The mining computation should be changed to calculate for folding@home.
Bitcoins security model is dependent upon a PoW which must have a very granular difficulty adjustment where blocks are discovered on a Poisson Distribution curve. Searching for primes or folding@home would not fulfill this requirement. Additionally, It is necessarily wasteful as part of bitcoins security model due to the fact that real costs must be sunk into attacking the currency instead of simply bootstrapping it to some other task you would be doing anyways for no added cost.
The great news is that most mining these days is using unused excess hydroelectric from Chinese dams and the heat can be recycled. Additionally, the "wasted" energy need not scale with the price of bitcoin as originally expected due to the fact that payment channels can heavily subsidize block reward with tx fees and the security of the network will depend both upon decentralized LN nodes being subsidized(which use practically no electricity) by sharing tx fees with miners
If this holds true, who would ever want to spend bitcoin for anything?So bitcoin mining would be pointless if there will be fewer and fewer transactions. People just want to buy and hold. Unless what they buy will not appreciate. Then they dump and run. That makes bitcoin mining pointless because bitcoins wouldn't be worth anything.
All this fear could dissipate if bitcoin mining were to calculate useful results. People would be encouraged to use bitcoin in their lives because the mining actually benefits everyone.
This is an often repeated fear from Keynesian economists that high deflation will cause hoarding and a "deflationary death spiral in bitcoin" , The data shows the opposite, during periods of high appreciation(deflationary adoption bubbles) bitcoin users give more to charity and spend more on goods and services. This is thought to be because of the wealth effect , where users feel more comfortable spending because they feel more wealthy due to them being wealthier in reality. This is also similar to purchasing a laptop that will become obsolete in 6months to 1 year, one always knows the next model will be released in the future but realizes they still need a laptop now and will spend the money regardless.
That makes bitcoin mining pointless because bitcoins wouldn't be worth anything.
Have you seen the price lately? Please check the 8 year returns , 1 year returns , and 1 week returns. Bitcoin stopped being simply used for speculation a very long time ago and now is has a circular economy of users who have an inelastic demand that need bitcoin to survive. Yes, plenty of speculating (when did saving money become such a naughty word?) , but the real life utility is undeniable as well for whitemarket or blackmarket use cases.
A Block chain database would only be as secure and fair as the security behind it. Thus only public blockchains with proof of work would qualify. Bitcoin is the most secure example to date. You could indeed use colored coins, counterparty, sidechains or other layers to create an immutable voting ledger within bitcoin but I wouldn't want to create an incentive to begin to attack bitcoin anymore as is, and with presidential candidates spending over a billion dollars on campaigns I would be a little worried they may try to manipulate the open source development process or play other games to weaken security. Thus we would want bitcoin to mature a bit before serving any such purpose.
Decentralized Torrent tracker where seeders and uploaders are rewarded with bitcoin and he takes a small cut. This will at least fill in the gaps of missing content that is hard to find on piratebay and lack seeders. Should be another great use case for bitcoin along with gambling/speculating, dark market drugs sales, prostitutes, ransomware, and regulatory arbitrage of giftcards/amzn points.
How do you turn bitcoin back into cash or gold without a paper trail?
Certain ATMs don't have KYC, but the better way to anonymously sell your bitcoin is with either localbitcoins https://localbitcoins.com/ or mycelium localtrader https://mycelium.com/lt/help.h... in person. This also makes it easy to quickly transfer bitcoin where you don't have to wait for confirmations - https://opendime.com/
Actually you are mistaken because you assume the speculation is day trading. Many speculators are holding coins for longer than hours, waiting for big changes like the one we have recently experienced. Many are probably trying to time their exit right now, play "safe" and exit at 650 or risk a little more an exit at 750. Many thinking things will eventually stabilize at 500 to 600, like the year spent at 250 to 300, same block reward for miners despite the halving to keep the hardware online.
The context of this discussion involved tx velocity and throughput. Sure, I agree that speculation is one of bitcoins killer apps, but bag holders don't place much tx pressure onchain when they sell a few coins once a year with a single tx to send them to an exchange so I don't know where you are going with this discussion being that you were insinuating Bitcoin needed to have a higher tps than VISA because a few early investors dump some coins once a year.
Disinflationary - You keep on using that word. How about instead of trying to mislead people you just write "deflation"? You can't? The rubes would catch on and not add to the pyramid scheme?
The entire thing is a scam baited for geeks and really pisses me off.
I have been using the word "deflation". I have no reason to avoid using this word as it doesn't strike fear in my heart like it apparently does to you. It is a simple fact that bitcoin often behaves deflationary in the economy as the US dollar has lost 99.98 % against bitcoin in the last 6 years due to high demand and the fact that the minting supply is disinflationary. This isn't always the case however as you can see bitcoin behaved inflationary in 2014 due to a relatively high inflation minting rate of ~9%
99.9% of speculation and btc day trading happens offchain within exchanges though.
Doubtful. Leaving bitcoins in an exchange is universally considered high risk and that transferring the coins to your wallet is highly advised.
Although modern exchanges are regulated , insured and more secure I agree with you its typically not wise to leave you coins on an exchange. Regardless , my statement is 100% accurate because one cannot effectively daytrade if they are constantly removing their coins from exchanges. I don't daytrade but know a large part of the community who does and they don't often remove their assets.
You mean like Ethereum? Why not just jump ship from Bitcoin?
Ethereum has many problems besides its goals of switching to an untested and insecure proof of stake algo. It was largely premined , it is insecure , it won't scale, the halting problem and recursion will haunt it, its functionality can be replicated by bitcoin more securely, it lacks a network effect, most of the largest stakeholders can be targeted, they are planning on reversing the history and blacklisting thus removing immutability, ect..
Which is exactly what governments do with a fiat currency - adjust the availability of the currency to stabilize and moderate its value, to maintain a slight inflation rate.
And we've come full circle. The folks who rejected fiat currencies and advocated bitcoin have learned the lesson governments learned with gold eighty years ago, and are advocating changes to make it behave more like a fiat currency.
Bitcoins volatility is a fair criticism of it as a currency. Just keep in mind -
1) Bitcoin is becoming less volatile with each passing year
2) Bitcoin isn't just a currency, so even in the offchance it fails as a currency it can still be very valueable as a protocol, or asset class, or store of value , or just for the blackmarket , or.for smart contracts and an immutable ledger , or . ect..
3) Bitcoin is already more stable than certain fiat currencies, remember bitcoin only needs to be valuable to certain people , not all , for it to succeed
Deflation increases the wealth of the people holding the currency. In Bitcoin's case, an intentionally disinflationary currency was coupled to a ponzi scheme - the hope was that demand rises high enough for early adopters to make bank (which it did).
Bitcoin has always been expressly designed to favor the people who got bitcoins early. And it was just obvious enough to recruit people who thought themselves early.
Asking people to adopt it worldwide is like Parker Bros saying "We're gonna make Monopoly Money into a valid international currency. Yes, we are the only ones who have Monopoly Money in meaningful quantities. No, we won't be printing hardly any more, we want to protect our investment. It's actually nearly impossible to print it, we engineered it that way. If you want some, you have to give me something in return. But look how pretty it is!"
Don't worry, we do not need you to buy any bitcoin. I actually encourage you to avoid it until you understand it. There are enough of us that will continue to burn our fiat for more fungible currency to keep bitcoin growing. I will continue buying bitcoin even if I have to at 500k+ a bitcoin due to its utility alone. You don't really understand bitcoins utility if you believe if is merely dependent upon speculation, but perhaps in 4 to 8 years as bitcoin continues to grow in value you may scratch your head and revisit its value proposition (hint - paying a premium for fungibility for regulatory arbitrage). I encourage you to short bitcoin or just avoid it altogether until you understand why certain people depend upon bitcoin even to survive and that is what primarily gives it value.
Sweetheart, when a currency appreciates, that's deflation. You can say "disinflationary" all you want.
Yes , of course bitcoin is often acting deflationary(which is great) , but sometimes behaves inflationary based upon supply and demand. I am clearly making a distinction between minting (disinflationary) and how bitcoin behaves in the economy (sometimes inflationary and sometimes deflationary). There have been long periods of inflation as well. Take a look at 2014.
In the past the value of bitcoin was inherently tied to the production costs of bitcoin where there is a very narrow margin of profit above the minting costs from production.
What makes you think this has changed? The price has roughly doubled with a reward halving upcoming.
Today the cost of bitcoin production dropped from ~1.6 million per day to around 820k a day USD and the price remained the same.
No, bitcoin could switch from a proof of work system to a proof of ownership system. The problem with the later is the initial distribution of coins, but that is a problem for a new coin not an established coin that is already widely distributed.
There are many more problems with proof of stake than you imply. Take a look at the security concerns the Ethereum community has with a bad actor controlling a significant stake and their upcoming wishes to switch to proof of stake as an example.
Visa is not supporting a speculative investment scheme. Bitcoin is more analogous to high frequency wall street trading, not actual consumer transactions. Bitcoin is *currently* primarily a speculative investment scheme.
99.9% of speculation and btc day trading happens offchain within exchanges though.
Even among people who can afford hardware, there is a lot of effective consolidation because of 'pools'. These aren't irrational behavior: if you have a small amount of hashing capacity going it alone might pay off handsomely but will probably pay nothing, while pooling more or less guarantees a return proportional to your hashing capacity; but also leaves you largely at the mercy of the infrastructure.
While there are some valid concerns over pool mining centralization this is widely overblown concern due to 2 reasons. First is the fact that p2pool is only around 1% more inefficient than mining at the largest pool and removes these risks you suggest and there are many active members mining there and growing. Secondly it is trivial to point your hash rate at another pool and most miners automate this for uptime and other concerns.
The rapidly and falsely-rising 'value' of bitcoin tells me and anyone else that ever paid attention to economics that you're dead wrong.
Bitcoin is disinflationary from a minting or production perspective until the year 2140 and than inflation will slow to 0. It can behave either inflationary or deflationary within an economy as a matter of supply and demand. Right now there is ~2.34 million in inflation a day hitting the markets and within a few hour the inflation hitting the markets will be half that. If you need some evidence that bitcoin can act inflationary within the economy than just look at its capitulation during 2014 where inflation outpaced demand.
An inherently deflationary currency in a world that has experienced 300 years of continuous economic and population growth - what could possibly go wrong?
sPh
Bitcoin is Disinflationary from a production standpoint not deflationary. Whether bitcoin is deflationary or inflationary within the economy is simply a matter of supply and demand. If you are suggesting concerns with usability due to scarcity than have no fear as bitcoin can be divided by 8 decimal places and therefore even if each one is valued over 1 million a piece there will be plenty for everyone to use. Additionally, within layer 2 you can get even higher fractions of satoshis for more decimalization. Please clarify exactly the problem you are insinuating.
" there are other options that allow bitcoin to scale where "layer 2" payment channels that are onchain and secure can occur that will allow bitcoin to scale to over 100k txs per second"
That's pretty fucking slow, actually. Bitcoin won't be viable for shit until you can process a few million per second.
Visa averages around 2k tps (transactions per second) with daily peak rates of 4k tps , and a capacity of 56k tps. I like your optimism however , as you are probably suggesting that bitcoin needs much higher throughput than Visa for AI and machine to machine txs which I would agree. Don't worry, as the Lightning network will eventually be able to handle your demands - https://lightning.network/
Sell the equipment and resources to the miners, skim the illicit trade hidden from governments, and rob your clients blind as an exit strategy seems to be the result of Bitcoin operations. Are there _any_ bitcoin markets that show legitimate handling of client transactions for more than a few months without turning to direct theft from clients?
There is real value created in minting virgin bitcoins as it allows miners to trade an ASIC and electricity for heat and fungible currency. While there has indeed been some scamming ASIC manufactures "premining on ASIC's" while the clients wait on preorders, and there does indeed exist some fractional reserve cloud mining operations, a normal user can now buy an ASIC from several reputable manufactures , have it immediately delivered with no pre-order wait time, and expect a profit if their electrical costs are low. If they can recycle the waste heat than their profits will be even higher as well.
I've always said it was a pyramid scheme. For early miners it was very easy to mine and each score was bigger, but the system relied upon ever more people buying into the scheme to create value.
Bitcoin is disinflationary and has already reached a critical mass of users where there is absolutely no need for anyone else to adopt it. If more people adopt bitcoin , great, if not than bitcoin will continue to appreciate if the existing userbase finds value in its fungibility. Now here is a very important point to consider. Bitcoin primary value rests in the premium for fungibility over fiat. Thus bitcoin will always be useful for its existing userbase, or any new adopters, if regulations and states exist because one of the key value propositions with bitcoin is regulatory arbitrage. What this means is that the surest way to destroy the demand for bitcoin is to remove all fiat currency, states, and laws and regulations. Do you think this is ever going to happen?
Bitcoin: designed by a brilliant mathematician who had never read a macroeconomics textbook or intermediate-level survey.
sPh
From reading Satoshi Nakamoto writings it was clear that he had an extensive background in many schools of economics. You may disagree with Hayek and the Austrian school of economics, which is fine, but it is highly misleading to suggest that someone who doesn't agree with Keyenes isn't familiar with their economic hypotheses.
Also, Bitcoin, as it sits, is environmentally abusive. Increasing processing demands, higher costs, more energy wasted to make more coins and process transactions. Between that and the problem of a single entity winning a blockchain war, Bitcoin can never sustain. Better would be to re-write it with low processing for "minting" new coins, and centralize the creation of coins.
A centralized minting process would undermine the whole raison d'être of bitcoin, thus will never happen. While your fears are somewhat correct, they are outdated. In the past the value of bitcoin was inherently tied to the production costs of bitcoin where there is a very narrow margin of profit above the minting costs from production. Thus if bitcoin every did go mainstream than the electrical costs to mint such bitcoins would also similarly skyrocket.
Thus in the past there were 2 types of bitcoin txs: Onchain (real bitcoin txs , which are resource costly and limited and offchain txs, which are cheap, free to send, and unlimited but rely on a trusted third party thus not really bitcoin). Now with some new protocol developments (mutisig,CSV, CLTV, ect..) there are other options that allow bitcoin to scale where "layer 2" payment channels that are onchain and secure can occur that will allow bitcoin to scale to over 100k txs per second. The costs of minting will thus not need to exponentially increase(remember, bitcoin is disinflationary and in a few hours the electricity spent to secure the network will drop from ~1.6 million per day to around 820k a day USD) while the security and txs capacity increase under such a scenario.
With smaller players dropping out of the game, soon it might become a "single player" game after all.
Be aware there are also strong forces occuring that are pushing the decentralization of mining right now. Most principly hitting Moore's cliff with ASIC manufacturing will insure that newer generation ASICs only are slightly better than older generation ASICs.
can potentially disrupt the entire BitCoin economy by effectively "rewriting history".
This isn't true and not the consequences of a 51% attack. History cannot be re-written by a 51% attack as the amount of energy needed to ourun the longest chain with the most proof of work going several confirmations back is insurmountable. This is typically why the historical record of bitcoin txs are referred to as "immutable" . A 51% attack could potentially create double spends or prevent txs occurring in the present, not several confirmations past.
We might need a "reset", where ASIC is no longer viable, but I'm not sure that would still be possible.
This is of course possible and the code has already been written in the event of an unlikely attack from miners. This is unlikely to be needed however because there are both forces that drive centralization of mining and forces that drive decentralization of mining and a more likely outcome in the future is a mix of p2pool mining with some large industrial locations.
Slashdot Mirror
The mining computation should be changed to calculate for folding@home.
Bitcoins security model is dependent upon a PoW which must have a very granular difficulty adjustment where blocks are discovered on a Poisson Distribution curve. Searching for primes or folding@home would not fulfill this requirement. Additionally, It is necessarily wasteful as part of bitcoins security model due to the fact that real costs must be sunk into attacking the currency instead of simply bootstrapping it to some other task you would be doing anyways for no added cost.
The great news is that most mining these days is using unused excess hydroelectric from Chinese dams and the heat can be recycled. Additionally, the "wasted" energy need not scale with the price of bitcoin as originally expected due to the fact that payment channels can heavily subsidize block reward with tx fees and the security of the network will depend both upon decentralized LN nodes being subsidized(which use practically no electricity) by sharing tx fees with miners
If this holds true, who would ever want to spend bitcoin for anything?So bitcoin mining would be pointless if there will be fewer and fewer transactions. People just want to buy and hold. Unless what they buy will not appreciate. Then they dump and run. That makes bitcoin mining pointless because bitcoins wouldn't be worth anything.
All this fear could dissipate if bitcoin mining were to calculate useful results. People would be encouraged to use bitcoin in their lives because the mining actually benefits everyone.
This is an often repeated fear from Keynesian economists that high deflation will cause hoarding and a "deflationary death spiral in bitcoin" , The data shows the opposite, during periods of high appreciation(deflationary adoption bubbles) bitcoin users give more to charity and spend more on goods and services. This is thought to be because of the wealth effect , where users feel more comfortable spending because they feel more wealthy due to them being wealthier in reality. This is also similar to purchasing a laptop that will become obsolete in 6months to 1 year, one always knows the next model will be released in the future but realizes they still need a laptop now and will spend the money regardless.
That makes bitcoin mining pointless because bitcoins wouldn't be worth anything.
Have you seen the price lately? Please check the 8 year returns , 1 year returns , and 1 week returns. Bitcoin stopped being simply used for speculation a very long time ago and now is has a circular economy of users who have an inelastic demand that need bitcoin to survive. Yes, plenty of speculating (when did saving money become such a naughty word?) , but the real life utility is undeniable as well for whitemarket or blackmarket use cases.
A Block chain database would only be as secure and fair as the security behind it. Thus only public blockchains with proof of work would qualify. Bitcoin is the most secure example to date. You could indeed use colored coins, counterparty, sidechains or other layers to create an immutable voting ledger within bitcoin but I wouldn't want to create an incentive to begin to attack bitcoin anymore as is, and with presidential candidates spending over a billion dollars on campaigns I would be a little worried they may try to manipulate the open source development process or play other games to weaken security. Thus we would want bitcoin to mature a bit before serving any such purpose.
Cash for in person and bitcoin for online. Alphabay has much better quality and service than what you can find in person.#fungibility
Decentralized Torrent tracker where seeders and uploaders are rewarded with bitcoin and he takes a small cut. This will at least fill in the gaps of missing content that is hard to find on piratebay and lack seeders. Should be another great use case for bitcoin along with gambling/speculating, dark market drugs sales, prostitutes, ransomware, and regulatory arbitrage of giftcards/amzn points.
So you are saying Bitcoin has an bright future because it serves as a very important role for a specific demographic of wealthy people?
How do you turn bitcoin back into cash or gold without a paper trail?
Certain ATMs don't have KYC, but the better way to anonymously sell your bitcoin is with either localbitcoins https://localbitcoins.com/ or mycelium localtrader https://mycelium.com/lt/help.h... in person. This also makes it easy to quickly transfer bitcoin where you don't have to wait for confirmations - https://opendime.com/
Actually you are mistaken because you assume the speculation is day trading. Many speculators are holding coins for longer than hours, waiting for big changes like the one we have recently experienced. Many are probably trying to time their exit right now, play "safe" and exit at 650 or risk a little more an exit at 750. Many thinking things will eventually stabilize at 500 to 600, like the year spent at 250 to 300, same block reward for miners despite the halving to keep the hardware online.
The context of this discussion involved tx velocity and throughput. Sure, I agree that speculation is one of bitcoins killer apps, but bag holders don't place much tx pressure onchain when they sell a few coins once a year with a single tx to send them to an exchange so I don't know where you are going with this discussion being that you were insinuating Bitcoin needed to have a higher tps than VISA because a few early investors dump some coins once a year.
Disinflationary - You keep on using that word. How about instead of trying to mislead people you just write "deflation"? You can't? The rubes would catch on and not add to the pyramid scheme? The entire thing is a scam baited for geeks and really pisses me off.
I have been using the word "deflation". I have no reason to avoid using this word as it doesn't strike fear in my heart like it apparently does to you. It is a simple fact that bitcoin often behaves deflationary in the economy as the US dollar has lost 99.98 % against bitcoin in the last 6 years due to high demand and the fact that the minting supply is disinflationary. This isn't always the case however as you can see bitcoin behaved inflationary in 2014 due to a relatively high inflation minting rate of ~9%
99.9% of speculation and btc day trading happens offchain within exchanges though.
Doubtful. Leaving bitcoins in an exchange is universally considered high risk and that transferring the coins to your wallet is highly advised.
Although modern exchanges are regulated , insured and more secure I agree with you its typically not wise to leave you coins on an exchange. Regardless , my statement is 100% accurate because one cannot effectively daytrade if they are constantly removing their coins from exchanges. I don't daytrade but know a large part of the community who does and they don't often remove their assets.
You mean like Ethereum? Why not just jump ship from Bitcoin?
Ethereum has many problems besides its goals of switching to an untested and insecure proof of stake algo. It was largely premined , it is insecure , it won't scale, the halting problem and recursion will haunt it, its functionality can be replicated by bitcoin more securely, it lacks a network effect, most of the largest stakeholders can be targeted, they are planning on reversing the history and blacklisting thus removing immutability, ect..
Which is exactly what governments do with a fiat currency - adjust the availability of the currency to stabilize and moderate its value, to maintain a slight inflation rate. And we've come full circle. The folks who rejected fiat currencies and advocated bitcoin have learned the lesson governments learned with gold eighty years ago, and are advocating changes to make it behave more like a fiat currency.
Bitcoins volatility is a fair criticism of it as a currency. Just keep in mind -
1) Bitcoin is becoming less volatile with each passing year
2) Bitcoin isn't just a currency, so even in the offchance it fails as a currency it can still be very valueable as a protocol, or asset class, or store of value , or just for the blackmarket , or.for smart contracts and an immutable ledger , or . ect..
3) Bitcoin is already more stable than certain fiat currencies, remember bitcoin only needs to be valuable to certain people , not all , for it to succeed
Deflation increases the wealth of the people holding the currency. In Bitcoin's case, an intentionally disinflationary currency was coupled to a ponzi scheme - the hope was that demand rises high enough for early adopters to make bank (which it did).
Bitcoin has always been expressly designed to favor the people who got bitcoins early. And it was just obvious enough to recruit people who thought themselves early.
Asking people to adopt it worldwide is like Parker Bros saying "We're gonna make Monopoly Money into a valid international currency. Yes, we are the only ones who have Monopoly Money in meaningful quantities. No, we won't be printing hardly any more, we want to protect our investment. It's actually nearly impossible to print it, we engineered it that way. If you want some, you have to give me something in return. But look how pretty it is!"
Don't worry, we do not need you to buy any bitcoin. I actually encourage you to avoid it until you understand it. There are enough of us that will continue to burn our fiat for more fungible currency to keep bitcoin growing. I will continue buying bitcoin even if I have to at 500k+ a bitcoin due to its utility alone. You don't really understand bitcoins utility if you believe if is merely dependent upon speculation, but perhaps in 4 to 8 years as bitcoin continues to grow in value you may scratch your head and revisit its value proposition (hint - paying a premium for fungibility for regulatory arbitrage). I encourage you to short bitcoin or just avoid it altogether until you understand why certain people depend upon bitcoin even to survive and that is what primarily gives it value.
"Continue to appreciate"
Sweetheart, when a currency appreciates, that's deflation. You can say "disinflationary" all you want.
Yes , of course bitcoin is often acting deflationary(which is great) , but sometimes behaves inflationary based upon supply and demand. I am clearly making a distinction between minting (disinflationary) and how bitcoin behaves in the economy (sometimes inflationary and sometimes deflationary). There have been long periods of inflation as well. Take a look at 2014.
In the past the value of bitcoin was inherently tied to the production costs of bitcoin where there is a very narrow margin of profit above the minting costs from production.
What makes you think this has changed? The price has roughly doubled with a reward halving upcoming.
Today the cost of bitcoin production dropped from ~1.6 million per day to around 820k a day USD and the price remained the same.
No, bitcoin could switch from a proof of work system to a proof of ownership system. The problem with the later is the initial distribution of coins, but that is a problem for a new coin not an established coin that is already widely distributed.
There are many more problems with proof of stake than you imply. Take a look at the security concerns the Ethereum community has with a bad actor controlling a significant stake and their upcoming wishes to switch to proof of stake as an example.
Visa is not supporting a speculative investment scheme. Bitcoin is more analogous to high frequency wall street trading, not actual consumer transactions. Bitcoin is *currently* primarily a speculative investment scheme.
99.9% of speculation and btc day trading happens offchain within exchanges though.
https://www.youtube.com/watch?...
Even among people who can afford hardware, there is a lot of effective consolidation because of 'pools'. These aren't irrational behavior: if you have a small amount of hashing capacity going it alone might pay off handsomely but will probably pay nothing, while pooling more or less guarantees a return proportional to your hashing capacity; but also leaves you largely at the mercy of the infrastructure.
While there are some valid concerns over pool mining centralization this is widely overblown concern due to 2 reasons. First is the fact that p2pool is only around 1% more inefficient than mining at the largest pool and removes these risks you suggest and there are many active members mining there and growing. Secondly it is trivial to point your hash rate at another pool and most miners automate this for uptime and other concerns.
"Bitcoin is disinflationary"
The rapidly and falsely-rising 'value' of bitcoin tells me and anyone else that ever paid attention to economics that you're dead wrong.
Bitcoin is disinflationary from a minting or production perspective until the year 2140 and than inflation will slow to 0. It can behave either inflationary or deflationary within an economy as a matter of supply and demand. Right now there is ~2.34 million in inflation a day hitting the markets and within a few hour the inflation hitting the markets will be half that. If you need some evidence that bitcoin can act inflationary within the economy than just look at its capitulation during 2014 where inflation outpaced demand.
An inherently deflationary currency in a world that has experienced 300 years of continuous economic and population growth - what could possibly go wrong?
sPh
Bitcoin is Disinflationary from a production standpoint not deflationary. Whether bitcoin is deflationary or inflationary within the economy is simply a matter of supply and demand. If you are suggesting concerns with usability due to scarcity than have no fear as bitcoin can be divided by 8 decimal places and therefore even if each one is valued over 1 million a piece there will be plenty for everyone to use. Additionally, within layer 2 you can get even higher fractions of satoshis for more decimalization. Please clarify exactly the problem you are insinuating.
" there are other options that allow bitcoin to scale where "layer 2" payment channels that are onchain and secure can occur that will allow bitcoin to scale to over 100k txs per second"
That's pretty fucking slow, actually. Bitcoin won't be viable for shit until you can process a few million per second.
Visa averages around 2k tps (transactions per second) with daily peak rates of 4k tps , and a capacity of 56k tps. I like your optimism however , as you are probably suggesting that bitcoin needs much higher throughput than Visa for AI and machine to machine txs which I would agree. Don't worry, as the Lightning network will eventually be able to handle your demands - https://lightning.network/
Sell the equipment and resources to the miners, skim the illicit trade hidden from governments, and rob your clients blind as an exit strategy seems to be the result of Bitcoin operations. Are there _any_ bitcoin markets that show legitimate handling of client transactions for more than a few months without turning to direct theft from clients?
There is real value created in minting virgin bitcoins as it allows miners to trade an ASIC and electricity for heat and fungible currency. While there has indeed been some scamming ASIC manufactures "premining on ASIC's" while the clients wait on preorders, and there does indeed exist some fractional reserve cloud mining operations, a normal user can now buy an ASIC from several reputable manufactures , have it immediately delivered with no pre-order wait time, and expect a profit if their electrical costs are low. If they can recycle the waste heat than their profits will be even higher as well.
I've always said it was a pyramid scheme. For early miners it was very easy to mine and each score was bigger, but the system relied upon ever more people buying into the scheme to create value.
Bitcoin is disinflationary and has already reached a critical mass of users where there is absolutely no need for anyone else to adopt it. If more people adopt bitcoin , great, if not than bitcoin will continue to appreciate if the existing userbase finds value in its fungibility. Now here is a very important point to consider. Bitcoin primary value rests in the premium for fungibility over fiat. Thus bitcoin will always be useful for its existing userbase, or any new adopters, if regulations and states exist because one of the key value propositions with bitcoin is regulatory arbitrage. What this means is that the surest way to destroy the demand for bitcoin is to remove all fiat currency, states, and laws and regulations. Do you think this is ever going to happen?
Bitcoin: designed by a brilliant mathematician who had never read a macroeconomics textbook or intermediate-level survey.
sPh
From reading Satoshi Nakamoto writings it was clear that he had an extensive background in many schools of economics. You may disagree with Hayek and the Austrian school of economics, which is fine, but it is highly misleading to suggest that someone who doesn't agree with Keyenes isn't familiar with their economic hypotheses.
Also, Bitcoin, as it sits, is environmentally abusive. Increasing processing demands, higher costs, more energy wasted to make more coins and process transactions. Between that and the problem of a single entity winning a blockchain war, Bitcoin can never sustain. Better would be to re-write it with low processing for "minting" new coins, and centralize the creation of coins.
A centralized minting process would undermine the whole raison d'être of bitcoin, thus will never happen. While your fears are somewhat correct, they are outdated. In the past the value of bitcoin was inherently tied to the production costs of bitcoin where there is a very narrow margin of profit above the minting costs from production. Thus if bitcoin every did go mainstream than the electrical costs to mint such bitcoins would also similarly skyrocket .
Thus in the past there were 2 types of bitcoin txs: Onchain (real bitcoin txs , which are resource costly and limited and offchain txs, which are cheap, free to send, and unlimited but rely on a trusted third party thus not really bitcoin). Now with some new protocol developments (mutisig,CSV, CLTV, ect..) there are other options that allow bitcoin to scale where "layer 2" payment channels that are onchain and secure can occur that will allow bitcoin to scale to over 100k txs per second. The costs of minting will thus not need to exponentially increase(remember, bitcoin is disinflationary and in a few hours the electricity spent to secure the network will drop from ~1.6 million per day to around 820k a day USD) while the security and txs capacity increase under such a scenario.
With smaller players dropping out of the game, soon it might become a "single player" game after all.
Be aware there are also strong forces occuring that are pushing the decentralization of mining right now. Most principly hitting Moore's cliff with ASIC manufacturing will insure that newer generation ASICs only are slightly better than older generation ASICs.
can potentially disrupt the entire BitCoin economy by effectively "rewriting history".
This isn't true and not the consequences of a 51% attack. History cannot be re-written by a 51% attack as the amount of energy needed to ourun the longest chain with the most proof of work going several confirmations back is insurmountable. This is typically why the historical record of bitcoin txs are referred to as "immutable" . A 51% attack could potentially create double spends or prevent txs occurring in the present, not several confirmations past.
We might need a "reset", where ASIC is no longer viable, but I'm not sure that would still be possible.
This is of course possible and the code has already been written in the event of an unlikely attack from miners. This is unlikely to be needed however because there are both forces that drive centralization of mining and forces that drive decentralization of mining and a more likely outcome in the future is a mix of p2pool mining with some large industrial locations.