difficulty too high while bitcoin society too small

[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?!