Topic: difficulty too high while bitcoin society too small - page 8. (Read 31377 times)

Bitcoin has to use something to distribute the incentive.  "Satoshi" chose Hash/s, and that's pretty reasonable.  If you wanted to eliminated GPUs from the equation, you could probably write a Bitcoin clone (PersonCoin) that rewards based on an updated list of cost of resource (hash, storage, bandwidth etc.) that you believe optimised for an individual, and charge a tax for updating the list of standards.

I can't wait to see it!

You have to realize this is incorrect. Look at the mining forums and see all the new posts made by new forum users asking how to mine.

I suppose GPU are the breakers of bitcoin society.

Once each average Joe is able to use ATI GPUs for mining, his Mhash/s power jumped up in roughly 100 times!

So, when one new GPU average Joe comes to the game field, it equal to 100 old, CPU average Joes.

Then, other 10 000 Joes bought ATI GPUs in SHORT time period - and because, difficulty-doubling interval is FEW days for now.

So, 10 000 CPU average Joes become 10 000 ATI GPU average Joe, while almost zero NEW average Joes come to the field. Don't matter, if CPU Joes become GPU Joes, or CPU Joes left the filed, and new GPU come in.

Now, to keep profit for individual miner the same, we need hardware, 100 times stronger than typical ATI GPU.

But this is impossible: supercomputers belong to large companies such as IBM, etc. not to individual average Joes.
-------------------------------------------------------------------------
Bitcoin algorithm is excellent in idea, but just is not normalized properly - for 1 000 000 miners in the field,
NOT for 1 block generation per unit time (10min)!

There is a delay between price increase and new miners. You can't just magically turn on new hardware, you have to buy it, wait for it to arrive, and build it. The increase we are seeing now probably has something to do with Bitcoins hitting $9 USD each a little while ago. If the price continues down or remains steady, eventually mining will taper off or remain steady as well.

Old miners will leave the field, when it's no longer profitable to them. Are you suggesting they have an unfair advantage? I'm so tired of hearing that. The first person with the wheel had an unfair advantage too, it doesn't mean the wheel is a bad tool.

And who said Bitcoin has to mirror gold? That's just an example.

Yes, Bitcoin is a risky investment until millions have invested, even then there is risk. What is your point? You want a risk free investment? Me too! Let me know when you find it.

rezin777, bitterTea

you say right things but you DO NOT compute numbers!

Of course, mining is profitable, otherwise difficulty will decrease!

Compute profit, for example by

http://www.alloscomp.com/bitcoin/calculator.php

- How mining profit decreases TWICE in FEW days?! Despite $/BTC is still rising in average.
- How it takes place while just 10 000 miners & 10 000 acceptors in the game field?!
- How it takes place while just 1/3 of total gold is mined?!

Old miners NEVER leave the field, so profit will fall VERY close to zero, in FEW weeks,
according to current difficulty rate.

Bitcoin's economical behaviour is NOT similar to real gold one!

And trust to bitcoin is tiny while bitcoin society is tiny.

Bitcoin is like an UFO, not Gold.

I was really hoping that you had a better understanding of all this by now.

Mining will just cease to be important after 2012.

We don't really need a lot of miners. We only need the network to agree on a valid block chain, and the deeper I look into this problem, the more it looks like it can be solved with very few miners.

I just hope that spending by rich BTC holders will commence in a smooth fashion at increasing market size, so the pre-2011 coins don't disturb the economy because of being controlled by too few people. Let's just hope that the early adopters use their coins wisely, or give them away slowly.

Mining... get over it. Over a quarter of it is done, and the rest will be distributed over a huge network. Now, we are getting an increasingly good configuration, with the mined coins spread over many people.

Mining is completely tangential to the acceptance of Bitcoin. Mining serves a valuable purpose, which is to secure the network against attack. But the initial money must come from somewhere, so a subsidy was added - when you find a block you can reward yourself with 50 BTC.

This has almost nothing to do with the use of Bitcoin as a money.


Mining is profitable, otherwise difficulty would decrease.


What are you talking about? Perhaps you would be better off discussing this on a forum of your native language?

What you seem to want, world-wide acceptance of Bitcoin, and the security that comes with it (I can trust Bitcoins because everyone uses them), is impossible to achieve instantly (or even very quickly) without a world-wide government to enforce it.

So, do you want to be forced to use Bitcoins? I didn't think so.

So, accept the fact that Bitcoin has to grow before it is a stable / secure currency. It can not grow from a calf to a whale overnight. It takes time.

If you are afraid that it won't grow, even though many signs are pointing in the other direction, feel free to avoid using Bitcoin. No one is forcing you.

Increasing difficulty means the computational power of the network is increasing. When the computational power of the network increases, Bitcoin is less susceptible to attack. If Bitcoin is more secure, it's more secure for every potential user of Bitcoin, not just the people currently using it.

Finally, you don't have to mine to use Bitcoin. No one is guaranteeing that mining will be profitable either. Nor should they. The other thing you seem to want, fantastic free money for everyone who wants to grab it, is a fairytale. It occurs, but it doesn't last, because everyone realizes there is fantastic free money for everyone who wants to grab it, and they grab it! Which is why the difficulty will continue to go up until mining is barely profitable.

For me, average Joe, trust is just acceptance world-wide. If there is no good acceptance - only 10 000 people world-wide, let me mine bitcoins with my average Computer!

Then I decide myself, what I prefer - keep BTC, or output $.

small bitcoin society & unprofitable mining - no trust. it so simple.

what about strong cryptography - let geeks to headache about.

Also good argument. Above, I was mixing two notions - profit in dollars, and profit in bitcoins. I hope wether you detect this.

Of course, if we allow some 1 000 000 people to mine profitably in bitcoins, $/BTC ratio will fall down.
That is situation with 1 000 000 new miners attracted somewhat similar to situation you mentioned above.

But somewhat not similar - if other average Joes see, that 1 000 000 people already trust in bitcoin, it will keep $/BTC at high positions!

Despite, you still do not understand my accent:
________________________________________
NOT profit in dollars is matter. FEW days time interval of difficulty-doubling IS matter WHILE there are 10 000 players worldwide in the field only, AND just 1/3 of total bitcoins are mined.
________________________________________

To verify the danger, simply replace bitcoin by real gold: INDIVIDUAL real-gold miners WERE ABLE to mine real gold profitably FOR YEARS.
Was Real-gold mining difficulty being increased TWICE in the FEW DAYS?! Not $/gold exchange ratio, but difficulty of mining gold?!

It increases security of every bitcoin holder's currency as it makes the bitcoin transaction record more difficult to attack. This element increases trust.


What exactly do you mean by "trust" here? Trust that any bitcoins you acquire will be safe from theft/hacking? That they won't devalue due to inflation?

Then why are you still here? Go try to find some other get-rich-quick scheme. Bitcoin is not.

Actually, mining is much more profitable now than when bitcoin was only worth 80 cents (and difficulty was about 95000)... So this whole "early adoption" idea falls a bit short.

I wrote about this too - difficulty increases trust just for you, first 10 000 mining geeks.

For me, average Joe, trust depends on number of bitcoin acceptors world-wide, and because this number is so poor, as 10 000 miners, the only way to trust for me - being attracted to profitable mining myself.

FEW days ago I could mine profitably. Few days later I never can mine due to difficulty. So, average Joe does not trust in bitcoin.

Also, I used

http://www.alloscomp.com/bitcoin/calculator.php

to see, difficulty rises faster than $/BTC exchange ratio.

and I can not find any prooven data of rising of number of bitcoin acceptors world-wide.

some exchange closes (btcex.com) take place..

First good argument, you know, I was waiting for it. But 95% of 10 000 bitcoin adopters were so unlogical! But they all are still geeks!

I agree with this argument, but the problem is ALL you mentioned takes place in the field of.. 10 000 players! bitcoin excange ratio is too unstable, and money output is too unguaranteed.

DANGER, extreme exponential games take place in the field of some 10 000 players!
 

Yes, I am, as crazy as difficulty rate @ http://bitcoincharts.com

That is of course the disadvantage of bitcoin to established currencies: they are widely accepted and bitcoin is not. There needs to be some perceived advantage that bitcoin has to established currencies that encourages adoption despite its being less widely accepted, and so far it has had that, since its adoption rate has been very high.

The increases in difficulty increase trust in bitcoin, because they are a result of greater computing power, and greater computing power increases security.

Doubling of difficulty means going from 10,000 miners to 20,000 and on the way to a million miners.  Isn't that what you want?

Your problem is that you cant see before or beyond the difficulty increase to the bitcoin price increase.  Before you got here the difficulty was flat around 100,000 and BTC was under $1.00. 

Then BTC went to almost $10.  Now difficulty is heading towards a million to match the 10x increase in price.

When difficulty is at a million and BTC is $10, mining will seem like a losing bet.  Some will quit and sell their coins. 

Come back in a few months.  The price will go to $50 or $100.  Difficulty will follow from one million to ten million, and all the new miners will complain that the sky is falling, difficulty is headed towards the moon (a good thing btw), and bitcoin is doomed.