Topic: Flaw in the reward structure of Bitcoin and other cryptocurrencies? - page 4. (Read 4020 times)

Maybe I went to a terrible University but my understanding is that 1 > 0. If, however, this is wrong, please let me know. No wonder I have bugs pop up in my code if this is incorrect.

Not to argue with the rest of the idiocracy, but just that specifically.

It would only take one person mining at the start though. People were already doing it even though they didn't know what to expect, and people compete with each other for "internet" points all the time... I don't think it would've made things any different mining wise.

It would've kept the price a lot more stable though, that's for sure. As more people got into it, more coins would be generated, so the price would stay lower for a longer time.

Crashing the market price doesn't kill Bitcoin. In fact the dollar price did crash from all time highs of $30+ to around $2. Look at this chart:

http://money.cnn.com/2013/03/06/technology/innovation/bitcoin/

Bitcoin is still here and valued at new all time highs, in fact.

Because nobody would mine, since it is going to become easier with time anyway. And if nobody wants to start, you won't ever reach the later levels of the project. Early adopters _need_ to be rewarded, or there would be no early adopters at all, effectively killing Bitcoin before it even started. Remember, those coins were worthless when the project started. Yet people were spending electricity, buying hardware, buying coins with a _very_ uncertain future. Those who took those risks have to be rewarded.

People like you who claim this flaw aren't thinking things over realistically, if someone buys up lots of Bitcoins or gains a lot of them the price will rise because of demand and the volume in circulation while the price in dollars will certainly crash Bitcoin itself will remain unaffected. People are still going to be able to trade with the small amount of coins left and of course as others have pointed out in threads I've seen without using search 1 Bitcoin alone can be divided up into millions of decimals.

In theory if the Bitcoin becomes that valuable then we will be dealing in 0.100000's of Bitcoins rather than in full Bitcoins because owning a whole Bitcoin will be like being a billionaire in conventional paper money, the difference between the paper money and Bitcoin of course is that the volume can't be increased. So to make a long and tiring argument short, yes, BTC/USD price can be crashed, but Bitcoin itself will be fine, it's a bit like when MTGOX was hacked, people panicked, but the reality is Bitcoin is still here and still being traded. We also had the GBLSE taken down recently and that hasn't drastically affected everything either and then there was that glitch with the MTGOX exchange too, while that crashed the price for USD, Bitcoin itself could still be openly traded without problems using the clients.

I think I was misunderstood, I'm not interested in the specifics of what it would take to crash the price, it was mainly an intro for my question about the reward system being flawed/broken.

I'm not religious but I pray every day this happens.

Someone sell bitcoins for 1$?  

Good point.  Let's go home everyone.  An orderbook-based trade execution system for exchanging commodities or securities is never going to work, because not everything is on the orderbook at once.  Interesting that no one spotted this before, but it's obvious now you look at it.

See you at $1.

Sorry if this was discussed before, couldn't find a thread discussing the implications of having a small reward to start, that then increases over time.

Haahah... we really need better newbie filters. Like, really.

Learn to use the search bar.

With almost 11 million coins in circulation, and the way the exchange market is currently laid out, I think we have a problem...

A market order to sell 311000 bitcoins right now would net 4278841.7722 USD and would take the last price down to 1.0000 USD, resulting in an average price of 13.7583 USD/BTC.

It takes someone selling 311k coins to crash the price to $1, which would/could completely kill Bitcoin off again. While 311k coins at current prices seem like something extraordinary, keep in mind that only a few years ago people were buying pizzas for 10k coins, so there could still be a few people holding hundreds of thousands of coins.

People like to think that the market cap is 500 million, but it isn't. Someone with just 311k+ coins could simply make the price go to 0.

I think the problem is in the design of the currency - and every other cryptocurrency modeled after Bitcoin. Early adopters are rewarded with a lot of coins, and once the currency gets mainstream, they have too much control.

While a sane individual wouldn't sell 311k all at once but rather spread them over a longer period of time and get more profit, a reckless or malevolent entity (government?) could simply kill any cryptocurrency in its medium/late stages simply by keeping a huge stack of coins from early on.

I'm not sure what the actual solution here could be, but I think it would've made more sense for the block generation reward to actually start low, and increase over time, than the other way around.

This would've hardly changed anything for early adopters because:
100 people competing over 720 coins per day is still better than a million people competing over 7200 coins per day.

True, they wouldn't have been rewarded so massively that it's potentially destabilizing, but they would've still been rich now.

Thoughts?


Edit: Since I'm sure I didn't discover hot water here and the ways of crashing the economy have been discussed before, I emphasized my main point above ^.