Topic: Help me understand Bitcoin and it's future (Read 958 times)

i just found out about the bitcoin documentary in youtube
hope it will help you a lot to understand bitcoin
here is the link https://www.youtube.com/watch?v=BtTMGpeMKII

Bitcoin is still pretty new.  We cannot really tell it's future well.  We just don't know.   

In 5-10 years will bitcoin be worth a lot more, will an alt coin take over at a point, we just dont know.  Fact is digital currency will be here to stay in what form and price is guesses years from now.

You would have enjoyed Bitcoin a lot more 4 years ago.

Bitcoin was everything you described back then. Nobody really expected Bitcoin to be picked up on this large of a scale.

the future of bitcoin is unpredictable, so stop worrying about its future and just enjoy the ride 

Bitcoin was envisioned as a peer-to-peer trustless exchange.  In plain English, that means I want to do a transaction with you, but I don’t trust you with my credit card number or other personal information.  I don’t care what country you live in, who you are, or what you do.  You have something I want that has a value to me.  It could be a computer, software package, document, box of cookies, bedspread…it doesn’t matter.  You have it, I want it, but I don’t want you to know anything about me or my finances. I understand that any transaction we enter into will be irrevocable.  That means I can’t call someone to say “Stop that payment.”  Payment is made immediately.  If you have a dispute, it has to be with the party you made the arrangement with.  It’s about as arm’s length as you can get.

I don't think it would run smoother but it would be fairer if anyone could mine but that's just not possible any more due to how bitcoin was set up and that's a shame to be honest.

Great questions and answers. 

I have always thought that full nodes should be rewarded too. In fact, I foresee that there will be a time when they will be, as mining comes to a halt.

I think most of us would agree to the wishlist of OP, however, some things are not possible technologically (rewarding full nodes) or economically (profitable hobby mining).

And about block size, no matter if big or small, centralization is not the problem of block size, but a matter of scale. With small block size you will have to rely more and more on off-chain features and trusted parties. So generally, the more Bitcoin scales up, the more tendency for centralization there is. It's not a issue of Bitcoin, but rather a natural circumstance.

You may take a look at https://en.wikipedia.org/wiki/MaidSafe (a distributed storage and "decentralized internet" platform with a built-in token, its own crypto-currency) who claim to be able to function without a blockchain and thus won't have the scalability problems that come with it. They use a "proof-of-resource" mechanism and a node-ranking system instead to provide security like preventing Sybil attacks. Its internal crypto-coins cannot be double-spent by design, as just like with any piece of other kind of data, the network knows where any data is, and copies are recognized by their hashes and are de-duplicated (akin to a modern filesystem like btrfs over a distributed RAID [MAID is a play on RAID]). However, it's still in development and hasn't stood the practical real-world test yet.

And yet, the reason we need bigger blocks is precisely because once the transaction volume gets way too big for everyone to afford, it will be more and more centralized and professionalized.  The last thing you want it centralized access to the bitcoin blockchain.

See here:

https://bitcointalksearch.org/topic/permanently-keeping-the-1mb-anti-spam-restriction-is-a-great-idea-946236

Something to point of 1) relevant to what we are seeing with Bitcoin XT debate: The reason a lot of people don't want bigger blocks is precisely because once the blocks become way too big for most people bandwidths to deal with (HDD space is not the main problem) it will be more and more centralized and professionalized. The last thing you want is centralized nodes just like mining became centralized.

It is possible to determine which blocks exist in the blockchain (the work that the miner completes and gets paid for).  It is not possible to determine who is actually running a full node.  Who would pay those running a node?  How would they get paid? How would you prevent fraud?

Note that solo miners and mining pools generally need to run a full node.  If they don't, then they open themselves up to attack from competitors.  Therefore, as long as we have plenty of miners and pools, we should have plenty of nodes.  Note also that the intended design of bitcoin when it was created was to have a relatively small number of full nodes with most users just running lightweight clients.  We can certainly change our minds about whether or not we want that, but we can't easily escape the fact that it was designed with such a purpose in mind.


Firstly, the talk is about increasing the block size LIMIT, not about increasing the block size.  It is quite likely that a larger limit will eventually mean that miners will create larger blocks, but if there isn't enough transaction volume to fill the larger limit, then the blocks very well may remain smaller for a long time.

Secondly, the word "HUGE" is very subjective.  How fast are you predicting that the blocks will actually grow?


Perhaps.  If it were possible to reliable do so.  Have you come up with a solution for any potential sibyl attacks?


Having full nodes certainly helps to make it more difficult for any small group to change any of the protocol rules to suit their desires, but the network would still run properly if it was mostly just miners and pools that were running full nodes.


Anyone can mine.  But it requires a lot of effort and access to inexpensive resources to mine profitably. If you want to mine at a loss as a hobby, it is certainly possible to do so.


Because it would be impossible to enforce.


No.  Since it is impossible to tell who is running a pool, and who it mining individually, it is impossible to enforce any caps like that.


So then get a job that pays in bitcoins, or convince your employer to pay you in bitcoins, or make use of bitwage.co, or start your own bitcoin based business.


Yes.  Mining is a competitive business.  Only those with access to the inexpensive enough resources can do it profitably.


Probably.


That depends on how big of a mining operation you can afford to set up, how inexpensive the resources are for you, and how much volatility in revenue you can handle.


Anyone can mine, but not everyone can do it profitably.  Mining is a competitive business. Those that have the largest margin between their costs and their revenues have the best chance to succeed.

It's true that nodes receive no reward for what they're doing. What's also true however is that bitcoin's network could survive on a significantly lower amount of nodes but that's unlikely to be the case as adoption increases. If you were to run a business handling bitcoin transactions on your own, you'd have to trust your own node(s). While this doesn't necessarily mean that nodes increase proportionately as more users arrive it means that as bitcoin grows, there'll be more parties actively benefiting from nodes and they will have a bigger interest at hosting new ones.


Everyone can mine. But it's far from a hobby now. Mining while you care about profit requires a lot of electricity, insight and a serious investment in time and equipment. Mining is an arms race because of how competitive it is. It's decentralization goes hand by hand with competition. A 51% becomes more and more expensive as more hashrate is deployed.


You're coming to the conclusion that profitable mining isn't for everyone which is true. Bitcoin is what it is what being the way it is. There are certain e-currencies where everyone has an equal chance at earning, however, those experimental currencies hold significantly less value than bitcoin. With bitcoin, as in any form of money, you can be rewarded for providing services or creating an innovative business model.

Well, you have two options 

The Rise and Rise of Bitcoin

or


Bitcoin: The End of Money As We Know It.

Both these documentaries will give you some good hints on what Bitcoin is really about.

You might also wanna check the Ross Ulbritch Documentary.

Forgive me as I'm fairly new to Bitcoin. There are some things I don't quite understand.

1. Why are miners rewarded but full nodes are not?

I see no incentive to run a full node other than to support the Bitcoin network. With all this talk about increasing the block size, won't the chain quickly become HUGE? Wouldn't the network be stronger if nodes were rewarded like miners for storing the chain? Especially once it starts to hit TB's? I'm talking a very small amount... Because the more full nodes running the more robust and secure the network is, correct?

2. Can average people no longer mine?

Why is there not a cap on mining? People talk about the 51% attack and at the same time it seems like mining is becoming more and more centralized. Isn't the point of this whole thing to be decentralized? Wouldn't it make sense to have more miners running at speeds of say 1GH/s vs. less miners running at 1TH/s? Can't you make a cap like 1% for a pool and .01% for an individual? Then the 51% attack would be virtually done would it not? And also leave room for individuals to have a real shot at earning Bitcoins.

3. Earning bitcoins seems like the most fun part of this whole thing. When I first learned about Bitcoin I was really excited about mining. Then I quickly realized it was out of reach for me. It seems like you'd have to buy a new rig every 6 months to keep up with the hashing power. Even then you have to join a pool in order to have a shot at earning anything. Wouldn't this network run much smoother and be more fun if anyone could mine? I mean it's nerds like us that will keep this network running. So shouldn't nerds like us be rewarded for playing a role?

I'll stop this here to await feedback and try to remember my other questions.