Slashdot Mirror
Bitcoin Mining Reward About To Halve
First time accepted submitter ASDFnz writes "The reward for successfully completing a block (also called mining) is about to halve from 50 bitcoins to 25. From the article: 'Bitcoin is built so that this reward is halved every 210,000 blocks solved. The idea is as bitcoin grows the transaction fees become the main part of the reward and the introduction of new bitcoins slows down to a trickle. This also means that there will only ever be 21,000,000 bitcoins in circulation.' You can watch the countdown here."
My parents won't let me mooch off their electricty forever.
If there's only 21 million bitcoins that can be made, then if a lot of people started using them, they'd have to share them. There's something to be said for currency that has a indivisible limit -- for example, the smallest unit of currency in the US is the penny, though everything is typically counted in dollars. But while bitcoins can be divided, it adds a lot of complexity to the system and extra tracking and auditing. And it's main feature, anonymity, isn't really all that anonymous -- cash has serial numbers but there's no log of transactions built into the dollar. Bitcoins require that transaction log. In a lot of ways, it's about as anonymous as using a credit card.
#fuckbeta #iamslashdot #dicemustdie
Bitcoin is the greatest real-world experiment in Austrian economics. For once we'll get to actually see if a "deflationary spiral" will actually occur when the rate of money creation slows, or if the Keyensians were just full of it. Whether bitcoin actually succeeds or not, we'll at least get some really good data.
At 7 billion people, there exists 333 and 1/3rd people for every possible bitcoin.
People say.. well, you can use thouandths of a bitcoin, but is that really enough?
The current estimated wealth of the world is US$200 trillion. To get bitcoins down to dollar granularity, you would need to use 10 millionths of a bitcoin.
Oh no, the bitcoin ponzi schemes will have to double their reward in order to be viable!
Apart from silk road, bitcoins have practically zero value in the vast majority of financial transactions, so why do we care about this?
Feed the need: Digitaladdiction.net
What's the problem, never learned division or fractions in school?
"National Security is the chief cause of national insecurity." - Celine's First Law
Yea it's too bad nobody ever though of that or else they might have made sure each one is divisible to eight decimal places or something.
Each coin is divisible to 8 decimal places. There's 21 trillion coins if you leave the last two decimal places for "cents" function. If we don't have "cents" there are 2.1 quadrillion units.
The answer was cleverly hidden on their public wiki, the last place anyone would ever think to look!
https://en.bitcoin.it/wiki/Mining
I think I mined part of a bitcoin then lost the files I used to generate them. Does that mean they're permanently out of circulation? How do they handle such a situation?
It's validating transactions in the block.
It's a proof-of-work calculation that records a transaction history. Basically, it's to prevent double-spending; if someone attempts to transfer the same bitcoin to two different people, the person who gets it is the person who had more computational effort go into recording them as having it. If the amount of computational effort in recording transaction histories were low enough, someone could double-spend by recording an alternative history on a powerful computer and having it supersede the transaction history everyone thought they were using.
In order to encourage people to put effort into recording the history, there's a reward for doing so. This lead (perhaps predictably) to "mining", where people race to record the transaction history first in order to get the reward.
So there is a purpose to mining, but it's only to keep the Bitcoin system itself running. If people stopped mining (perhaps because the reward got low enough), Bitcoin would collapse. (It's envisaged that once the mining reward gets low enough, people transferring bitcoins will pay a transfer fee to the miners to encourage them to keep mining, and they'd get their income that way instead.)
(1)DOCOMEFROM!2~.2'~#1WHILE:1<-"'?.1$.2'~'"':1/.1$.2'~#0"$#65535'"$"'"'&.1$.2'~'#0$#65535'"$#0'~#32767$#1"
Bitcoin will let us see if money is something that can truly exist without government, or if the anarchists were full of it. Bitcoin's success or failure will almost certainly tell us more about this than about deflationary spirals.
Palm trees and 8
Get rid of them now. I suggest you send any bitcoins you have to this wallet address: 1AeCTNhF3Sovi8fkjq7Buy8sYoc2C4xoo4
Here's the highest-level view possible: a bunch of anarchists thought that an interesting cryptographic trick would let them have money without government, and then a bunch of opportunists realized that they could scam people with Bitcoin much in the same way that bankers scam people with unusual investments.
Palm trees and 8
How on Earth does SETI@Home benefit society? Even if by some bizarre coincidence, we actually detected evidence of intelligent life outside of the solar system, the likelihood that society would benefit by that is basically nil.
Palm trees and 8
If you believe the mhash/s speeds of (yet to be released) ASIC hardware, as well as decentralized P2Pool mining, then you'll need to factor in the effect of disruptive technologies on "deflationary spirals". Bitcoin mining was something I was recently evaluating and decided against after researching and factoring in the effects of profitability decline per year on revenue, especially if ASIC hardware delivers as specced.
sysadmins and parents of newborns get the same amount of sleep.
Since now they girls doing video clips for bitcoins! http://www.videos4btc.info/
I'm no crypto expert; but it was my layman's understanding that the bitcoin setup is(barring presently unknown attacks) unforgeable; but that there is nothing particularly special about the "Genesis block" at the beginning of the bitcoin block chain, aside from mutual acceptance of it.
Given that, while it is not possible to forge a bitcoin or to produce more than 21,000,000 of them, it should be possible for anybody who feels like it to simply define a new Genesis block and go hashing merrily away. The products of this block chain will be distinguishable from the products of any other block chain; but user convention could assign them value in exactly the same way as it did the old ones(or, more probably, they would trade at a discount against the 'original' bitcoins).
Any speculation on whether the people-who-care-about-bitcoins of the world are sufficiently rabid about some sort of deflationary theory of currency to prevent that, or will we start seeing N different distinct block chains trading between one another as well as select real world commodities?
Gold isn't that rare, they drag more of it out of the ground everyday. There is a max of 21,000,000 bitcoins. Enjoy your inflationary yellow rocks, chump.
Still infinitely more beneficial than bitcoins.
Gold has actual mechanical uses (electrical contacts.) It also has bauble value.
BitCoins have zero intrinsic value, and they require electric and Internet connectivity to be used. Gold requires a civilization level just a step above pure anarchy to be useful.
IMHO, it is sort of suspicious that there is this ramp where early adopters get these bonuses, and people hopping on late end up having to put a lot more resources in for the same coins... that combined with the value of the currency going up/down in insane swings, makes it useless as anything other than a novelty.
Yeah. A 1%er will be someone with 1% of a whole Bitcoin.
Gold is even useful in a real anarchistic society.
"Ubuntu" -- an African word, meaning "Slackware is too hard for me". - stolen from Dan C alt.os.linux.slackware
I used to be big on the BTC mining thing. These days, however, it just doesn't matter anymore.
I got into BTC fairly early, back when it was profitable to run the mining software on a single workstation to suck up unused cycles. At that time, it was actually profitable to invest in dedicated hardware to mine coins- so I (and a lot of other people) eventually did. My first dedicated rig was a HP ML350 G5, which set me back about $4000. It ran two 8 core processors and basically sat around all day mining bitcoins.
Later on when the GPU accelerated mining took off, I bought and built four systems from off the shelf components, and the ML350 was rededicated to running ESXi with a bunch of VMs for mining and managing the four slaves. Each slave had 3x ATI GPUs, later those were swapped out for NVidia GPUs for other various software reasons.
Then the FPGA (and later ASIC) players came into the game. It started with development boards (FPGA boards purchased direct from the chip manufacture), but later spiralled into custom FPGA boards in nice cases that you could stack or keep around on a metal shelving system easily enough. Now, the custom FPGA boxes for BTC mining basically put the GPU miners out of business- the introduction of FPGA hardware increased the BTC mining difficulty to the point that it was pointless wasting the power mining with anything other then.
The problem was that by the time the FPGA market exploded, it was *barely* worth investing in the hardware to get in that late in the game. Previously, buying a few PCs and loading them with GPUs was a cheap way to make some extra cash. FPGAs however cost a hell of a lot more and the difficulty of mining BTCs had increased so much that you would barely break even, and you'd be bloody lucky if you actually made any money in the end.
But FPGAs weren't good enough. People started thinking that they could build silicon to do things even faster, and thus the ASIC market started to emerge and take off. The problem here is that while an ASIC kicks the shit out of an FPGA (and anything that came before the FPGAs)- they're so expensive and the BTC difficulty has been bumped up so much by the initial ASIC wave and the FPGAs before it... That... Wait for it...
Investing in ANY form of ASICs to make **any** kind of reasonable money... Means that you'll never actually break even.
That's right, the ASICs they've got out there are so powerful and the BTC chain is becoming so difficult to mine, that if you invested $10K+ (which is what you'd have to spend) for a reasonable ASIC setup- you would never actually make any money. If your ASIC box is profitable, it won't be for long since the more ASIC miners join in on the party- the more difficult it becomes to mine BTCs.
So the whole system has kind of spiralled into nothing. Mining isn't profitable anymore. Even if you invest in serious hardware. It just doesn't matter anymore, and now that the "reward" for mining BTCs is about to halve- it's even more of a waste of time then it was before. You could have made money in the beginning if you were there, but if you weren't- it's not worth investing even a dollar into hardware to mine BTCs anymore. That train has long since departed.
BTC is basically just a currency now. Mining is vastly irrelevant and always will be, now that we've got FPGAs and ASICs flying around.
-AC
Is the money that spends on its own infrastructure utterly worthless when similar services already exist?
If not, then why is bitcoin's mining process (which maintains the security of the blockchain) utterly worthless?
... efff, the reply system ate a word because I surrounded it with greater than and less than symbols for emphasis. Let's try this again:
Is the money that *random commerce company* spends on its own infrastructure utterly worthless ...
losing a bitcoin works a lot like losing the paper bills used in some other currencies, although its easy (and perfectly fine) to copy or back up your bitcoin wallet, whereas most older systems frown on "backing up" paper currency.
the number will indeed go lower than 21 million due to loss. there are quite a few lost already, so I suppose there will never actually be 21 million in existence at once.
it doesn't make a real difference in the big picture. even if 99% of all bitcoins were lost, we'd only effectively be losing one decimal place.
-Lod
Also, they're just floating-point numbers. Should the need arise they could be subdivided indefinitely with only minor alterations to the existing Bitcoin protocol.
They are just numbers. Bitcoins could therefore be subdivided as small as is reasonable or required for actual usage. For example, the main Bitcoin client currently allows you to display bitcoin figures in BTC, mBTC (1/1000 BTC), or BTC (1/1000000 BTC).
I believe the current Bitcoin protocol supports subdivisions up to 8 decimal places. Apparently this can be extended further with minor alterations to the existing Bitcoin protocol.
No, that doesn't change the number of bitcoins. You might as well be saying that there are enough US pennies on the planet for everyone to share because if you run out, you can divide the last few into 1,000,000,000 pieces. Sure, you could, but it is less than one per person, the initial complaint.
It's much like the psychology behind stock splits. As stock splits aren't based in economics (Apple at $571 isn't different than 5 shares at $571/5).
Learn to love Alaska
Sorry that should have read (nano)BTC (1/1000000 BTC) -- Slashdot ate my unicode character.
The reality is that all these sites are using Bitcoin for is a transaction mechanism. They are not keeping their rake in bitcoins, they are exchanging it for cash because that is what the real world operates in. Similarly, the people making the wagers are exchanging their cash for bitcoins in order to play the game. In essence bitcoins are just being used as a payment processor for these sites.
Also, people who think bitcoins are not under government control are woefully mistaken. Aside from the pittance of coins one can mine, how do you propose to get any substantial amount? You need to go to an exchange. How do you purchase using that exchange? Using your credit card. Which is easily regulated.
IE - government can force Visa and Mastercard to shut down all bitcoin exchanges whenever they want to, effectively killing the currency for all intents and purposes. They only reason they don't do this is because it is not relevant enough to care.
I wonder how many Bitcoins I can mine with a few hours in Amazon's Elastic Compute Cloud?
Or maybe I can put my mining in as the idle loop of some of these new petaflop supers.
"It's the height of ridiculousness to say for those 9 lines you get hundreds of millions."
Uh. The ASICs that are about to hit the market start at less than $200.
yes, hence why they deflate.
Learn to love Alaska
That's not anywhere near specific enough.
Is the exact algorithm outlined....anywhere?
PS: I don't reply to ACs.
Does anyone have a good estimate as to how much wasted electricty is going to "creating" bitcoins?
-- these are only opinions and they might not be mine.
How on Earth does SETI@Home benefit society? Even if by some bizarre coincidence, we actually detected evidence of intelligent life outside of the solar system, the likelihood that society would benefit by that is basically nil.
Directly, on the positive side, it would pretty much kill some religions, or at least transform them into less harmful variants that don't preach that humans are unique and masters of everything.
On the negative side, it would probably trigger some new ones. If people can believe in Xenu, Kolob, Ezekiel or John's revelation, they most certainly would be able to start cults based on extrasolar intelligence too. Hopefully, most of them will put on their Nike sneakers and leave us.
Indirectly, it would likely renew interest in space exploration, which I think might benefit us all, and especially our descendants and their chance of survival.
Why so angry? I've noticed there are some who react this way, never understood it but would like to.
-Lod
How so? You can't eat it, it's too soft and heavy to fight with, and no one is going to be building electronics if civilization falls.
People started thinking that they could build silicon to do things even faster, and thus the ASIC market started to emerge and take off.
Well, maybe. Like much in the Bitcoin world, some of this is a scam. At least one of the "ASIC" products turned out to be an FPGA. As of right now, it's not clear that anyone is actually shipping an ASIC-based Bitcoin mining device. Suckers can pre-order from either of two vendors. Payment is in US dollars, not Bitcoins.
You confuse anarchy and chaos.
OMG you're right. I can't believe all the people who've been working on this project for the last three years missed these numerous fatal flaws.
Please, go onto the Bitcoin forums and let them know what you've discovered right away so they all know it's time to give up and go home.
Why so angry? I've noticed there are some who react this way, never understood it but would like to.
What's to understand? It's simple! All these bitcoin articles that keep popping up are wasting all the 0s and 1s! What happens when we run out, hippie? 0s and 1s don't grow on those stupid trees you love to hug! They have to be mined, by lazy, overpaid union miners, like these good-for-nothing bitcoin guys. If they're running out of bitcoins already, you just know the 0s and 1s are next!
No, that doesn't change the number of bitcoins. You might as well be saying that there are enough US pennies on the planet for everyone to share because if you run out, you can divide the last few into 1,000,000,000 pieces. Sure, you could, but it is less than one per person, the initial complaint.
The initial complaint is only relevant to a government managed currency, since they have to provide enough money for the entire economy. Bitcoin only has to sustain a portion of the economy, and if it becomes too small, it will simply be less competitive with other currencies.
It's much like the psychology behind stock splits. As stock splits aren't based in economics (Apple at $571 isn't different than 5 shares at $571/5).
What do you mean "stock splits aren't based in economics"? The whole premise behind economic activity is a balance sheet, and you can draw one up for a stock split quite easily. Before the split, the company's equity might be $10,000,000, with 100,000 stocks at $100 each. After the split the equity is the same, but there are now 1 million stocks at $10 each.
So for any given shareholder, they each hold the same amount of equity.
If by economics you're talking about supply and demand, a high stock price is obviously a classic diseconomy of scale: it's just easier to find buyers who might want $80 of stuff instead of $100.
you imply a practical difference.
Can I charge .25 bitcoins? If not isn't the max of 21million coins a problem?
Please enlighten us as to the reason that deflation = disaster? because history show us everything went well until early XX century.
Sure you can eat gold, you can even drink it. Personally can't see why but *shrug* to each their own.
There is a major difference between political anarchy and chaos. In political anarchy you still have order, but instead of a central government controlling everything it's done with voluntary contracts at the individual level. One of the core beliefs an anarchist has is personal freedom via volunteerism is the only real kind of freedom. There will still be a need for money in a society like that. It could be gold, silver, beads, goats, or whatever the two people doing business agree on.
If you or I believe that's a viable political structure is a different conversation.
"Ubuntu" -- an African word, meaning "Slackware is too hard for me". - stolen from Dan C alt.os.linux.slackware
The difference is BitCoins are pretty much useless, while the others are processing real data in an attempt to benefit society.
Tell that to Wikileaks(1hb5x), who were able to raise 35,000$+ worth of bitcoin when all other methods failed. Admittedly that number could be larger, but the fact that they were able to do that much in and of itself is something.
GENERATION 26: The first time you see this, copy it into your sig on any forum and add 1 to the generation.
According to various types of political anarchist (there's more than one group communist anarchist, ancap, etc) living in an anarchist society would be an improvement to civilization and not the fall of it. The view of a society is subjective. Some people place personal freedom above all else. In order for them to have the personal freedom they want a central government can't exist. They view the government as an entity that exists solely to rob, murder, and kidnap anyone who doesn't agree with their arbitrary laws.
In their society there would still be a need for money, because they would still be doing business with each other. Money is anything someone else places a value in. If you want to come work for me then we'd sign a contract that outlines what your job is and what compensation you require. I could pay you in gold, silver, goats, beads, etc.
What I said probably only pertains to ancap, because that's the only group I've actively read anything on. I plan to get to the other groups though.
If you or I believe that's a viable political structure is a different conversation.
"Ubuntu" -- an African word, meaning "Slackware is too hard for me". - stolen from Dan C alt.os.linux.slackware
How on Earth does SETI@Home benefit society? Even if by some bizarre coincidence, we actually detected evidence of intelligent life outside of the solar system, the likelihood that society would benefit by that is basically nil.
It increases our knowledge of the nature of the universe.
Also, it gives us practice developing distributed computing systems.
You mean micro, which uses the mu symbol (a non-ASCII character). Nano is just "n".
Just use "u" for micro.
Um, yes it is. If you're living in an anarchist society you can use whatever you want for money. If you want to use bitcoins that's fine. All you have to do is find someone willing to do business with you in bitcoins. If I want to use goats that's fine to. No one would be forcing you to use any one thing as money.
"Ubuntu" -- an African word, meaning "Slackware is too hard for me". - stolen from Dan C alt.os.linux.slackware
Comment removed based on user account deletion
Gold is finite in supply, too. Why isn't that disasterous?
Nobody* is suggesting we get rid of the dollar, just use Bitcoin as any other trade-able commodity.
What?
Sure, you could, but it is less than one per person, the initial complaint.
I still don't see why it matters. Why can't we use BTC?
What?
With a gold standard (that no longer even exists, of course) it's only inflationary if the new supply of gold grows faster than economic expansion. Otherwise even gold can be limiting and deflationary.
Bitcoins, on the other hand, will be completely deflationary due to their very finite and rate limited supply. Using them as a currency would encourage hoarding and completely dry up lending, pretty much sending economic growth down the toilet.
I mean, seriously, can't geeks get over bitcoins' digital nature and understand basic the economics and psychology behind this? How about imagining bitcoins are WoW gold and new supply just stopped completely. Basically anyone who hoarded them is now "rich", and anyone new to the game and without them is screwed. Sort of like how it would happen in real life if we went back on the gold standard, let alone a "bit coin standard".
Gold has actual mechanical uses (electrical contacts.) It also has bauble value.
BitCoins have zero intrinsic value, and they require electric and Internet connectivity to be used. Gold requires a civilization level just a step above pure anarchy to be useful.
IMHO, it is sort of suspicious that there is this ramp where early adopters get these bonuses, and people hopping on late end up having to put a lot more resources in for the same coins... that combined with the value of the currency going up/down in insane swings, makes it useless as anything other than a novelty.
I find it pretty unfair that the early gold miners got such large bonuses. It's much harder to mine gold nowadays. No more standing by the river with a sieve will do it :-(
People already pay mining fees, typically 0.0005BTC / transaction. Right now you get about 0.1 BTC in mining fees from a block, and 50 BTC from the built-in reward (which functions a a way of distributing bitcoin initially). As the reward halves every 4th year and number of transactions supposedly rises, a higher percentage of a miners income will stem from tx fees.
You can make a transaction without paying a fee, but not all miners will include your transaction in their block, and thus your transaction may take a long time to be confirmed.
What?
Try paying your taxes with Gold, or corn, or cattle, or any other commodity publicly traded on an exchange. That doesn't mean it has no value.
Sorry, but value is subjective. You don't get to tell other people how much they value what they own and what they're allowed to sell it for.
And if Bitcoin isn't on topic for Slashdot (News for Nerds), then I give up, I don't know what is.
Wonder what the public key field is for?
on /.?
May god have mercy on our souls
In the era of gold-standard currencies, gold was for all intents and purposes not limited- it was a continually growing supply, as mines continued to flood the market with produce, and new mines were established every year. When the supply stopped growing so consistently- known mines started to dry up, and "undiscovered country" became scarce- deflation kicked in and was disastrous. The Great Depression is often blamed on this deflationary effect. That is why all major economies abandoned it.
Look at gold prices now. The price has tripled in the last decade- massive over-valuation, due to demand hugely outstripping demand (mostly from investors and speculators, rather than anyone wanting to do anything practical with it). Nobody knows if the price is going to spike even higher, or crash spectacularly; it is extraordinarily volatile.
The knowledge that there is intelligent life in the universe seems like a pretty big benefit to me. Knowledge is beneficial in its own right.
Just because it's not going to give you a flying car or a cure for cancer doesn't mean it isn't beneficial.
Actually, you can eat gold.
http://en.wikipedia.org/wiki/Gold_leaf#Culinary_uses
By reading this signature, you hereby agree with the content of the above comment.
It was, that's why most (or is it all?) currencies are no longer linked to gold.
And yet I have more than a few friends who actively replace their surplus currency with gold, whenever they can.
What do you mean, "and yet"? That makes a lot of sense because they are getting something they know, with as much certainty as they can, is real gold.
If the time ever comes where they need to use the gold they can simply reverse the process, go to someone who has the equipment to verify what they have is gold, and give them the equivalent amount of currency at the time.
That's the same way the bicycle purchase should have worked - the guy could to to someone willing to verify his gold and exchange it for enough cash needed to buy the bicycle.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
If the entirety of wealth in the world was backed by gold (no fractional reserves, all currency gold backed), transactions could be done with the gold in seawater.
Highly deflationary indeed.
Wow, sent an e-mail as suggested when clicking on "use classic" banner, and got a fast response that addressed my msg
if someone attempts to transfer the same bitcoin to two different people, the person who gets it is the person who had more computational effort go into recording them as having it
Wait, what? How much computational effort does it take to spend a bitcoin? Would I have to worry about accepting bitcoins with weak transaction histories? Who's responsibility (buyer or seller) is it to ensure the transaction is recorded with enough effort? This sounds like a scary and dangerous way to do things. How is this not a problem? (Just to be clear, I'm asking from honest ignorance.)
Unrelated question:
If people stopped mining (perhaps because the reward got low enough), Bitcoin would collapse.
Could you expound on why it would collapse?
And Nobody* suggests linking Bitcoin to any currency.
What?
It was disastrous because the economies were pegged to the gold prices. Nobody wants to peg the dollar to bitcoin, because Bitcoin is simply a commodity, just like gold (today), oil, Apple stock or minerals.
What?
Meant to use a mu-sign, as in uBTC. Slashdot didn't want me to.
What?
Gold is finite in supply, too. Why isn't that disasterous?
Look up what happened to the gold standard...
It's not disastrous. That's a modern myth. But you don't have to take my word for it, ask economists at the Federal Reserve.
So how stable is the bitcoin exchange rate these days? Can I start using it seriously yet for receiving as payment for services?
It has no nutritional value, I think is the grandparent's point. Yes, you can eat it but you might as well not.
xkcd is not in the sudoers file. This incident will be reported.
Which centralized control body is going to do this ? The bloody UN ? The lack of centralized control (control which this would require) is the point for many of the users. Why should I as an individual Bitcoin user have to pay for history making when "the system works already" ?
People do choose to pay transaction fees. It's a feature already implemented and in use. You can choose not to pay a fee, but your transactions will likely take longer to be processed.
no, the point i made was that it wasn't a viable political structure. at least in my opinion. i'm not concerned with the difference between anarchy and chaos on a theoretical level. i'd like to see it in practice, but then again i don't. unless self-interest is extinguished, no perfect system can be devised. a system's flaws might just be what keeps them viable, if not perfect.
The miners put most of the computational effort in for you; typically you pay a small fee to encourage them to put your transaction into the chain. Usually the buyer will pay the transaction fee, and the seller won't count the sale as complete until it goes sufficiently far back in the train. (In other words, while Bitcoin transactions are instant, it takes a nontrivial amount of time to determine for a fact whether a transaction happened or not. And as such, a cautious seller won't release the goods immediately, but wait until there's enough effort in recording that version of events that nobody's unlikely to override it with a new one.)
So if the mining stopped, nobody would be recording transactions any more. As such, double-spending would be trivial; you could repeatedly do a small amount of mining to satisfy one person that they had the coin, then a bit more to change the history's idea of where the coin went and give it to someone else (or a second account you control). As such, people would have to wait for a very long time in order to be satisfied that a transaction were genuine if there were no mining, and this would make transactions basically impossible. A currency is worth nothing if you can't meaningfully trade it.
(1)DOCOMEFROM!2~.2'~#1WHILE:1<-"'?.1$.2'~'"':1/.1$.2'~#0"$#65535'"$"'"'&.1$.2'~'#0$#65535'"$#0'~#32767$#1"
We have left the gold standard. Gold still exists and is still in limited supply, but is no longer disastrous.
What?
Any currency is legit if the two trading parties agree to it.
Democrats or Republicans. They are both taking us to the same place and they are not afraid of us anymore.
In other words, it's the same as the current civilization? If I want to use knots in rope as money and can find someone who accept them as currency, I can do so right now.
"There is a major difference between political anarchy and chaos. In political anarchy you still have order, but instead of a central government controlling everything it's done with voluntary contracts at the individual level. "
There is no difference. In a real anarchy you pay for 'protection' to your local gang, which replace the government quite quickly.
As opposed to an individual who would rob, murder, and kidnap anyone who doesn't agree with their arbitrary laws ?
Why would one enter a voluntary contract when there isn't a central authoriaty to enforce it?
Time is what keeps everything from happening all at once.
And this, dear kids, is why libertarianism doesn't work. There's always that asshole that abuses the system.
There. Fixed that quote for you.
You add an enforcement mechanism to the contract. Something along the lines of, if you don't do your part, my criminal insurance firm Sharper Security get to come collect and your buddies at Gila River agree to let them collect.
Then, as long as Sharper Security and Gila River value their reputation for honoring contracts more than their desire for going to war against each other, our contract is enforced, even though we don't have a central authority to enforce it.
If you make a public bet with a buddy at work, why would you enter that contract if there isn't anyone who would ever enforce it? At least in part, it's because if one of you welshes, no one will want to deal with you in a similar manner in the future.
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
Anarchy more viable then any other functional political structure because it's the BASE power structure. It's the common base political structure in the nature for non-sentient animals, and it's also a base political structure for humanity. When other structure collapses, anarchy typically remains as the underlying power, but its tendencies are harnessed and controlled by higher power (and political) systems such as dictatorial, republican, theistic and so on.
Anarchy as a political structure features power interactions on individual level only. Most political systems build on top of natural anarchy, slowly instituting power to control base, anarchist tendencies, ceasing to be anarchist (by definition) in progress. When these power structures cease to exist, natural anarchy is what remains. Not what "comes to existence", as it always exists on base level, but what gains control when other power structures fails.
This is why anarchy is the typical outcome of power vacuum created by societal collapse, such as that in war-torn countries for example.
Bitcoin is not a currency or even a product. You guys are the product and bitcoin is just the honey to catch you.
And that's the trouble with bitcoin: it's deflationary.
As always, all IMO. Insert "I think" everywhere grammatically possible.
So "Sharper Security" becomes the enforcer of contracts? How is this better than a government that enforces contracts? I, for one, do not recognize "Sharper Security" as an enforcer of contracts. What power, short of the ability to garnish my wages or impound my possessions, do you wish we all agree to to empower them with that would force my will to yours?
Time is what keeps everything from happening all at once.
Even if by some bizarre coincidence, we actually detected evidence of intelligent life outside of the solar system, the likelihood that society would benefit by that is basically nil.
1. Find intelligent life outside of the solar system.
2. Continue monitoring any signals we can get from that direction, and figure out how to decipher them.
3. Once we've completed that, take advantage of all the scientific and technological ideas that the aliens have come up with that we haven't.
Obviously, steps 1 and 2 are ridiculously hard and time-consuming, but we in theory at least have some ideas on how to do them, and the payoff is step 3. And of course if we ever develop fast travel, we have a possible destination that we have every reason to think will be potentially useful.
I am officially gone from
Most types of money started without government, and came from merchants such as goldsmiths with governments coming late to the party to make sure they could tax everyone.
However that is no way justifies stupid deliberately flawed ponzi schemes like bitcoin designed to punish the late adopters for the benefit of early adopters. Ignoring all other flaws the price of entry late in the game will get to a point where it is unlikely to provide any obvious benefit for people joining in so it will stagnate leaving those at the bottom of the pyramid with far less than they've put in and no sign of any suckers to enlarge the pyramid and get their money back.
Because you both have voluntary contracts with contract enforcement insurance companies. Basically, something like the mob.
Since it's a scam aimed directly at the sort of people that are interested in mathematics, computer systems and other items featured here it's bound to make some people here who see themselves as targeted by a scam very angry.
There is no reason to believe bitcoin has a long term future and anyone who favours bitcoin over something tangible such as precious metals really is an idiot.
The extra effort required to mine coins also increases the likelihood that someone will product another bitcoin-like currency purely to profit the same way as the early bitcoin boosters did - launch a new digital currency from scratch, encourage miners and speculators to buy in, spout a bunch of libertarian nonsense to appeal to potential investors, watch the exchange rate increase, and then cash out before the price slumps. Rinse and repeat.
ah. suppose nothing can be done about that then.
cheers.
-Lod
Directly, on the positive side, it would pretty much kill some religions, or at least transform them into less harmful variants that don't preach that humans are unique and masters of everything.
Religious belief routes around damage. They find a way to believe in the same eventual thing they always do.
Indirectly, it would likely renew interest in space exploration, which I think might benefit us all, and especially our descendants and their chance of survival.
Hell yes! I think discovery of intelligent life outside Earth would completely change how we operate as humanity.
but instead of a central government controlling everything it's done with voluntary contracts at the individual level.
Who enforces those contracts? Individuals can't, or the worth of a contract is simply directly proportional to the physical violence or other form of coercion that individual is willing to wield in order to enforce it. Society (i.e. social contracts between individuals or groups) requires the threat of violence and coercion in order to exist, as otherwise freeloading becomes the optimal strategy. Many individuals will not share power willingly, or allow personal freedom to others, you don't seem to account for those refusniks.
If you or I believe that's a viable political structure is a different conversation.
Actually no, the essence of this question (Is anarchy equal to chaos, or is it something else?) lies exactly at the nexus you have tried to sidestep - is 'political anarchy' viable, and if not, what defines the difference between anarchy and simple chaos? Without answering that question, and thus defining who holds the power, you can't really say what anarchism means, and whether it is worth considering as a political philosophy.
PS I love your term political anarchy, with it's implication that we can achieve political anarchy, as you narrowly define it, without all other kinds of anarchy following in its wake. Your political anarchy seems to depend on entirely rational humans acting in their own long-term self-interest.
Short answer: Transactions require fees. Currently, since the transaction count is easily manageable and block reward is high, most miners process the transactions that have very low or no fees. However, as the block reward diminishes, fees will replace them.
Long answer:
Users have the incentive to pay a high fee so that their transactions get into a block. Miners have the incentive to get every transaction they can get into a block to collect the highest total fees, thus accepting lower fees.
The mechanics actually is even more complex, because there is less incentive to use Bitcoin if the fees get too high, which would cause the value of coins to get lower, which would in turn decrease the mining incentive, thereby decelerating the increase in difficulty, which would reduce mining costs, which would cause the fees to go lower.
So the commonly accepted fee will be at the equilibrium. Since the Bitcoin economy (at least as it is currently) has a very low friction, the equilibrium is rapidly reached.
One concern is how the standard will be extended from now on. We don't want a centralized authority to dictate block sizes and whatnot, but we don't want it to become too hard to develop the system to fix problems. Hopefully the open source philosophy will help us there.
A deflationary currency works fine so long as the rate of deflation has a lower magnitude than the average market return on investments. If you can earn an expected (risk-adjusted) 1% in an index fund it would be inadvisable to hoard any currency with less than 1% deflation.
There is intrinsic value in a thing that can be used for making quick payments to anyone across the Internet, with low fees and no regulators standing in the way.
He's taking the piss because Bitcoin has in fact solved the problem of how to distribute fees to miners without any of the problems you claim will exist, and that's trivially verifiable by anyone who takes the time to learn about how the system works. His wider point which you missed - if you think you've found a obvious and gaping flaw in its design, you're probably wrong, or at least you're going to find yourself in the middle of complex debates with no clear resolution (eg, about Austrian vs Keynesian economics).
In much the same way that there is a difference between Leninist Communism and authoritarian dictatorship -- that is, the difference is purely an notional one in the idealized description, but not a difference that there is any reason to believe would actually have any practical manifestation were the ideal actually attempted to be put into practice in a real society with real people.
As Madison wrote: "If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary." Systems of anarchy or unrestrained government both fail in the absence of angels.
Not really. It can be used as a semiconductor, that's about it. Outside of that, you're banking on the "Oooooo, Shiny!" factor, which a lot of people simply won't care about.
And all of that takes just one asshole to fuck everything up.
Again, you're hoping that the other party isn't just going to tell you to fuck off. You're also hoping that you can afford to pay Sharper Security. If you're not well off, then you're fucked.
Some people place personal freedom above all else. In order for them to have the personal freedom they want a central government can't exist. They view the government as an entity that exists solely to rob, murder, and kidnap anyone who doesn't agree with their arbitrary laws.
And yet, all the seem to do is sit around, bitch and moan about said governmental entity, while enjoying all the privileges and benefits living in such a country bestows, instead of actually going off and living the life they claim they want. They don't actually want freedom. They want to force us all to what they want.
I cannot take any of these people seriously.
That's no different than today. The only difference is that there's generally one or two default currencies available that the governing entity provides. You know pretty much everyone in your locality will accept this currency. If you wish to try and conduct trade in some other currency, you are free to try and do so, but no one else is obligated to accept your chosen form of currency.
This comment has nothing to do with the increasing difficulty, I understand why that is so, but IMO Bitcoins are useless, except as a prototype of how a digital economy might work. Limited to 21,000,000 coins ? Can an economist explain how the world with 7 billion people would divide that up ?
Will you retract this statement if it can be shown that tomorrow bitcoin will have more users than it has today?
No, the statement started as, "The scenario is that"
Then after that was proven false, it became, "The more likely scenario is that"
Then it became, "I think the more likely scenario is that"
Then: "Maybe, but I think the more likely scenario is that"
Finally: "Maybe, but I _still_ think the more likely scenario is that"
Tomorrow: "Probably, but I still cling to the thought that today is the day that the scenario has finally become..."
I don't want to force you to give up the governmental system you choose. I just want you to disavow the right to force me to support your system. You can continue to fight your wars, pledge allegiance to your flag, collect your taxes from your members, etc. But I would like the chance to get together with other people like me and quit supporting your system and start competing systems.
I don't want either you or me to force each other to do anything.
Secession is the right of all sentient beings.
Why do that? Why not just make the units smaller? It seems pretty stupid to have to go down to 6 decimal places to get a candy bar or something.
Let me summarize my previous post with a question.
Has there ever been a society where the lazy melted away where women didn't die in childbirth--no matter how young or how beautiful--over random weaknesses of constitution?
When your wife is dying in childbirth, that must be about the most helpless feeling a man can experience. I suspect it's bad enough to make a man re-invent civilization all over again, when we've only barely rid ourselves of the beast.
What do you mean "stock splits aren't based in economics"? The whole premise behind economic activity is a balance sheet, and you can draw one up for a stock split quite easily. Before the split, the company's equity might be $10,000,000, with 100,000 stocks at $100 each. After the split the equity is the same, but there are now 1 million stocks at $10 each.
There is no economic difference between the two. The numbers in some fields of a form change, but no changes happen to the bottom line. There is an accounting issue (100 tiny grapes vs 10 large apples in a bushel), but the weight and value of them both is exactly the same. No economic difference. The *sole* reason for stock splits is psychological (and the economic changes from those psychological tricks on investors, which are indirect).
Learn to love Alaska
The distributed account book is what has value. It makes it easy to transfer funds between people, especially if they are in different countries. A bitcoin is just an arbitrary accounting marker in the book. It has no value in and of itself, only when part of a larger system that includes the whole account book and network. Since maintaining the account books is a useful function, the people who do that get credited with some coins by lottery, that is all that mining is.
Ask any business, bank, or brokerage house if keeping the accounts for the business has value.
What normally ends up as money is whatever is the most easily traded commodity in a given society. At times that has been cattle, gold, paper money, and now debit cards. But people prefer to accept that good which is most easily traded for what they really need and want. They would work directly for what they want, but finding someone to pay you in apartment leases (barter) is difficult, so they settle for whatever everyone else collectively has chosen to use.
I started with "what normally ends up...", but that can be subverted by force, as when a government bans some forms of money in favor of others (usually ones they produce themselves).
What I expect is if there are severe structural flaws in the current Bitcoin system, the developers will come up with Bitcoin series 2.0, in an attempt to fix the flaws, and it will exist in parallel with the original. It's like having more than one stock on the stock exchange. Then people can transition to the new network at their own pace for their own reasons.
The *sole* reason for stock splits is psychological (and the economic changes from those psychological tricks on investors, which are indirect).
That doesn't even make sense. People who want to feel rich cash their paycheck in $100 bills, they don't get a stack of singles.
To quote my earlier comment:
If by economics you're talking about supply and demand, a high stock price is obviously a classic diseconomy of scale: it's just easier to find buyers who might want $80 of stuff instead of $100.
Now, if you disagree that this is an issue, please explain why we don't simply get rid of all cash except for $100 bills. After all, carrying around 5 $20 bills is simply a waste of paper.
Mining wasn't meant to be the biggest business in the world of Bitcoin. It will never be the type of "work" that can feed the masses, just like in the real world, only a few people are miners. But that doesn't make the idea of donating your computing/networking/whatever resources to some crowdsourcing mechanism in exchange for micro-payment invalid. Here is a couple of services that your computer could provide to others in an automated, peer-to-peer fashion for a couple of 'toshis:
I guess there might be some real economic potential for the last couple of items on the list.
Has anyone attempted to write some kind of service-for-bitcoin software?
I do exactly the same though I'm on Economy 7 and thus only mine at night. I don't get anything like 4 bitcoins a month though.
Now, if you disagree that this is an issue, please explain why we don't simply get rid of all cash except for $100 bills. After all, carrying around 5 $20 bills is simply a waste of paper.
When currency was pieces of 8, you would only carry $100 bills, and you would pay with a fraction of it for things priced less. I can buy a fraction of a share. I own fractions of shares now. There is a problem if you want a $10 item and offer 1/10th of a $100 bill for it. I can buy 1/10th of a share of Apple. Regardless, that's not an economic reason.
As stock splits aren't based in economics
Despite all your complaints, you've never invalidated the statement I made that you objected to. That makes me think that you know you are wrong, but you don't like the answer, so you argue without regards to the truth.
Learn to love Alaska
It's done.
Mining isn't the only way to get bitcoins.
Maybe this is too obvious for you... but we're talking about a voluntary contract. If you don't have a mutually agreed enforcement provision, then you don't have a contract and you can both go your separate ways.
No one is forcing you to make the contract. It's called freedom.... you agree to what you agree to and don't agree to what you don't.
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
No, if you can't afford to pay someone on retainer, then you sell part of your contract rights to someone else who can enforce them.
It's not like a similar system didn't keep the peace and work fine in Iceland for hundreds of years until the Catholic church moved in, took over and started creating taxes based on property locations, after which the old system started fading away.
The party of stupid and the party of evil get together and do something both stupid and evil, then call it bipartisan.
The way I always saw it was that if you had one person try to intimidate people, coercion, etc, otherwise trying to tip the scales. It would be considered 'just' if that person were to suffer an accident, or someone refuse to be intimidated and while justifiably threatened by the person attempting the intimidation, they would defend themselves to the fullest extent, be that anywhere on the scale from a light bruising through to lethal force.
Person A sells themselves into slavery, person B buys said person, person A gets fed up of the treatment, (typically viewed as breach of contract by person A) and vacates to ignore the rest of the contract. The issue between A and B has no impact on Person C, who when presented with the facts at hand, gets to make up their own mind as to the legitimacy of the deal.
Yes it would be unstable as hell. But it might work for at least a few years before changing from a 'I am lord of my own feifdom" to "i pledged my personal feifdom to Lord X in exchange for safety i was too scared/feeble to secure for myself"
P.S. I dont think its a good idea. Just trying to help explain why it doesnt actually matter about self interest still existing.
XML - A clever joke would be here if