar with how difficulty has increased over time, thanks (I generated my first block on a 4-core CPU over 5 days, when difficulty was something like 8000). I'm looking for a quick summary explaining where this "10,000 frozen" concept comes from: if the price of that knowledge is having to read the entire thread then I'll pass.

In current (too small) bitcoin society, number of miners roughly equal to number of acceptors, the persons who buy & sell for bitcoin & do BTC/$ exchange. It is a *psychological* law for the small society, number of miners ~ number of adopters, because bitcoin's UFO-like nature for 'average Joe'.

See, Difficulty was some 240000 FEW days ago, and will be some 440000 FEW days later.

Because bitcoin society is too small, I, being 'average Joe', do not trust in it: not because it is cryptographically insecure, but because I doubt in guarantee to easily buy & sell & exchange for BTC world-wide. Now it is something possible but TOO tricky and risky.

But, the cryptographic idea of bitcoin is very nice, so I being 'average Joe', want to join and risk.

But, because I do not trust in terms of sell-buy, I decide to risk as miner: to buy a computer with ATI 5850x2 GPU to start mining. Or even I have this computer with one ATI 5950 as typical computer-gamer. I want switch it for mining in my free nights.

So, FEW days ago I DECIDED to risk and mine. There are not abstract FEW days - they counted from TODAY, 25 may, 2011! Counter is ticking NOW and HERE.

Then, I wake up FEW days later (because I was walking, dancing, drinking etc) and DISCOVER, if I start to mine FEW days later, I lost HUGH amount of profit. If I start to mine (FEW+1) days later, I lost HUGE*2^1 amount of profit. If I start to mine (FEW+2) days later, I lost HUGE*2^2 amount of profit. etc.

This is ROUGH estimate, of course - but this is sufficient.

I DISCOVER EVEN I DID start mining YESTERDAY I have 99.99% possibility that my computer-miner will NOT be compensated by profit at all!

Important, that difficulty-doubling interval is FEW days now, not FEW years or even FEW months.

So I REJECT this CRAZY idea to mine.

I still can risk to play with BTC/$ on exchange, within time interval of few days. BUT As in casino, or Russian roulette.

But I never start buy or sell or exchange for BTC the real goods and dollars in SERIOUS business, because I DO NOT trust that too small bitcoin society allow me to easily input or output real dollars or real gold.

So I REJECT enter the bitcoin society as acceptor TOO.

I being 'average Joe' DOES REJECT bitcoin currency idea at all.

You, 10 000 miners & adopters stay isolated, but 10000 people spread world-wide can-not make solid economy, due to unable of diversification of goods being sell or bought by BTC, neither guarantie for real dollar/gold to easily input/output from TINY needle's eye of some 10 000 members of bitcoin society.

So, 10 000 CURRENT members of bitcoin society will be isolated, rejected by the rest of world -- 'frozen', and start decay quickly.

I have introduced new difficulty algorith's normalization formula, to allow some 1 000 000 - 10 000 000 people world-wide to join bitcoin society as miners, BEFORE considering this society as economics with easy buy/sell/exchange.

----

Then, some premium members call me THE 'idiot'.

[vuce]

Sorry, but why is mining that much different than buying coins? You pay either way, there is no free money. I really don't get why average people would prefer mining to buying that badly.

[kjj]

I'm familiar with how difficulty has increased over time, thanks (I generated my first block on a 4-core CPU over 5 days, when difficulty was something like 8000). I'm looking for a quick summary explaining where this "10,000 frozen" concept comes from: if the price of that knowledge is having to read the entire thread then I'll pass.

In current (too small) bitcoin society, number of miners roughly equal to number of acceptors, the persons who buy & sell for bitcoin & do BTC/$ exchange. It is a *psychological* law for the small society, number of miners ~ number of adopters, because bitcoin's UFO-like nature for 'average Joe'.

NO.  This is not true.

This f*cking thread has gone on and on because you can't imagine yourself using bitcoins unless you get free coins from mining, and then you project your own personal failings onto the rest of the world.

Let me say it one last time:  NOT EVERYONE IS LIKE YOU.

[afterburner229]

Sorry, but why is mining that much different than buying coins? You pay either way, there is no free money.

I described, why does not you read me pedantically? buying coins is too risky, like Russian roulette.
If I am desperado man, I can risk and play on BTC exchange.

But with mining, I have the power gaming computer, I can sell it, if bitcoin mining fails!
Or I may simply switch to use this computer simply as computer!

10 000 people, you do not neither think, nor count numbers, nor read when you ask me to write

[edd]

Afterburner's argument seems to be that since the minig difficulty has increased, it is no longer profitable and the "average Joe" won't accept Bitcoin because he can't make money off of it.

Afterburner229, Bitcoin is meant to be an alternative currency, not a means to profit from mining (that just happened to be a pleasant side effect for early adopters). If the "average Joe" won't use it because he can't understand its benefits, it's not up to us to pay him to use it.

[vuce]

Sorry, but why is mining that much different than buying coins? You pay either way, there is no free money.

I described, why does not you read me pedantically? buying coins is too risky, like Russian roulette.
If I am desperado man, I can risk and play on BTC exchange.

But with mining, I have the power gaming computer, I can sell it, if bitcoin mining fails!
Or I may simply switch to use this computer simply as computer!

10 000 people, you do not neither think, nor count numbers, nor read when you ask me to write

but you can't get the electricity you spent back, therefore you're still paying for mined coins.

[JA37]

Although I don't agree fully with afterburner I can see what he's saying.
Why should anyone invest in bitcoin in the first place? The risk is astronomical. Your investment makes the early adopters rich (not me). You have no stake in it.
I wouldn't throw a dollar into bitcoin at this time, but I have managed to mine about half a block before it became too difficult so I'll keep those and follow the development with interest. New users don't get that chance. They get told to throw money "our" way and hope for the best.
And while there are services and goods that you can buy for bitcoins, it's nowhere near as useful as regular money.

If they can't mine and get a taste for it, then most will just leave it be. I know I would.

[afterburner229]

Let me say it one last time:  NOT EVERYONE IS LIKE YOU.

TRUE.

but count mumbers: 6 000 000 000 Earth citizen minus 10 000 bitcoin society members ARE LIKE ME, 'average Joe'.
The rest 10 000  bitcoin society members spread world-wide, ARE LIKE YOU.

WHY do you RAGE just because I advice to increase number of miners in the game from 10 000 to 1 000 000?

you CAN normalize mining profit to be VERY small, BUT roughly CONSTANT in time interval FEW years, or half a year, to allow 1 000 000 members to join the bitcoin society.

BUT you does close the society. I know WHY.
 

[BitterTea]

Let me say it one last time:  NOT EVERYONE IS LIKE YOU.

TRUE.

but count mumbers: 6 000 000 000 Earth citizen minus 10 000 bitcoin society members ARE LIKE ME, 'average Joe'.
The rest 10 000  bitcoin society members spread world-wide, ARE LIKE YOU.

WHY do you RAGE just because I advice to increase number of miners in the game from 10 000 to 1 000 000?

you CAN normalize mining profit to be VERY small, BUT roughly CONSTANT in time interval FEW years, or half a year, to allow 1 000 000 members to join the bitcoin society.

BUT you does close the society. I know WHY.

If you don't like Bitcoin, start your own currency.

How many times must I say this?

[vuce]

If they can't mine and get a taste for it, then most will just leave it be. I know I would.

but obviously a lot more have accepted bitcoin, that's why mining is not profitable anymore. You can't just let people mine (cheaply) indefinitely with growth like that, inflation would be astronomical. (that's the way i see it, but i might be dead wrong here)

[afterburner229]

Afterburner229, Bitcoin is meant to be an alternative currency, not a means to profit from mining (that just happened to be a pleasant side effect for early adopters). If the "average Joe" won't use it because he can't understand its benefits, it's not up to us to pay him to use it.

I know Bitcoin is meant to be, I just proove WHY bitcoin society will decay too soon.

[rezin777]

BUT you does close the society. I know WHY.
 

But you are wrong. The difficulty changes will make mining profitable for only the most efficient miners. If the exchange rate stays the same, the difficulty will increase until mining is only profitable to those who do it the best.

What you want is mining to be profitable to everyone for a very long time! That's insane and impossible to sustain.

Don't you understand, that if mining were allowed to be so easy, and the rate of new coin introduction was always going up, the price of Bitcoin would go down, defeating the whole point you are trying to achieve in the first place!

No one is going to buy something that is super easy to get. So no one is going to want to mine that junk. Damn dude...

[afterburner229]

If you don't like Bitcoin, start your own currency.

How many times must I say this?

If you read pedantically,

http://forum.bitcoin.org/index.php?topic=9487.msg139923#msg139923

some premium person ask me to explain 'frozen people' concept.

[amincd]

Quote from: amincd on Today at 11:54:29 am
He's saying difficulty is too high. If difficulty were lowered, there would be more blocks being created per hour.

I say, we need completely re-normalize current mining (BTC-mass/per unit time) algorithm by two functions - linear increasing one (while less than 90% gold-BTC has been mined) and exponetial decreasing one (when more than 90% gold-BTC will be mined).

That won't change any thing. The dedicated miners will still get the majority of them, and the majority of people who use bitcoins will not want to invest the time it takes to get into mining.

[afterburner229]

But you are wrong. The difficulty changes will make mining profitable for only the most efficient miners. If the exchange rate stays the same, the difficulty will increase until mining is only profitable to those who do it the best.

What you want is mining to be profitable to everyone for a very long time! That's insane and impossible to sustain.

Don't you understand, that if mining were allowed to be so easy, and the rate of new coin introduction was always going up, the price of Bitcoin would go down, defeating the whole point you are trying to achieve in the first place!

No one is going to buy something that is super easy to get. So no one is going to want to mine that junk. Damn dude...

BECAUSE NO ONE PERSON READS ME PEDANTICALLY, THIS IS MY LAST POST.

JUST WAIT FEW WEEKS TO OBSERVE THE START OF BITCOIN DECAY AND FEW MONTHS TILL 2012 TO OBSERVE THE END OF DECAY.

BYE.

[BitterTea]

BECAUSE NO ONE PERSON READS ME PEDANTICALLY, THIS IS MY LAST POST.

JUST WAIT FEW WEEKS TO OBSERVE THE START OF BITCOIN DECAY AND FEW MONTHS TILL 2012 TO OBSERVE THE END OF DECAY.

BYE.

Sigh... you want us to read your posts "overly concerned with formal rules and trivial points of learning"? Because that's what "pedantic" means...

[kjj]

Let me say it one last time:  NOT EVERYONE IS LIKE YOU.

TRUE.

but count mumbers: 6 000 000 000 Earth citizen minus 10 000 bitcoin society members ARE LIKE ME, 'average Joe'.
The rest 10 000  bitcoin society members spread world-wide, ARE LIKE YOU.

WHY do you RAGE just because I advice to increase number of miners in the game from 10 000 to 1 000 000?

you CAN normalize mining profit to be VERY small, BUT roughly CONSTANT in time interval FEW years, or half a year, to allow 1 000 000 members to join the bitcoin society.

BUT you does close the society. I know WHY.

Heh.  I've got like 4 BTC to my name, and I earn about another 0.5 per day mining (for now).  I missed the goldrush too, but I'm not all butthurt about it like you are.

[stic.man]

i don't know fuck all about mining and rigs but i bought a handful of coins and probably paid a lot less than what a rig setup costs and now i'm happily in the game and have zero interest in mining whatsoever.  I'm average Joe to a T

[mestar]

AND FEW MONTHS TILL 2012 TO OBSERVE THE END OF DECAY.

Ok, guys, I think he finally got the point.  And he predicts that 2012 will be a good year for bitcoin.

[BitterTea]

Something else I just realized...

If you're willing to spend, say $1000 on mining hardware, assuming that in the worst case scenario you will be able to recoup $800, you can also just buy $200 worth of bitcoin with a similar risk.

[wb3]

i don't know fuck all about mining and rigs but i bought a handful of coins and probably paid a lot less than what a rig setup costs and now i'm happily in the game and have zero interest in mining whatsoever.  I'm average Joe to a T

Every once in a while turn on Generating for an hour, and see if you win the lottery, also

[stic.man]

i have a garbage computer, wouldn't be worth slowing me down

[Clipse]

Afterburner make it easy on yourself and understand one simple thing, bitcoin != mining, the mining aspect is just a extra way to make something out of bitcoins atm.

Anders, Clipse, you are newbies, but premium members did confirm that problem I mentioned does exist.
They simply have their own interests in pyramid game.

Of course, I can exactly TODAY bye bitcoins and, EXACTLY a WEEK later, to sell.
And I will have almost 100% guarantie of profit.

BUT THIS IS THE PYRAMID GAME.
  

Afterburner, if your knowledge about economics is as sound as your grasp for english, I absolutely understand why you are so negative over subjects concerning bitcoins.

Also, I write this message to you PEDANTICLY. aaight!

[afterburner229]

http://bitcoincharts.com/markets/mtgoxUSD.html

========================

Difficulty   434883
Estimated   872663 in 2003 blks
Network total   6.867 Thash/s (WAS 4.8 Thash/s FEW DAYS AGO)

mtgox trade volume (average) = const for 1.6 months (does NOT rise)

========================

Do you still believe, number of miners (living PEOPLE) rised in proportion, from 4.8 Thash/s to 6.867 Thash/s in FEW days, i.e. multiplicator of 1.5 times in FEW days?!

Do you still believe, number of mtgox & other exchange's players (living PEOPLE) rised duing last 1.6 months?!

========================

It seems like CIA made an evil joke - remember 'INECPTION' movie with Leonardo DiCaprio.
Like CIA did embed the Bitcoin idea, being so nice from cryptographic point of view.
BUT with WRONG constant set, affecting difficulty algorithm.

[BitterTea]

The calculation on BitcoinCharts is inaccurate soon after a difficulty increase. That's because the hash rate and estimated difficulty are calculated based on the rate of block generation since the last increase. Since only 19 blocks have been found at the new difficulty, the sample size is very small and leads to an inaccurate calculation.

Sorry to burst your bubble.

[afterburner229]

The calculation on BitcoinCharts is inaccurate soon after a difficulty increase. That's because the hash rate and estimated difficulty are calculated based on the rate of block generation since the last increase. Since only 19 blocks have been found at the new difficulty, the sample size is very small and leads to an inaccurate calculation.

LOL)) I studied mathematical statictics in Moscow State University. Of course,
"Since only 19 blocks have been found at the new difficulty, the sample size is very small and leads to an inaccurate calculation"

But DID you compute EXACT numbers, some like 'std. deviation' (note, std. deviation itself can not be applied in this case),
HOW MUCH is calculation innacurate?
LOL. LOL. LOL))

19 blocks from 2000 is sufficient for rough estimates in THIS extrapolation case. Since extrapolation unlike interpolation, is rough by it's mathematical nature. Also, in the all recent difficulty switches, difficulty was risen by almost exactly TWICE factor. It was confirmed AFTER each switch had been made.

1. See, next difficulty estimation (even based on 19 blocks from 2000) is also nearly TWICE the (new) current difficulty, as it was nearly TWICE in the all recent difficulty switches.

2. Also, observing trade volume levels on mtgox during 1.6 months is sufficient for rough estimes, that number of exchange's traders (living people) is ALREADY FROZEN for 1.6 months.

======================
We need to reject all thinking, but to focus upon NUMBER of living PEOPLE as function of TIME, being ATTRACTED to bitcoin SOCIETY.
This is THE ONLY parameter, that bitcoin survival depends on.

[LMGTFY]

The calculation on BitcoinCharts is inaccurate soon after a difficulty increase. That's because the hash rate and estimated difficulty are calculated based on the rate of block generation since the last increase. Since only 19 blocks have been found at the new difficulty, the sample size is very small and leads to an inaccurate calculation.

LOL)) I studied mathematical statictics in Moscow State University. Of course,
"Since only 19 blocks have been found at the new difficulty, the sample size is very small and leads to an inaccurate calculation"

But DID you compute EXACT numbers, some like 'std. deviation' (note, std. deviation itself can not be applied in this case),
HOW MUCH is calculation innacurate?
LOL. LOL. LOL))

19 blocks from 2000 is sufficient for rough estimates in THIS extrapolation case. Since extrapolation unlike interpolation, is rough by it's mathematical nature. Also, in the all recent difficulty switches, difficulty was risen by almost exactly TWICE factor. It was confirmed AFTER each switch had been made.

1. See, next difficulty estimation (even based on 19 blocks from 2000) is also nearly TWICE the (new) current difficulty, as it was nearly TWICE in the all recent difficulty switches.

2. Also, observing trade volume levels on mtgox during 1.6 months is sufficient for rough estimes, that number of exchange's traders (living people) is ALREADY FROZEN for 1.6 months.

======================
We need to reject all thinking, but to focus upon NUMBER of living PEOPLE as function of TIME, being ATTRACTED to bitcoin SOCIETY.
This is THE ONLY parameter, that bitcoin survival depends on.

This graph should give you a clearer idea as to what the current network hashrate really is. 19 blocks might be enough for you or me, but bitcoinwatch always loses the plot after a difficulty change. This is well documented here on this forum - every time the difficulty changes someone posts to ask why the network hashrate has apparently skyrocketed, and someone patiently explains that this is what always happens, and in a few blocks time the difficulty estimate will settle down.

[afterburner229]

This graph should give you a clearer idea as to what the current network hashrate really is. 19 blocks might be enough for you or me, but bitcoinwatch always loses the plot after a difficulty change. This is well documented here on this forum - every time the difficulty changes someone posts to ask why the network hashrate has apparently skyrocketed, and someone patiently explains that this is what always happens, and in a few blocks time the difficulty estimate will settle down.

I see you CAN hypnotize newbies, cunning fox. LOL))

Let us reject difficulty from the view completely. Watch the another graph from the same site:

http://bitcoin.sipa.be/speed.png

This graph has EXPONENTIAL axis 0Y, so exponetial growing function itself will be LINEAR on this graph.
We see the power of bitcoin network, in GHash/s is:
1. nearly linear slice @ time period Oct 2010 - Dec 2010
2. EXPONENTIAL slice @ period Dec 2010 - Mar 2011
3. second EXPONENTIAL slice @ period Mar 2011 - Jun 2011

I.e. what we see since roughly April, 20, 2011 - EXPONENTIAL GROW IN EXPONETIAL AXIS!
What is it?!
GHash/s (t) = EXP ( EXP (t))
?!

Hint: One person has Core i7 computer with integrated GPU and 7 MHash/s, then he observes, difficulty is skyrocketing, and he buys ATI 5870x2 or 5970 GPU, and his hash rate skyrockets from 7 up to 700MHash/s. His mining power increases in 100 times in ONE day, but he stay the same ONE mining person.

==================

Let's research another function - number of people (miners & traders) being attracted into bitcoin society - as function of time.
Current difficulty algorithm can not allow the number of people attracted to grow exponentially, but this is required for survival on earlier stages of society developing. 10000 members spread world-wide is not the society for the currency. and I proof, they frozen without growing.

[stic.man]

You think the trade volume not rising has more to do with the ten fold increase in BTC price maybe?

[LMGTFY]

This graph should give you a clearer idea as to what the current network hashrate really is. 19 blocks might be enough for you or me, but bitcoinwatch always loses the plot after a difficulty change. This is well documented here on this forum - every time the difficulty changes someone posts to ask why the network hashrate has apparently skyrocketed, and someone patiently explains that this is what always happens, and in a few blocks time the difficulty estimate will settle down.

I see you CAN hypnotize newbies, cunning fox. LOL))

Let us reject difficulty from the view completely. Watch the another graph from the same site:

http://bitcoin.sipa.be/speed.png

This graph has EXPONENTIAL axis 0Y, so exponetial growing function itself will be LINEAR on this graph.
We see the power of bitcoin network, in GHash/s is:
1. nearly linear slice @ time period Oct 2010 - Dec 2010
2. EXPONENTIAL slice @ period Dec 2010 - Mar 2011
3. second EXPONENTIAL slice @ period Mar 2011 - Jun 2011

I.e. what we see since roughly April, 20, 2011 - EXPONENTIAL GROW IN EXPONETIAL AXIS!
What is it?!
GHash/s (t) = EXP ( EXP (t))
?!

Hint: One person has Core i7 computer with integrated GPU and 7 MHash/s, then he observes, difficulty is skyrocketing, and he buys ATI 5870x2 or 5970 GPU, and his hash rate skyrockets from 7 up to 700MHash/s. His mining power increases in 100 times in ONE day, but he stay the same ONE mining person.

==================

Let's research another function - number of people (miners & traders) being attracted into bitcoin society - as function of time.
Current difficulty algorithm can not allow the number of people attracted to grow exponentially, but this is required for survival on earlier stages of society developing. 10000 members spread world-wide is not the society for the currency. and I proof, they frozen without growing.

I'm having great difficulty understanding you, but if I understand you correctly you're suggesting that the number of miners and traders is static, and that network hashrate is increasing only because miners are trading in their CPUs for GPUs, and then buying more and more GPUs. Is that correct?

[FreeMoney]

But you are wrong. The difficulty changes will make mining profitable for only the most efficient miners. If the exchange rate stays the same, the difficulty will increase until mining is only profitable to those who do it the best.

What you want is mining to be profitable to everyone for a very long time! That's insane and impossible to sustain.

Don't you understand, that if mining were allowed to be so easy, and the rate of new coin introduction was always going up, the price of Bitcoin would go down, defeating the whole point you are trying to achieve in the first place!

No one is going to buy something that is super easy to get. So no one is going to want to mine that junk. Damn dude...

BECAUSE NO ONE PERSON READS ME PEDANTICALLY, THIS IS MY LAST POST.

JUST WAIT FEW WEEKS TO OBSERVE THE START OF BITCOIN DECAY AND FEW MONTHS TILL 2012 TO OBSERVE THE END OF DECAY.

BYE.

At least honor your word man. How can we believe anything you say now? (No need to answer)

[afterburner229]

I'm having great difficulty understanding you, but if I understand you correctly you're suggesting that the number of miners and traders is static, and that network hashrate is increasing only because miners are trading in their CPUs for GPUs, and then buying more and more GPUs. Is that correct?

Very very roughly, this is correct. Sure you can say 'I know many people who had started to mine or to trade in last few months'.

Focus on the exact things what I say:
1. THE EXPONENTIAL GROW in NUMBER OF MEMBERS (in time scale) IS REQUIRED FOR ANY SOCIETY TO SURVIVE IN THE EARLIER STAGES OF IT's DEVELOPING.
2. 10 000 MINERS & TRADERS SPREAD WORLD-WIDE IS NOT THE SOCIETY FOR THE CURRENCY.
3. CURRENT DIFFICULTY ALGORITHM DOES NOT ALLOW FOR NUMBER OF MEMBERS TO GROW EXPONENTIALLY.
4. WE OBSERVE substituted data (network power = exp ( exp (t)), average mtgox trade volume = const (t~1.6months)), that freezing process has been already started.
5. In this DANGER situation we MUST RESEARCH the function = number of real (living) people in bitcoin society (t) more accurately.
6. According that research results, We should be ready to change DIFFICULTY ALGORITHM.

[rezin777]

mtgox trade volume (average) = const for 1.6 months (does NOT rise)

Look at the volume in dollars, not Bitcoins.

[rezin777]

I'm having great difficulty understanding you, but if I understand you correctly you're suggesting that the number of miners and traders is static, and that network hashrate is increasing only because miners are trading in their CPUs for GPUs, and then buying more and more GPUs. Is that correct?

Apparently they are buying Bitcoins from themselves as well.

[Anonymous]

I havent mined for months since cpu mining was unprofitable. That's not the point of bitcoin...

Mining is the least interesting thing you can do with them.

[afterburner229]

At least honor your word man. How can we believe anything you say now? (No need to answer)

I may be wrong.. and therefore I ask you not to believe me but TO VERIFY MY COMPUTATIONS.
Just to RESEARCH the number of bitcoin members as the function of time.

If you compromise the bitcoin currency by your inaction, you compromise ANY unanonymized distributed digital currency, in eyes of rest of the world.

[LMGTFY]

I'm having great difficulty understanding you, but if I understand you correctly you're suggesting that the number of miners and traders is static, and that network hashrate is increasing only because miners are trading in their CPUs for GPUs, and then buying more and more GPUs. Is that correct?

Very very roughly, this is correct. Sure you can say 'I know many people who had started to mine or to trade in last few months'.

No, I would say that I simply don't believe it's possible for the network growth to have come from "upgrades". When I started mining - in October 2010 - everyone used their CPU. GPU mining was just beginning to be discussed - it was semi-mythical. Check the forum posts from around that time, there was an idea GPU mining was do-able but if anyone was doing it they were in a tiny minority. Now consider everyone online at that time trading in their CPU miner for, lets say, 4 5970s. Let's take a conservative estimate for CPU mining, say 1 Mhash/s. 4 x 5970 would give us 2800 Mhash/s. So, if the number of miners stayed constant we'd see network hashrate increase 2800 times. Now look at the graph. Now consider that many miners simply haven't got 4 x 5970s. I haven't. I have 1 x 5870. You can see many posts here from people with 5850s etc. Some people may even still be using CPU miners.

Focus on the exact things what I say:
1. THE EXPONENTIAL GROW in NUMBER OF MEMBERS (in time scale) IS REQUIRED FOR ANY SOCIETY TO SURVIVE IN THE EARLIER STAGES OF IT's DEVELOPING.

OK...

2. 10 000 MINERS & TRADERS SPREAD WORLD-WIDE IS NOT THE SOCIETY FOR THE CURRENCY.

Possibly not, but I have no idea how you've arrived at this 10,000 figure. I could probably roughly determine the number of miners online, but I can't think of any way to count the number of traders.

3. CURRENT DIFFICULTY ALGORITHM DOES NOT ALLOW FOR NUMBER OF MEMBERS TO GROW EXPONENTIALLY.

Why not? Difficulty has been growing exponentially since I started mining, and I'm pretty certain that that hasn't been solely due to miners trading in CPUs for multi-GPU set-ups. Just from the number of posters on this forum I can see that new miners are starting constantly. Just a few weeks ago posters here were arguing that "now" (i.e. a few weeks ago) was the ideal time to invets in mining hardware, and profits were all but guaranteed (I was arguing that they should exercise caution).

4. WE OBSERVE substituted data (network power = exp ( exp (t)), average mtgox trade volume = const (t~1.6months)), that freezing process has been already started.

MtGox is not the only exchange. I used to use MtGox a lot; I haven't used it nearly as much recently because (a) I now have a local exchange which is far more convenient, and (b) even prior to that I'd started using bitcoin-otc because it was more convenient for me to work in my local currency. (Incidentally, can someone point me to the raw data that supports this constant trade volume claim? Thanks!)

5. In this DANGER situation we MUST RESEARCH the function = number of real (living) people in bitcoin society (t) more accurately.

Agreed. I think your 10,000 figure is a wild guess, and I dispute your theory that it is roughly static.

6. According that research results, We should be ready to change DIFFICULTY ALGORITHM.

Maybe. If the research backs up your theories then we could start thinking about solutions at that point.

[kjj]

Focus on the exact things what I say:
1. THE EXPONENTIAL GROW in NUMBER OF MEMBERS (in time scale) IS REQUIRED FOR ANY SOCIETY TO SURVIVE IN THE EARLIER STAGES OF IT's DEVELOPING.
2. 10 000 MINERS & TRADERS SPREAD WORLD-WIDE IS NOT THE SOCIETY FOR THE CURRENCY.
3. CURRENT DIFFICULTY ALGORITHM DOES NOT ALLOW FOR NUMBER OF MEMBERS TO GROW EXPONENTIALLY.
4. WE OBSERVE substituted data (network power = exp ( exp (t)), average mtgox trade volume = const (t~1.6months)), that freezing process has been already started.
5. In this DANGER situation we MUST RESEARCH the function = number of real (living) people in bitcoin society (t) more accurately.
6. According that research results, We should be ready to change DIFFICULTY ALGORITHM.

This is just as wrong now as it was when you said it the first 30 times.

The current difficulty system does indeed allow everyone to participate.  And I do mean everyone.

How many more times are you going to whine that you learned about bitcoin too late to get a ton of free coins?

[afterburner229]

Look at the volume in dollars, not Bitcoins.

SEVERE MISTAKE! You introduce the NEW THING, LOOK at the volume of NEW THING.
The volume of NEW THING MUST be great, for NEW THING to be THE CURRENCY.

And remember, number of traders depending on time is MORE important even than volume of NEW THING itself.
What if 10 000 traders sell/buy BTC each other, and volume of this process is 99% of total BTC volume.
And 100 000 newbies sell/buy BTC, in 1% volume. This is TYPICAL DANGER situation.

[dissipate]

Someone correct me if I am wrong (I have not read this entire thread), but the fallacy here is that AfterBurner is equating the size of the Bitcoin 'society' with the size of the Bitcoin mining 'society'. Bitcoin mining will from here on out always be a niche enterprise within the Bitcoin 'society', dominated by those with the time and expertise to compete for mined Bitcoins. Everyone else is a speculator, entrepreneur, or trader. The number of people using Bitcoin outside of mining will be a much larger and limitless number of people. Hence, the total size of the Bitcoin 'society' is potentially many times larger than the size of the Bitcoin mining 'society'. I don't see a problem here.

[afterburner229]

LMGTFY,

I see you are on the right way. Just remember you must start the algorithm change BEFORE all BTC exchanges start to fall.
I recommed you to verify my computations on people-time dependence in FEW days.

Now, it is night in Moscow. I go to sleep.. bye for a while..

[kjj]

Someone correct me if I am wrong (I have not read this entire thread), but the fallacy here is that AfterBurner is equating the size of the Bitcoin 'society' with the size of the Bitcoin mining 'society'. Bitcoin mining will from here on out always be a niche enterprise within the Bitcoin 'society', dominated by those with the time and expertise to compete for mined Bitcoins. Everyone else is a speculator, entrepreneur, or trader. The number of people using Bitcoin outside of mining will be a much larger and limitless number of people. Hence, the total size of the Bitcoin 'society' is potentially many times larger than the size of the Bitcoin mining 'society'. I don't see a problem here.

That is the charitable interpretation, yes.  See my other posts in this thread for less polite theories.

[stic.man]

Still trying to understand this arbitrary 10,000 number's origins and how someone can ignore the media/forum spikes to assert that the userbase is static

[bitcoinBull]

Look at the volume in dollars, not Bitcoins.

SEVERE MISTAKE! You introduce the NEW THING, LOOK at the volume of NEW THING.
The volume of NEW THING MUST be great, for NEW THING to be THE CURRENCY.

And remember, number of traders depending on time is MORE important even than volume of NEW THING itself.
What if 10 000 traders sell/buy BTC each other, and volume of this process is 99% of total BTC volume.
And 100 000 newbies sell/buy BTC, in 1% volume. This is TYPICAL DANGER situation.

Volume in dollars.

The growth occurs in volume of dollars, not volume of bitcoin.  The volume of bitcoin can only grow linearly.  So the volume of dollars is what grows exponentially.

[da2ce7]

afterburner229 is a troll...

Gotta' troll the obvious troll. 

[gongcheng]

The most important thing for bitcoin to survive is to make more people believe in this system.

Right now, it is too difficult for new guys to get some bitcoins (either by trade or by mining).

[markm]

The most important thing for bitcoin to survive is to make more people believe in this system.

Right now, it is too difficult for new guys to get some bitcoins (either by trade or by mining).

That is kind of an amusing contrast when set against other claims that it is too easy to simply start another currency using Bitcoin code and co-operate with / compete with the original Bitcoins.

If original bitcoins keep going up in value like they have been, pretty soon it will cost you less than a bitcoin for a whole new 21 million coins of your very own, named whatever you want to name them up to trademark / servicemark type law limitations, or even more than 21 million if you prefer your currency to have more than 21 million available to circulate.

So don't moan about not being able to grab millions of coins dirt cheap, go ahead and grab some of any or all of the types that still are dirt cheap and if they too are not cheap enough for you simply start your own that you can sell as cheap as you think such things ought to be.

Play your cards - or your Freeciv Galactic Milieu nation - right and you might find you have at least as many buyers right off the bat as there are Freeciv Galactic Milieu nations that have already started their own currency, and at least as many buyers eventually as there are nations supported by the Freeciv software (hint: it supports quite a few already and the number keeps growing...)

-MarkM-

[LMGTFY]

Right now, it is too difficult for new guys to get some bitcoins (either by trade or by mining).

I think this is more of an education issue than a practical issue. Mining is easy enough, and there are plenty of people right here who will help new miners get started. More importantly, perhaps, buying and selling bitcoins is easy - but people get hung up on MtGox. bitcoin-otc and Ubitex are both relatively straightforward (I've used bitcoin-otc, haven't used Ubitex so I may be wrong here...) and the exchange I use the most these days, britcoin, is very easy to use - no Liberty Reserve, Dwolla or anything else, I simply use my existing bank account. I appreciate not every country/currency has a britcoin, but everyone, anywhere, can use bitcoin-otc. If you live in a country with a lot of people you're bound to find someone wanting to trade sooner or later.

[LMGTFY]

Look at the volume in dollars, not Bitcoins.

SEVERE MISTAKE! You introduce the NEW THING, LOOK at the volume of NEW THING.
The volume of NEW THING MUST be great, for NEW THING to be THE CURRENCY.

And remember, number of traders depending on time is MORE important even than volume of NEW THING itself.
What if 10 000 traders sell/buy BTC each other, and volume of this process is 99% of total BTC volume.
And 100 000 newbies sell/buy BTC, in 1% volume. This is TYPICAL DANGER situation.

Volume in dollars.

The growth occurs in volume of dollars, not volume of bitcoin.  The volume of bitcoin can only grow linearly.  So the volume of dollars is what grows exponentially.

What bitcoinBull said. The supply of new bitcoins is relatively static - roughly 50 every ten minutes. Expecting exponential growth of bitcoin supply is just wrong. A "SEVERE MISTAKE!", even.

Incidentally, afterburner229, could you knock it off with the ALL-CAPS? You can use *stars* for emphasis, or use the formatting tools or format your text manually, like this:

Code:

[b]This is bold[/b]

-> This is bold

Code:

[i]This is italicised[/i]

-> This is italicised
Better yet, allow the quality of your arguments to persuade, rather than the CAPITALS or formatting.

[afterburner229]

What bitcoinBull said. The supply of new bitcoins is relatively static - roughly 50 every ten minutes. Expecting exponential growth of bitcoin supply is just wrong. A "SEVERE MISTAKE!", even.

I speak about total volume of BTC being traded on all BTC exchanges world-wide, per day. Also you can study the number of different goods' kinds, being traded for BTC directly (just T-shirts & coffee caps & etc??).

But remember, computing BTC trade volume, or number of goods' kinds, sell for BTC, is not the goal itself. To estimate the number of miners & number of traders, as function of time is THE goal.

Of course, to estimate number of miners & traders is not trivial. Possible hints are given by number of exchanges being opened, per unit time. Or number of NEW kind of goods being selled *directly* for BTC, per unit time, weighted by their trade volumes in BTC.

MtGox being the largest exchange, may indicate the things quite accurately. So if I see average trade volume of BTC upon MtGox is not increasing exponentially (or ever increasing) for 1.6 months, it is good indicator of danger.

So, answer me:
- how many traders there are on all BTC exchanges world-wide, as graph/function of time?
- how many miners there are on all BTC pools (&singles) world-wide, as graph/function of time?
- how many goods (kinds of goods, volumes of goods) sell directly for BTC world-wide, as graph/function of time?

As soon as you compute these 3 functions/graphs, you see the confirmation, that current difficulty algorithm kills bitcoin society.

[LMGTFY]

What bitcoinBull said. The supply of new bitcoins is relatively static - roughly 50 every ten minutes. Expecting exponential growth of bitcoin supply is just wrong. A "SEVERE MISTAKE!", even.

I speak about total volume of BTC being traded on all BTC exchanges world-wide, per day. Also you can study the number of different goods' kinds, being traded for BTC directly (just T-shirts & coffee caps & etc??).

But remember, computing BTC trade volume, or number of goods' kinds, sell for BTC, is not the goal itself. To estimate the number of miners & number of traders, as function of time is THE goal.

Of course, to estimate number of miners & traders is not trivial. Possible hints are given by number of exchanges being opened, per unit time. Or number of NEW kind of goods being selled *directly* for BTC, per unit time, weighted by their trade volumes in BTC.

MtGox being the largest exchange, may indicate the things quite accurately. So if I see average trade volume of BTC upon MtGox is not increasing exponentially (or ever increasing) for 1.6 months, it is good indicator of danger.

So, answer me:
- how many traders there are on all BTC exchanges world-wide, as graph/function of time?
- how many miners there are on all BTC pools (&singles) world-wide, as graph/function of time?
- how many goods (kinds of goods, volumes of goods) sell directly for BTC world-wide, as graph/function of time?

As soon as you compute these 3 functions/graphs, you see the confirmation, that current difficulty algorithm kills bitcoin society.

No. You're the one coming up with wild theories. You need to back them up with hard data, not ask people who disagree with you to do your research for you. It's time for you to "put up or shut up". Let's see your data, the data you used to arrive at your hypothesis.

[molecular]

2. 10 000 MINERS & TRADERS SPREAD WORLD-WIDE IS NOT THE SOCIETY FOR THE CURRENCY.
3. CURRENT DIFFICULTY ALGORITHM DOES NOT ALLOW FOR NUMBER OF MEMBERS TO GROW EXPONENTIALLY.

If by MEMBER, you mean mining operator, that might be true.

But: did everyone mine gold from a gold-mine back in the gold-rush days, or only 10.000 people?

How many people *use(d)* gold? More than 10.000? Yes!

Also: of course people can still get into mining business: use a pool, you'll get your fair share, just as the old miners.

[afterburner229]

No. You're the one coming up with wild theories. You need to back them up with hard data, not ask people who disagree with you to do your research for you. It's time for you to "put up or shut up". Let's see your data, the data you used to arrive at your hypothesis.

Gold words. Now I see your are honest person in your deep thinking. I will try to do that. So I will not speak abouth this theme for some days..
-----------------
You may consider another problem - mining pools.

There is no formal 'cryptographic-trust' relationship between miner and pool. So pool's admin can manipulate with profits, powers, etc. But, because the difficulty is skyrocketing, single person can not mine effectively. So, pool's admins become the aces of bitcoin society. Now we can see 3-4 large pools. Their aces may make a cartel deal.

You see, pool's admins becomes the global corporations, exactly what we want to avoid in bitcoin system. So bitcoin currency is centolized even now, in earlier stages. With current difficulty algorithm (& bitcoin communication protocol) there is no chance to de-centrolize bitcoin in such thinking.

p.s. also, single miner may wait for *weeks* to generate a block. he can not see *continuous* (but small) profit grow, being single.

[LMGTFY]

No. You're the one coming up with wild theories. You need to back them up with hard data, not ask people who disagree with you to do your research for you. It's time for you to "put up or shut up". Let's see your data, the data you used to arrive at your hypothesis.

Gold words. Now I see your are honest person in your deep thinking. I will try to do that. So I will not speak abouth this theme for some days..
-----------------
You may consider another problem - mining pools.

There is no formal 'cryptographic-trust' relationship between miner and pool. So pool's admin can manipulate with profits, powers, etc. But, because the difficulty is skyrocketing, single person can not mine effectively. So, pool's admins become the aces of bitcoin society. Now we can see 3-4 large pools. Their aces may make a cartel deal.

You see, pool's admins becomes the global corporations, exactly what we want to avoid in bitcoin system. So bitcoin currency is centolized even now, in earlier stages. With current difficulty algorithm (& bitcoin communication protocol) there is no chance to de-centrolize bitcoin in such thinking.

Again, no. I'm not wasting my time considering things on your behalf. You have a theory? Then come up with data to support it, and bring it all here together. Otherwise you're just wasting our time. Your latest theory, by the way, is not exactly new. It's been debated ad nauseum elsewhere on this forum.

p.s. also, single miner may wait for *weeks* to generate a block. he can not see *continuous* (but small) profit grow, being single.

[markm]

All else being equal, what kind of curve does your valuation based on difficulty follow?

For example if all buy/sell/trade interfaces for blockchain-based currencies all accepted any such currency, but at different exchange rates, what kind of relation would you expect, or possibly even code if coding artificial intelligence market-maker bots, between difficulty and value?

Or if considering multiple currencies confuses the issue too much, how much value would how much change in difficulty change your personal valuation of how much a bitcoin is worth to you?

The "you" herein is intended generally to each reader.

Possibly some readers do not particularly care whether difficulty is high or low, only whether technical indicators seem to be predicting a rise or fall in the price of the coins?

But because I have seen many comments indicating that any blockchain running at less difficulty than whatever difficulty bitcoin happens to be running at any given moment in time is relatively worthless compared to the higher difficulty blockchain (at least if the higher difficulty one happens to be the original bitcoins' blockchain) I am interested in clarifing numerically that "relatively" relation. Is it a simply direct ratio? Or exponential? Asyptotic at some point? Or what?

How important would difficulty be if it turned out that the original bitcoin was the one running at lower difficulty? How much value would bitcoins lose in your personal valuation at what ratio of lower difficulty that an other or many other blockchain(s)?

Do those who believe prices will reach some kind of equilibrium near the cost of mining them believe whichever blockchain comes closest to that equilibrium would on that basis seem to them a better buy, having a more realistic, in their system of valuation, price?

-MarkM-

[afterburner229]

Some mothematical model of miners is READY!

First, look @
http://bitcoin.sipa.be/speed.png

Consider latest 2.5 months, we can see an exponential-like 'loop' in exponential axis 0Y:
a 'loop' (ROUGHLY) starts @ Mar 15, 2011 (700 000 Mhash/s), ends @ May 30, 2011 (3 500 000 MHash/s).

Note, there is also previous 'loop' of the same 'form' on the graph @ Dec 15 2010 - Feb 28 2011 (note, the same 2.5 months duration)

The latest 'loop' can be represented as a formula:

total_power (t, days, in MHash/s) = 250*(3162 + 2.5*10^ (0.0466*t)),
where
3162 - CONSTANT number of miners @ period Mar 15, 2011 - May 30, 2011 (our 'famous' ~ 10 000 miners)
250 MHash/s - typical power of GPU of single miner before upgrade @ Mar 15, 2011
250*2.5=625 MHash/s - typical power of GPU of single miner  after upgrade @ May 30, 2011, where we observe a tiny 'fall' of total power
(note, compare with Mar 05 2011)
0.0466 - is norm koefficient, that all miners has upgraded their GPU till May 30, 2011, from 250 MHash/s to 625 MHash/s

I assume all miners observe how does total power increases with time. They are 'race participants'. And becouse they did not understand MY bitcoin society's crash theorem, they want to obtain max. profit, so they were forced to upgrade their GPU and continue 'racing'.

So, miners' 'total intelligence' is a classic system with positive feedback.

See the MODEL graph plotted:

Code:

http://www.wolframalpha.com/input/?i=plot+log_10+%28250*%283162+%2B+2.5*10^+%280.0466*t%29%29%29+t+from+0+to+100

total_power (0 = Mar 15, 201) = 794328 MHash/s (log_10 = 5.9)
total_power (75 days = May 30, 2011) = 3162227 MHash/s (log_10 = 6.5)

compare with data ACTUALLY observed:
total_power (0 = Mar 15, 201) = 700000 Mhash/s
total_power (75 days = May 30, 2011) = 3500000 MHash/s.

ALMOST 90% MATCH.

==================

If the number of miners were growing exponentially itself, we PRIMARILY observe LINEAR curve in the exponetial axis (0Y).

In fact, since Dec 15 2010, @

http://bitcoin.sipa.be/speed.png

WE DO NOT observe any growing LINEAR behaviour (in exponetial axis).

So number of miners = 3162 = const (t), since Mar 15, 2011 by evidence, and (may be) since Dec 15 2010 too.

If you still interested in, I may compute & model the Dec 15 2010 - Feb 28 2011 period too.

[FreeMoney]

You've convinced me, I'm switching back to SETI.

Wait actually I don't have any equipment because mining is a specialized task that I don't need to concern myself with because I don't have a comparative advantage there.

[wb3]

Ah, SETI is offline due to funding. 

[Scottingham]

I don't mine either.  Why mine when you can offer a service to the Bitcoin community?

http://forum.bitcoin.org/index.php?topic=8565.msg124597#msg124597

Vinyl for bitcoins!

~Scottingham

[afterburner229]

You've convinced me, I'm switching back to SETI.

Wait actually I don't have any equipment because mining is a specialized task that I don't need to concern myself with because I don't have a comparative advantage there.

About SETI @ Home,

With over 5.2 million participants worldwide, the project is the distributed computing project with the most participants to date. The original intent of SETI@home was to utilize 50,000-100,000 home computers.[10] Since its launch on May 17, 1999, the project has logged over two million years of aggregate computing time. On September 26, 2001, SETI@home had performed a total of 1021 floating point operations. It is acknowledged by the Guinness World Records as the largest computation in history.[16] With over 278,832 active computers in the system (2.4 million total) in 234 countries, as of November 14, 2009, SETI@home has the ability to compute over 769 teraFLOPS.[17] For comparison, the Cray Jaguar, which as of 26 September 2009 was the world's fastest supercomputer, achieved 1759 teraFLOPS.

http://en.wikipedia.org/wiki/SETI@home#Statistics

Bitcoin society does provide the money profit to participants, but is too small and frozen by difficulty algorithm, int its childhood.

SETI @ Home does not provide anything - it spends electricity only - and see: "It is acknowledged by the Guinness World Records as the largest computation in history".

----
Actual data on total number of BTC Exchanges' participants - *coming soon*. There is very pessimistic light too, as with total number of miners (~3000).

[afterburner229]

I don't mine either.  Why mine when you can offer a service to the Bitcoin community?

http://forum.bitcoin.org/index.php?topic=8565.msg124597#msg124597

Vinyl for bitcoins!

~Scottingham

Great enthusiasm!

But 99.9% of people can not distinguish an mp3 @ 320 kbits/s quality from CDDA quality. For many genres of music, mp3 with such a rate is even more perfect than CDDA, because of mp3's psychoacoustics algorithm.

Young people do not accept vynil records, they simply go to youtube, itunes, vkontakte.ru, etc. So vynil records are rarities with volume, confirmed by few thousands 'old-men' world-wide.

What kind of service can you offer to young people, directly via BTC?

[vuce]

But 99.9% of people can not distinguish an mp3 @ 320 kbits/s quality from CDDA quality. For many genres of music, mp3 with such a rate is even more perfect than CDDA, because of mp3's psychoacoustics algorithm.

ah, not this bs again...

Young people do not accept vynil records, they simply go to youtube, itunes, vkontakte.ru, etc. So vynil records are rarities with volume, confirmed by few thousands 'old-men' world-wide.

you would be surprised how many kids listen to vynil.

[stic.man]

actually at this stage of the game why would anyone ever buy a cd when they can  own some awesome vinyl and just burn/rip a cd?

Of course this only works for people actually willing to buy music.

And buying an album that is worthwhile in it's entirety which is a whole 'nother issue these days

[afterburner229]

Guys, it was just a psychological test. Why all of you do focus upon "vinyl vs. mp3" theme?
Why you do not focus on "bitcoin society vs. seti@home society growing rate"?

It is the kind of your thinking process: you focus on unrelevant themes, because they are more saturated emotionally. Vinil is a fetish itself, I know. Why we do not speak about girls? LOL))

Let's focus upon the main problem. Learn, how to control your thinking process from blur.

[kjj]

Guys, it was just a psychological test. Why all of you do focus upon "vinyl vs. mp3" theme?
Why you do not focus on "bitcoin society vs. seti@home society growing rate"?

It is the kind of your thinking process: you focus on unrelevant themes, because they are more saturated emotionally. Vinil is a fetish itself, I know. Why we do not speak about girls? LOL))

Let's focus upon the main problem. Learn, how to control your thinking process from blur.

I'm starting to think that this whole thread is a psychological test.

[stic.man]

Guys, it was just a psychological test. Why all of you do focus upon "vinyl vs. mp3" theme?
Why you do not focus on "bitcoin society vs. seti@home society growing rate"?

It is the kind of your thinking process: you focus on unrelevant themes, because they are more saturated emotionally. Vinil is a fetish itself, I know. Why we do not speak about girls? LOL))

Let's focus upon the main problem. Learn, how to control your thinking process from blur.

it's more pertinent than the arguments you've been putting forth in this thread

[afterburner229]

it's more pertinent than the arguments you've been putting forth in this thread

"The truth stings your eyes".

SETI @ home society was growing exponetially up to Guiness Records Book, ONLY because
- SETI @ home 'difficulty algorithm' is of small constant CPU power consumption and
- fundamental psychological idea - 'to find brothers by intellingence'.

[BitterTea]

Afterburner, I suggest you start your own block chain with your superior ruleset. I'm sure everyone will see how awesome it is and drop Bitcoin like a hot bowl of semen!

[afterburner229]

Afterburner, I suggest you start your own block chain with your superior ruleset. I'm sure everyone will see how awesome it is and drop Bitcoin like a hot bowl of semen!

Unfortunately, bitcoin has other severe design damages. It's code should be completely rewritten from scratch, preferably in Haskell programming language. Because bitcoin algorithms has business with huge amount of money, they must be formally verified, like seL4 microkernel.

So, that is HUGE amount of work, I can not do it myself alone. I may just write 'boundary' design conditions:

- mining amount of BTC, per unit time, should be proportional to CPU/GPU power, but in degree LESS than 1, till 90% BTC will be mined, algorithm must prohibit any parallelisation like ATI GPU does with current bitcoin algorithm

- distributed system should reject any possibility to group miners or peers in pools by design: they should be completely independent forever

- mining difficulty should be normalized to attract at least 1 000 000 miners world-wide, being on-line each day, on average

- transaction propagation should work in 'soft' real time conditions: we must guaranty that ANY transaction should be completed in 10 minutes, without paying fee, and if fee is 1% of transaction volume, we must guaranty that ANY transaction should be completed in 10 seconds

- if client wish, he could able to get possibility to de-anonymize, and to attract third-party that can roll back a transaction, if second-party is unhonest

[kjj]

Afterburner, I suggest you start your own block chain with your superior ruleset. I'm sure everyone will see how awesome it is and drop Bitcoin like a hot bowl of semen!

Unfortunately, bitcoin has other severe design damages. It's code should be completely rewritten from scratch, preferably in Haskell programming language. Because bitcoin algorithms has business with huge amount of money, they must be formally verified, like seL4 microkernel.

So, that is HUGE amount of work, I can not do it myself alone. I may just write 'boundary' design conditions:

- mining amount of BTC, per unit time, should be proportional to CPU/GPU power, but in degree LESS than 1, till 90% BTC will be mined, algorithm must prohibit any parallelisation like ATI GPU does with current bitcoin algorithm

- distributed system should reject any possibility to group miners or peers in pools by design: they should be completely independent forever

- mining difficulty should be normalized to attract at least 1 000 000 miners world-wide, being on-line each day, on average

- transaction propagation should work in 'soft' real time conditions: we must guaranty that ANY transaction should be completed in 10 minutes, without paying fee, and if fee is 1% of transaction volume, we must guaranty that ANY transaction should be completed in 10 seconds

- if client wish, he could able to get possibility to de-anonymize, and to attract third-party that can roll back a transaction, if second-party is unhonest

Awesome!

Please, please, please, please don't post here again until you are done writing it and have formal verification and proof of correctness in triplicate.

[molecular]

Afterburner, I suggest you start your own block chain with your superior ruleset. I'm sure everyone will see how awesome it is and drop Bitcoin like a hot bowl of semen!

Unfortunately, bitcoin has other severe design damages. It's code should be completely rewritten from scratch, preferably in Haskell programming language. Because bitcoin algorithms has business with huge amount of money, they must be formally verified, like seL4 microkernel.

So, that is HUGE amount of work, I can not do it myself alone. I may just write 'boundary' design conditions:

- mining amount of BTC, per unit time, should be proportional to CPU/GPU power, but in degree LESS than 1, till 90% BTC will be mined, algorithm must prohibit any parallelisation like ATI GPU does with current bitcoin algorithm

- distributed system should reject any possibility to group miners or peers in pools by design: they should be completely independent forever

- mining difficulty should be normalized to attract at least 1 000 000 miners world-wide, being on-line each day, on average

- transaction propagation should work in 'soft' real time conditions: we must guaranty that ANY transaction should be completed in 10 minutes, without paying fee, and if fee is 1% of transaction volume, we must guaranty that ANY transaction should be completed in 10 seconds

- if client wish, he could able to get possibility to de-anonymize, and to attract third-party that can roll back a transaction, if second-party is unhonest

Dude, this is awesome (except the part about chargeback by "third party")

Until you (or whoever will implement this), is done, I'll just use bitcoin, if you don't mind.

[mitchellhearts2]

I wanted my first post to be in a thread with a Amazing Troll from the bowels of hell so here i am,
I'm new to the forums, but not bitcoins at all, it seems you don't understand the idea that the bitcoin protocol has been decided already, the way it works is with hash/s, there is NO way to change the Crypto-currency system, sure, the difficulty can change to 1, and then the guys on ATI cards will still kick your sorry atom ass, it doesn't MATTER,just because you can't afford a ATI card doesn't mean something is wrong with the currency, not everyone is suppose to mine, you constantly make grandiose assumptions that are wrong in their core, you totally ignore some comments that obviously are too hard for you to comprehend, so here is my advice to you.

Step 1:
Find a Brick, also, a stone or anything hard at that size would do.
Step 2:
Wait until 2 AM
Step 3:
Go to some closed shop with a Show window, throw brick at window, get the cash, run, don't get busted.
Step 4:
Go to Sleep, wake up at 10 AM
Step 5:
Go to Newegg, and order your Brand new ATI Card!
Step 6:
Start mining, stop trolling about the system being bad because you can't afford a ATI card.

You seem to miss the fact, that it doesn't matter how the difficulty works, GPU's will always(in the foreseeable future) will kick your CPU's Ass in hash calculations.
the fact the difficulty is so high doesn't mean its less profitable, the opposite, you could have possibly mined a lot more BTC before, but back then, that BTC wasn't worth nearly anything on Exchange Value, Stop trolling, get yourself educated, spell check what you write since when you type with typos and are being incoherent, it makes you look more of a douche(that I'm certain you are,cheapskate).

[andes]

This thread makes me wonder of something very important. As a newbie, I have a question for the comunity:

Will the current implentation of Bitcoin induce CONCENTRATION of mining/block-creation power in few hands as difficulty goes up faster than moores law, and more and more expensive hardware is needed to be in the game??

Could we reach the time where interested big corporations or governments could be the only relevant block producers??

If that is the case, can concentration of power in mining bring security issues? In other words, if some cartels are formed, could the whole bitcoin project be manipulated by few people?? By adultering block chains for example??

I think whats important to consider from afterburner issue is this:

IS DESCENTRALIZED BLOCK CREATION IMPORTANT FOR THE SECURITY AND LONG TERM INDEPENDENCE OF BITCOIN?

I read somewhere that Bitcoin assumes never a 50%+  of the mining power will be concentrated in one hand. This is ludicrous to my current level of understanding.

This raises some further questions. As difficulty changes every 2 weeks, what happens if a Google like company gets into the game suddenlly with 10x the total combined power of current miners? Coud this sudden change of rules endanger bitcoin? Destroy it? I mean lets consider this wild posibilities. For big corporations this move would be peanuts. Remember that the atomic bomb was the largest project in history, done in secret, and its whole effect was deployed in just minutes. And that was with the analog technology of 65 years ago.

Very eager to read the answers from the experts arround here.

[andes]

I dont see afterburner being a troll. I mean he has gone to great lenghts to explain his points, and it seems he also wants to see the project succeed. Why so much aggressivity guys? If you dont like the thread, or dont like discussing possible bitcoin flaws, read somewhere else.

His motivations for being interested in the project initially (like wanting to be a miner) are not relevant. We all have different motivations, and all of them are valid.

I am investing some money in this thing, and I am glad there are smart people analizing possible problems of the project. Getting too passionate about this is not healthy for rational thinking. Neither is blocking yourself from considering potential flaws.

[Forp]

...the value of bitcoin is confirmed by 10 000 people....

Pff.  No it isn't.  If you offered most people here 100,000 USD worth of Bitcoins or 50,000 USD worth of Gold and 50,000 worth of Bitcoins, I bet they'd take the diversified risk.

There are simply 10,000 (or whatever) people who have sufficient faith in Bitcoin to make it part of their personal economic decisions.

Agree.

But the faith should not be dependent on many people MINING Bitcoin, but on many people USING Bitcoin.

I can relate to your feelings, since I discovered the hype for myself a few days ago. I realize that by the time my next deployment step with these shiny new 6990 watercooled miners is running, I will probably be heating my appartment with it and not making profit at current rates.

The real faith comes with people USING it to buy and sell goods and this needs a totally different form of software development.

Can't we always produce more coins just by splitting them further?

So maybe we should look into splitting techniques and into wallet improvement.

On the other hand: A thing which scales exponentially...always is very bad to adapt. So let's see.

And: If we split coins and prices go up...the early adopters in mining will make a fortune...and this might lead to greed and bad temper in the community. Still, it's granted. The guys took the risc !

[molecular]

The real faith comes with people USING it to buy and sell goods and this needs a totally different form of software development.

Can't we always produce more coins just by splitting them further?

So maybe we should look into splitting techniques and into wallet improvement.

That's implemented. You can split a coin into 100 Million pieces by using a decimal point. The smallest unit (some called it a "satoshi") is 0.00000001 BTC.

We can also switch to using different units (see other topics about this), like milliBTC, nanoBTC with minor adjustments to the client / websites.

[DonMon]

The elephant in the room here is what appears to be rampant SPECULATION.

If exchange rate increases for BTC were due to an increasing demand from individuals who would like to use those coins for goods and services, I would feel alot more warm and fuzzy about it.

But I fear that what we have here (at least in this small little time chunk of bitcoin's overall history), is a speculation machine.  People hear about bitcoin and the "make cash from your wall socket" angle from various articles and rush to snap up a used 5870 from Craigslist to begin printing money.  They then experience a difficulty increase and say wtf??  Then of couse, buying up the relatively cheaper bitcoins on the exchanges looks mighty attractive (cause it is always and ever going to increase in price right? )  Enough people doing this drives the price up...which low and behold, makes mining attractive again to a whole new batch of speculators. 

The problem as I see it is that the apparent 'strength' of the currency is really just a giant speculative bubble, supported by a legion of basement dwellers hoarding BTC's in encrypted wallets.

Again, this might still all shake out in the end...after this phase of rampant speculation...I am VERY curious to see if/how that transition will occur.

[Findeton]

The elephant in the room here is what appears to be rampant SPECULATION.

If exchange rate increases for BTC were due to an increasing demand from individuals who would like to use those coins for goods and services, I would feel alot more warm and fuzzy about it.

But I fear that what we have here (at least in this small little time chunk of bitcoin's overall history), is a speculation machine.  People hear about bitcoin and the "make cash from your wall socket" angle from various articles and rush to snap up a used 5870 from Craigslist to begin printing money.  They then experience a difficulty increase and say wtf??  Then of couse, buying up the relatively cheaper bitcoins on the exchanges looks mighty attractive (cause it is always and ever going to increase in price right? )  Enough people doing this drives the price up...which low and behold, makes mining attractive again to a whole new batch of speculators. 

The problem as I see it is that the apparent 'strength' of the currency is really just a giant speculative bubble, supported by a legion of basement dwellers hoarding BTC's in encrypted wallets.

Again, this might still all shake out in the end...after this phase of rampant speculation...I am VERY curious to see if/how that transition will occur.

How safe do we need a bitcoin to be? Well, it depends on price.

Difficulty means that bitcoins are more secure. Mining is used to process transactions, and as we reach an increasing computing capacity it's more and more difficult to trick the system into double-spending. When price rises, miners back the value of a bitcoin making it safer.

In other words, it will only be a bubble if we don't actually need bitcoins to be that safe.

[DonMon]

How safe do we need a bitcoin to be? Well, it depends on price.

Difficulty means that bitcoins are more secure. Mining is used to process transactions, and as we reach an increasing computing capacity it's more and more difficult to trick the system into double-spending. When price rises, miners back the value of a bitcoin making it safer.

In other words, it will only be a bubble if we don't actually need bitcoins to be that safe.

You are equating 'safe-ness' of the currency (ie can it be hacked, or otherwise fraudulently manipulated) with pure stampeding feeding-upon-itself bubblemania...two different issues.

Right now it is pretty clear that demand is overwhelming supply of BTC...the only question that needs answered regarding whether this is a bubble is if people are demanding those coins for the exchange of goods and services or are they demanding those coins because they just went up over %9000 and they are convinced they will do it endlessly...and so snatch up the meagre supply at that price and stash them in an encrypted wallet....i'm guessing it's the second...

The real test comes when some bit of news or outside disturbance of some kind causes a little hiccup in this run-up..and starts shaking a few speculators from their trees....(ie a correction).