Ok, maybe I don't get how difficulty works. I thought it could only monotonically increase.
I suspect that you don't get how mining works at all.
Topic: A future of high transaction fees? - page 2. (Read 1919 times)
I suspect that you don't get how mining works at all.
Ok, maybe I don't get how difficulty works. I thought it could only monotonically increase.
if mining is not profitable,people turn off the miners,if that happens difficulty decreases,so it will only mine the people who have the most efficient minersbesides,we hope that when reward decreases,the price has already gone up to cover a good marketcap
Ok, maybe I don't get how difficulty works. I thought it could only monotonically increase.
Fewer miners means longer confirmation times.
This statement is completely wrong. Confirmation times do not depend on the number of miners or their hashing power.
Not completely wrong, confirmation time will be slowed until the next difficulty adjustment. If the adjustment is drastic, confirmation time might be slowed for over a month. This slowness of confirmation time is well observed among altcoins, sometime they go months without a single confirmation due to sudden drop from high difficulty to nearly no difficulty.
The same thing will happen to Bitcoin, if for example the price suddenly drops to $10. PoW mining has many weaknesses like these.
Fewer miners means longer confirmation times.
This statement is completely wrong. Confirmation times do not depend on the number of miners or their hashing power.
Difficulty CAN decrease if the rate drops.
It most certainly can. I'm not sure why the OP thinks otherwise.
Exactly, this is why I think bitcoin can survive any potential problems that gets thrown at it. I'm sure it will all work out in the end, but we must remember that bitcoin is still essentially an experiment.
miners dont just make coins to sell to then pay electric companies.
i wont repeat myself as this keeps being discussed at length across many topics. so ill paste my response
anyome mining this month with the mindset to sell out to pay this months fiat lifestyle, will lose out.. and to be honest, thy dont understand bitcoin, thus im half glad that they will give up. as for the smart ones. they will continue
i wont repeat myself as this keeps being discussed at length across many topics. so ill paste my response
miners are HOARDING not selling. the reason:
if i had $10million and wanted bitcoin. i cant simply throw it into a crappy exchange and buy coins(amlkyc flags and alerts will go mad). so i buy rigs and pay my electric with the $10mill. and keep the coins.
anyone selling bitcoins after mining are dumb, and definitely not bitcoin investors.. infact you should treat them as electric company investors as the end result is no bitcoins, no fiat. and only a piece of paper that says they paid a large amount of money to an electric company.
so if your one of these people cashing out over 50% of your hoard... slap yourself with a wet fish and change your mindset
for miners. out of the 3600 coins produced a day, estimates are that only 600 is cashed out to fiat. the rest is hoarded. and of that 600 cashed out very little of it is done on the public crappy exchanges.
example of 2 separate miners on different block rewards
https://blockchain.info/address/19vvtxUpbidB8MT5CsSYYTBEjMRnowSZj4
~6000 coins earned from mining
~5000 coins NOT SPENT
https://blockchain.info/address/1GcF7j3YH8Qs8hvNEe7zbrQZftMU6sRLfu
~5000 coins earned from mining
~3500 coins not spent
if i had $10million and wanted bitcoin. i cant simply throw it into a crappy exchange and buy coins(amlkyc flags and alerts will go mad). so i buy rigs and pay my electric with the $10mill. and keep the coins.
anyone selling bitcoins after mining are dumb, and definitely not bitcoin investors.. infact you should treat them as electric company investors as the end result is no bitcoins, no fiat. and only a piece of paper that says they paid a large amount of money to an electric company.
so if your one of these people cashing out over 50% of your hoard... slap yourself with a wet fish and change your mindset
for miners. out of the 3600 coins produced a day, estimates are that only 600 is cashed out to fiat. the rest is hoarded. and of that 600 cashed out very little of it is done on the public crappy exchanges.
example of 2 separate miners on different block rewards
https://blockchain.info/address/19vvtxUpbidB8MT5CsSYYTBEjMRnowSZj4
~6000 coins earned from mining
~5000 coins NOT SPENT
https://blockchain.info/address/1GcF7j3YH8Qs8hvNEe7zbrQZftMU6sRLfu
~5000 coins earned from mining
~3500 coins not spent
anyome mining this month with the mindset to sell out to pay this months fiat lifestyle, will lose out.. and to be honest, thy dont understand bitcoin, thus im half glad that they will give up. as for the smart ones. they will continue
Difficulty CAN decrease if the rate drops.
Very likely
Everybody knows that eventually, when all the coins have been mined, there will only be transaction fees to sustain blockchain formation, but is that day coming sooner than anticipated?
Back last December when the price was at $1200 miners were going nuts trying to buy equipment and get ASICs going and now we have it: huge farms of ASIC driving the difficulty relentlessly higher. The problem with this is that if the price falls, say down to $200 or whatever, equipment and electricity costs for some miners may no longer be feasible and they will have to turn out the lights. This will leave a smaller pool of miners around. Even for this pool, however, the difficulty does not decrease, it only increases.
So, what that this means is that they have to run their machines just as hard or harder to get a $200 bitcoin as they used to get a $1200 bitcoin. Any economist can tell you what will happen: there will be a lot fewer miners. Fewer miners means longer confirmation times. We potentially face a situation where to get a transaction done in a reasonable amount of time will require adding a transaction fee, possibly a large one.
On one hand this has the potentially positive effect of eliminate nuisance, or spam, transactions. On the other hand it may also lead to Bitcoin becoming a "merchant" currency which is only used for large transactions.
Back last December when the price was at $1200 miners were going nuts trying to buy equipment and get ASICs going and now we have it: huge farms of ASIC driving the difficulty relentlessly higher. The problem with this is that if the price falls, say down to $200 or whatever, equipment and electricity costs for some miners may no longer be feasible and they will have to turn out the lights. This will leave a smaller pool of miners around. Even for this pool, however, the difficulty does not decrease, it only increases.
So, what that this means is that they have to run their machines just as hard or harder to get a $200 bitcoin as they used to get a $1200 bitcoin. Any economist can tell you what will happen: there will be a lot fewer miners. Fewer miners means longer confirmation times. We potentially face a situation where to get a transaction done in a reasonable amount of time will require adding a transaction fee, possibly a large one.
On one hand this has the potentially positive effect of eliminate nuisance, or spam, transactions. On the other hand it may also lead to Bitcoin becoming a "merchant" currency which is only used for large transactions.
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