Topic: Is this the reason the bitcoin price is not exploding right now? - page 2. (Read 4454 times)

Except Bitcoin already spends more on electricity, than VISA. But processes 0.001% of the amount of transactions VISA does.

I guess you dont know that much about mining. Due to economies of scale, mining is no longer viable for individuals. Its the same reason you buy milk at the supermarket and not a milkman who delivers it fresh to your door everyday. Basically, the only companies making a profit in mining at this point are the hardware manufacturers themselves. Theres no fruit left on the tree that individuals can reach.

Personally, I dont have a problem with it as it all makes the network more secure.

What advantages does a data center have compared an individual wanting to mine with one (or a few) machines?

What disadvantages does a data center have compared an individual wanting to mine with one (or a few) machines?

How does the amount of machines you have change your profit margins (which is what you seem to be suggesting)?


It is the reason Bitcoin can exist and function. The alternatives have not proven to be superior, regardless of how strong one's opinion on the matter may be.

Agree, the comparison isn't valid.  It's a lot like saying comparing a candle to a steam engine and saying, "look the candle uses way less energy".  It totally obfuscates the fact that the candle isn't anywhere near as powerful or robust or even in the same class of object.  The candle is fine for what it does, the steam engine is fine for what it does.  But comparing them on energy use is crazy.  It misses the fact that the steam engine can power a locotomotive train whereas the candle can power ..., well the candle can't really power anything but it can light up your room.

The miners are not "burning" electricity. They are using the electricity to perform mathematical calculations that prevent people from spending the same money twice. This is not unlike how banks power their computer systems to keep track of account holders' balances

Bitcoin isn't just the transaction network, it's also the asset being transacted. Your comparison is invalid.

Can VISA block transactions at their whim? Your comparison is invalid.

The miners are not "burning" electricity. They are using the electricity to perform mathematical calculations that prevent people from spending the same money twice. This is not unlike how banks power their computer systems to keep track of account holders' balances

Hm... why do you think PoW is one of bitcoins greatest strengths? It feels stupid to pay miners 1.6 M bucks per day for burning electricity. It was a great invention back in 2009 but now  we can all see its a flaw that might kill bitcoin. Especially when the difficulty is high enough so only big players will be able to profit from mining thus recentralizing the network to a few mining data centers

Hm... why do you think PoW is one of bitcoins greatest strengths? It feels stupid to pay miners 1.6 M bucks per day for burning electricity. It was a great invention back in 2009 but now  we can all see its a flaw that might kill bitcoin. Especially when the difficulty is high enough so only big players will be able to profit from mining thus recentralizing the network to a few mining data centers

PoW is one of Bitcoin's greatest strengths.

And the current proof-of-work system isn't a tragedy of the commons, it's actually the reverse of same.  I was thinking along these lines early on, and made some of those same very arguments about a year ago, but I accept my error now.  A tragedy of the commons requires that a common resource be consumed by self interested players, but what is really happening is that a common resource (the security of the blockchain) is actually being aggregated.  I've made many counter arguments to my prior position on this since then, particularly centered around the incentive for major future entities in competition investing in exclusive mining agreements.  Think Wal-Mart & McDonalds agreeing to partner on a mining center that makes every effort to exclude the transactions intended for the Target & Burger King alliance.  I.E., companies in different industries have an incentive to work together, but exclude their competitors, as far as that is realistic in order to avoid transaction fees & processing delays.  This adversarial situation benefits the bitcoin consumers collectively, regardless of how each set of mining alliances should treat each other.

Brick & Morter banks would have similar reciprocal processing agreements; in order to get the other bank to process their customers' transactions without a fee & relatively fast, they would have to do the same for their customers.  Such an agreement would benefit both banking institutions, regardless of their relative size.  For example, MEGABitCoinBAnk in NYC has 100,000 customers and a 1000 GPU data center, while LittleFarmersBitcoinTrust near Cincinnati only has 10,000 customers and a 50 gpu data center.  Both banking institutions stand to benefit to some degree, so long as they are not competing in the same local markets, so the agreement happens.  MEGABitCoinBAnk is likely to make dozens of such agreements, leveraging the gpus of those dozens of local banks, even if some of them do compete with each other in the same market.

The reason it preety simple.  The short term and mid term price of bitcoin has largely been driven by momentum, right now the momentum is going the wrong direction which is too be expected given the massive surge in btc price over the past couple of years.  Also which more merchants accepting bitcoin and coverting into fiat it has the effect of buyers selling their bitcoin which is creating downward pressure, as btc because mainstream more people will buy and we will see the price swing the other direction.