Topic: $5000 per coin will never happen if PoW mining is allowed to continue - page 5. (Read 10107 times)

You probably don't know this, but alot of bitcoin miners only sell a portion of their holdings.

+1

And.... kokojie... I don't see how you can possibly think the cost of mining will be 10% per year.  It will soon be 5% per year, then 2% etc. etc., as far as the block subsidy.  And as for fees... no one knows how that will play out.  Not you, not me, not anyone.

I kinda feel like I shouldn't even be posting in this thread.  I don't like to dignify trolling.

The free market will adjust as necessary.

PoW does have a benefit to the eco-system. In the event of a total system compromise, the PoW built into the block chain allows us to pick up the pieces: with some confidence that the block-chain history was not tampered with in unpredictable ways.

Bitcoin is still an experiment: designed to prove whether a secure network application is even possible with the current state of technology.

Getting rid of miners, more efficiency to grow the "economy", sounds great.

Also, don't forget under PoS system, behind each stakeholder, there's a needy wife, spoiled children, expensive mortgage, luxury lifestyle, etc ... when our economy grows, they all become big drain because those rich bastards will cash out. Let's get rid of them (or their "stakes") also.

Oh wait, I think I just found out the answer, it's called inflation, a.k.a dilution, wonderful, isn't it?

Except when competition drives mining farms to use free/renewable energy solutions with sunk costs and selling the heat as a product as a means to compete against other farms those externalities are eliminated besides ASIC research and Renewable energy research. Both categories that are great to invest in as a society.

Additionally, lets not forget all the security benefits PoW supplies... ohh wait, DPoS is more secure, right? I didn't just witness one developer strong-arming all the delegates into dilution.

Wasn't you that claimed we would never see more than 2 billion BTSX because unlike bitcoin it was truely deflationary? One month later and now you are on board with inflationary currencies...interesting how quickly your mind is changed with such a foundational concept.

Additionally, as I understand it, part of the dilution of half a billion is for the vote on dev and marketing that will be made with the new VOTE DAC, thus the merger will indeed directly be allocating funds that you get to indirectly decide how they are spent, but will be going towards devs ultimately.

Yes, there is a network effect of bitcoin. However if you hold ideological beliefs that the underlying rules of bitcoin are illogical/immoral/unethical/unoptimal, the vasly superior altcoin may simply be the coin that adopts Hayek money and demurrage to manage the money supply in a more human-friendly way.

The longest chain work over time will be the coin that feeds the hearts and minds of the the largest population, as that population has a larger capacity to do work. So maybe that chain is a hard-fork of bitcoin that changes the money supply by implementing proof-of-stake, but to claim your stake reward you have to view advertisements from our sponsor(s) first.

To illustrate the point, if bitcoin mining asic vendors start automating the process of designing new sha256 miners, and eventually we have self-replicating solar powered bitcoin mining farms in the desert or in orbit, bitcoin makes sense as the currency of the miners, but it stops to make sense for humans, because there's no human effort work required anymore. If you are a supplier of something those farms need, bitcoin is great, otherwise, humans need to eat food, and food-backed currencies (or at least the blockchains the farmers use) are going to have the largest human-work value chains.

Ok, well, you're misunderstanding the effect that the cost of PoW has on the transaction price of bitcoins. It's true that PoW costs more as the price of bitcoins rise, since what is paid toward PoW is mostly tied to inflation, but once bitcoins are not inflating anymore this relationship won't be true. Also, the inflation rate is a flat %, we know exactly by how much PoW can reduce the price of bitcoins every year, ceteris paribus.

There is no reason why the price of bitcoins can't rise faster than they are being diluted due to inflation.

Now then, putting that aside and looking at PoW as if it was just a fee attached to transactions, and a constant burden on the network. This is not a constant drain on the exchange rate of bitcoins.

A better analogy would be a toll for using a bridge. Does the bridge lose value every time someone crosses it? Of course not, the exact opposite is true. The toll helps to upkeep the value of the bridge, it enhances economic output of the people that use the bridge, so they willingly consent to paying the toll.

Similarly, paying fees to support PoW does not drain away the resources of the economy until it fizzles away. Economies are not zero-sum games. PoW is necessary infrastructure so that it's users can benefit from what the system provides, in precisely the same way that people pay tolls to benefit from a bridge. You gain more value by paying a fee while using bitcoins then you lose, or else you wouldn't make the transaction.

Sure, but it can't come to a distributed consensus.

https://download.wpsoftware.net/bitcoin/pos.pdf
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2393940

PoW mining is transferring value to outside of the eco-system, with ZERO benefit to the eco-system. PoS is fully capable of processing transactions for nearly no cost.

Community voting to pay dev team to support development, is directly benefiting the eco-system. Also it's a rather static cost, it doesn't grow as a function of the marketcap, like PoW mining expense does.

There's your comparison.

That is your speculation, I don't agree with it. I think the merger could have happened with or without VOTE. There has been a lot of talks of AGS/PTS merging into BTS previously, this is just such proposal coming true, and I fully support the merger as a AGS/PTS holder.

Now that you have conceded to a longterm and constant payout to support Bitshares dev and marketing how do you compare the costs of mining to your costs of constant dilution to support dev and marketing?

For some odd reason you cannot grasp the concept that VOTE is not only the mechanism to insure the devs get paid but also the leverage used to insure that the merger goes through. As daniel said himself:


If Vote was not implemented to insure dilution to pay for future development costs it would compete against BTSX as a separate DAC.

The merger itself is more about marketing and development funding through the existing stakeholder userbase and far less about confusion.

Your "big pile of money" analogy is actually pretty accurate. PoW mining drains away $500 million of that money each year, therefore $500 million new money must be added, in order to just maintain the size of the "pile" (Bitcoin price).

Also even when large amount of new money is added, PoW mining grows with it, like I explained, PoW expense is a function of Bitcoin marketcap. When Bitcoin price rises, PoW expense will grow and drag it down.

Getting back to the actual topic, why do you think PoW would prevent bitcoin from reaching $5000?

From what I understand, you seem to think that a currency is like a big pile of money, and the overhead drains away all the money until the currency isn't worth anything anymore. Is that about right?

Then your claim is wrong, there is no extra pay to the developer in the merger itself, YES?

I am well aware that, with community approval, VOTE can be used to pay the dev team for ongoing development, and I already previously stated I support it:
"I have no problem with sensible ongoing funding to the dev team, Bitcoin is paying $500 million each year to miners/pools/hardware vendor/electric company. Why would I object funding the Bitshare dev team? I could tell you right now, it's costs way less than $500 million for sure."

That is not how it works, and not how I explained it. 3% VOTE is the share distribution everyone gets upon the merger. The reason why VOTE is critical is because it is a important mechanism to incentive and coerce existing stakeholders into making such changes. Funds for the dev team will be supported by votes with this new mechanism which will allow for crowdfunding this new capital or further dilute supply in order to maintain payroll for dev and marketing.

How many different ways do I have to explain this very simple concept?

Halving does nothing to the PoW expense, I have explained the PoW expense is a function of Bitcoin marketcap.

After the 1st halving, the PoW expense actually increased significantly. Therefore, your theory is invalid.

I don't want any crazy Bitcoin price, but I legitimately think without PoW, we would be most likely close to $5000 per coin now. We have spent a lot of money on PoW in the past 5 years.

Well this is ridiculous. It's not like we can just push a hardfork tomorrow and force everyone to adopt it. Removing PoW mining right now is virtually impossible. Attempting to remove it in a year or two will be impossible!
This is what coin halving is all about. Why are you so impatient? Do we need Year 1 5000$, year 2 10 000$, year 3 100 000$??

What kind of fool would post a new topic on the forum every time they hear a unproven rumor from you? my post count at bitshares forum would be over a thousand by now if I did that.

Show me the proof that 3% VOTE will entirely pay to the dev team as you claimed, or shut the hell up.