Topic: Miner reward = 0.01√difficulty (Read 1593 times)
Not sure why this ended up in mining, this is an idea to redesign the bitcoin protocol with a massive hard fork. It's not really about mining at all. There's a lot misunderstood about the impact of such a change that can only be negative as others have mentioned already.
The miners also benefit from the current cap, because the reward is more valueble than what it would have been if there were a flexible cap. What would you chose? 100 bitcoins @ $10/BTC OR say 12 bitcoins at $800/BTC < Just a simple example >
Miners would sell all the bitcoins before increasing the production, so your point is invalid. We won't tell you until it's too late
It will not just be the early adoptors that would appose this, every person who own bitcoins would be against such a flexible cap because it devalue their current coins as the cap is lifted and more coins enters the network. You are free to create your own Alt coin and then see how this will fail. The miners also benefit from the current cap, because the reward is more valueble than what it would have been if there were a flexible cap. What would you chose? 100 bitcoins @ $10/BTC OR say 12 bitcoins at $800/BTC < Just a simple example >
Bitcoin was based on Gold, and there are only limited amounts of gold deposits, which makes it more valueble as a precious metal. ^smile^
Bitcoin was based on Gold, and there are only limited amounts of gold deposits, which makes it more valueble as a precious metal. ^smile^
i don't know why you only understood the irrelevant half of my comment! i am talking about "supply" part of it. if we assume your suggestion is implemented, then there are going to be thousands of miners mining bitcoin and earning a very large amount of bitcoin everyday, an amount which is then going to be dumped on the market killing the price.
go take a look at that link and study the history of some of those coins, you can even check out some of the top coins too. they all suffer from the same mistake. lots of mining reward, miners dumping and price crashing. essentially making it worthless.
p.s. you think gold would have been valuable if you could find it growing on trees?
go take a look at that link and study the history of some of those coins, you can even check out some of the top coins too. they all suffer from the same mistake. lots of mining reward, miners dumping and price crashing. essentially making it worthless.
p.s. you think gold would have been valuable if you could find it growing on trees?
Did you miss out the part where I said that I'd like a 2% inflation and that bitcoin right now has 4%? You tried a straw man argument and you failed!
What would happen if the miner reward was proportional to the difficulty?
As more and more people mine, the reward would be bigger and bigger, allowing for a more fair distribution of coins for late comers, IMO.
I think a good formula for miner reward would be reward=0.01√difficulty (square root to discourage inflation), which would give 5569 bitcoins right now, or 24 million bitcoins per year at the current difficulty.
Of course the early adopters would not like such a system, but they are the minority IMO. As long as the majority benefits from such a system, I think we can do it.
As more and more people mine, the reward would be bigger and bigger, allowing for a more fair distribution of coins for late comers, IMO.
I think a good formula for miner reward would be reward=0.01√difficulty (square root to discourage inflation), which would give 5569 bitcoins right now, or 24 million bitcoins per year at the current difficulty.
Of course the early adopters would not like such a system, but they are the minority IMO. As long as the majority benefits from such a system, I think we can do it.
This will not work, as with new tech coming over the old, mining reward will go linearly up with time (since computing power goes exponential up), therefore old miners will eventually lost all, and coin will favor only late comers, inflation will be out of hand.
~the cap of 21 million would be lifted.
go here (https://coinmarketcap.com/#USD) then in that table click on the "Available Supply" link in the header to sort the coins with that factor in a descending order and take a look at coins with a massive available supply and take a look at each of their prices.
and if you are not familiar with the concept of "supply and demand" google it.
I'd argue that the demand for bitcoin is low because of the early adopters hoarding most of bitcoin and waiting for the greater fool to fall in the trap. If the distribution was more fair, the demand would grow faster than the increased supply.
Also, the miners, who are the backbone of bitcoin, are being exploited by constantly decreasing wages and more difficult work every day! We must unionize!
i don't know why you only understood the irrelevant half of my comment! i am talking about "supply" part of it. if we assume your suggestion is implemented, then there are going to be thousands of miners mining bitcoin and earning a very large amount of bitcoin everyday, an amount which is then going to be dumped on the market killing the price.
go take a look at that link and study the history of some of those coins, you can even check out some of the top coins too. they all suffer from the same mistake. lots of mining reward, miners dumping and price crashing. essentially making it worthless.
p.s. you think gold would have been valuable if you could find it growing on trees?
could you explain whats going on 
~the cap of 21 million would be lifted.
go here (https://coinmarketcap.com/#USD) then in that table click on the "Available Supply" link in the header to sort the coins with that factor in a descending order and take a look at coins with a massive available supply and take a look at each of their prices.
and if you are not familiar with the concept of "supply and demand" google it.
I'd argue that the demand for bitcoin is low because of the early adopters hoarding most of bitcoin and waiting for the greater fool to fall in the trap. If the distribution was more fair, the demand would grow faster than the increased supply.
Also, the miners, who are the backbone of bitcoin, are being exploited by constantly decreasing wages and more difficult work every day! We must unionize!
~the cap of 21 million would be lifted.
go here (https://coinmarketcap.com/#USD) then in that table click on the "Available Supply" link in the header to sort the coins with that factor in a descending order and take a look at coins with a massive available supply and take a look at each of their prices.
and if you are not familiar with the concept of "supply and demand" google it.
That's a horrible analogy. We should rape and pillage so we all get an even amount of bitcoins instead of some early adopters getting any benefit. It seems like the complete opposite of what bitcoin is about, so good luck with this altcoin. May I suggest a name? Infinite supply Indian-hating shitcoin, or isis for short. I think it'll do great/s.
Altcoins are just the same game, and as long as there are late comers, there will be new altcoins every day.
No, we must change bitcoin, by force, to implement a more fair distribution scheme, and all altcoins will disappear.
We miners must make an union that will safeguard our interests and livelihood and stop being exploited by the dirty capitalists.
Also late-comers just have to deal with it; it's like everything. You find it early, take a risk, get rewarded sometimes and lose out others.
Find something new and get involved with it, then get rewarded. It's not supposed to be fair for everyone. First person to a new cache of resources gets rewarded appropriately.
In a real world scenario, a small number of people that gets to the cache of resources will be raided by a much larger group and have their resources taken away from them. Which is what I'm proposing here. The majority of miners would agree to increase miner reward and thus "raid" your cache of resources.
That's what happened with the continent of america. Just because a small group of people claimed all the land (the "indians"), means nothing when the larger and more powerful group (europeans) comes and takes it away by force. Which is what should happen with bitcoin.
That's a horrible analogy. We should rape and pillage so we all get an even amount of bitcoins instead of some early adopters getting any benefit. It seems like the complete opposite of what bitcoin is about, so good luck with this altcoin. May I suggest a name? Infinite supply Indian-hating shitcoin, or isis for short. I think it'll do great/s.
Also late-comers just have to deal with it; it's like everything. You find it early, take a risk, get rewarded sometimes and lose out others.
Find something new and get involved with it, then get rewarded. It's not supposed to be fair for everyone. First person to a new cache of resources gets rewarded appropriately.
In a real world scenario, a small number of people that gets to the cache of resources will be raided by a much larger group and have their resources taken away from them. Which is what I'm proposing here. The majority of miners would agree to increase miner reward and thus "raid" your cache of resources.
That's what happened with the continent of america. Just because a small group of people claimed all the land (the "indians"), means nothing when the larger and more powerful group (europeans) comes and takes it away by force. Which is what should happen with bitcoin.
What would happen if the miner reward was proportional to the difficulty?
As more and more people mine, the reward would be bigger and bigger, allowing for a more fair distribution of coins for late comers, IMO.
I think a good formula for miner reward would be reward=0.01√difficulty (square root to discourage inflation), which would give 5569 bitcoins right now, or 24 million bitcoins per year at the current difficulty.
Of course the early adopters would not like such a system, but they are the minority IMO. As long as the majority benefits from such a system, I think we can do it.
As more and more people mine, the reward would be bigger and bigger, allowing for a more fair distribution of coins for late comers, IMO.
I think a good formula for miner reward would be reward=0.01√difficulty (square root to discourage inflation), which would give 5569 bitcoins right now, or 24 million bitcoins per year at the current difficulty.
Of course the early adopters would not like such a system, but they are the minority IMO. As long as the majority benefits from such a system, I think we can do it.
as a concept for a new altcoin:
early adoptors wouldnt care. because in the early days there wouldnt be that many people so the hashrate would be small. thus early adopters wouldnt be spending much to mine it.
you might want to start with a lower reward to incentivise people to power up to get more reward.
no point starting large and getting larger
What would happen if the miner reward was proportional to the difficulty?
As more and more people mine, the reward would be bigger and bigger, allowing for a more fair distribution of coins for late comers, IMO.
I think a good formula for miner reward would be reward=0.01√difficulty (square root to discourage inflation), which would give 5569 bitcoins right now, or 24 million bitcoins per year at the current difficulty.
Of course the early adopters would not like such a system, but they are the minority IMO. As long as the majority benefits from such a system, I think we can do it.
Well, your numbers show the reason why it wouldn't work; you say there will be 24 million mined each year, where Bitcoin has a hard cap of 21m Bitcoins that exist in total.As more and more people mine, the reward would be bigger and bigger, allowing for a more fair distribution of coins for late comers, IMO.
I think a good formula for miner reward would be reward=0.01√difficulty (square root to discourage inflation), which would give 5569 bitcoins right now, or 24 million bitcoins per year at the current difficulty.
Of course the early adopters would not like such a system, but they are the minority IMO. As long as the majority benefits from such a system, I think we can do it.
Also late-comers just have to deal with it; it's like everything. You find it early, take a risk, get rewarded sometimes and lose out others.
Find something new and get involved with it, then get rewarded. It's not supposed to be fair for everyone. First person to a new cache of resources gets rewarded appropriately.
What would happen if the miner reward was proportional to the difficulty?
As more and more people mine, the reward would be bigger and bigger, allowing for a more fair distribution of coins for late comers, IMO.
I think a good formula for miner reward would be reward=0.01√difficulty (square root to discourage inflation), which would give 5569 bitcoins right now, or 24 million bitcoins per year at the current difficulty.
Of course the early adopters would not like such a system, but they are the minority IMO. As long as the majority benefits from such a system, I think we can do it.
in my opinion, sorry, but it's a bad idea..As more and more people mine, the reward would be bigger and bigger, allowing for a more fair distribution of coins for late comers, IMO.
I think a good formula for miner reward would be reward=0.01√difficulty (square root to discourage inflation), which would give 5569 bitcoins right now, or 24 million bitcoins per year at the current difficulty.
Of course the early adopters would not like such a system, but they are the minority IMO. As long as the majority benefits from such a system, I think we can do it.
why? inflation.
plus, with time the largest miners will be even larger and mining more and more each day(difficult/reward will be increasing and their farm too). So, no fair distribution.
Right now, no matter how many mine, the block reward is the same.
Your formula would be difficult to implement and it's not future proof. After the last halving the miners will earn only from tx fees. How will you formula apply then? It won't. Sorry, IMHO it's not a good idea.
Your formula would be difficult to implement and it's not future proof. After the last halving the miners will earn only from tx fees. How will you formula apply then? It won't. Sorry, IMHO it's not a good idea.
No more halving. The reward of bitcoins would be dynamic and thus the cap of 21 million would be lifted.
Many people argue that what gives Bitcoin its value is scarcity. If you make bitcoins cap we're removed it would lose that benefit. You're system would also need a cap at some point to eliminate the infinite supply concept. Even governments use manipulation of the supply of money to control inflation and deflation. Your system would be continuously inflationary.
If the adoption of bitcoin is not rapid enough, there won't be enough transaction fees to pay for the miner's electricity. But if it's too rapid, there won't be enough bitcoins for everyone (with the current system).
With my system, miners continue to earn bitcoins in perpetuity and more mining is encouraged and a growth that is too rapid is not a problem since the introduction of new bitcoins will be proportional to the growth.
Inflation is bad, but generally if it's less than 2% it's not a problem. The formula could be tweaked to achieve less than 2% inflation. Which even in an infinite time frame would be OK.
Bitcoin at it's inception had a 100% inflation ratio! The current inflation rate of bitcoin is about 4%/year, which is a bit high.
I'm giving you the benefit of the doubt believing your understanding of how Bitcoin works is limited. Yes, there could be a scenario where Bitcoin will not have enough continuous transactions to provide the overwhelming profit miners saw in the beginning. I'm not sure overwhelming profit is necessary to keep some people mining. Businesses, for example, that are making their living selling unique products for Bitcoin or are otherwise tied to Bitcoin may choose to mine for free or at a loss.
Bitcoin is divisible enough for everyone in the world to use it. There are 2.1 quadrillion units in Bitcoin. While that's not an infinite supply it should be enough to spread around 7 billion people. In roughly seven years Bitcoin will be down to a 3btc block reward and mostly all mined into existence. There will be almost no inflation as no new money will be added to the money supply.
The only benefit you see from an increased mining reward is your ability to collect coins at a faster rate than you can now. The problem with that theory is that all of the extra coins you collect will be worth less than the few you can collect now because of the increase in the money supply. Essentially, you will end up right back where you started.
Right now, no matter how many mine, the block reward is the same.
Your formula would be difficult to implement and it's not future proof. After the last halving the miners will earn only from tx fees. How will you formula apply then? It won't. Sorry, IMHO it's not a good idea.
Your formula would be difficult to implement and it's not future proof. After the last halving the miners will earn only from tx fees. How will you formula apply then? It won't. Sorry, IMHO it's not a good idea.
No more halving. The reward of bitcoins would be dynamic and thus the cap of 21 million would be lifted.
Many people argue that what gives Bitcoin its value is scarcity. If you make bitcoins cap we're removed it would lose that benefit. You're system would also need a cap at some point to eliminate the infinite supply concept. Even governments use manipulation of the supply of money to control inflation and deflation. Your system would be continuously inflationary.
If the adoption of bitcoin is not rapid enough, there won't be enough transaction fees to pay for the miner's electricity. But if it's too rapid, there won't be enough bitcoins for everyone (with the current system).
With my system, miners continue to earn bitcoins in perpetuity and more mining is encouraged and a growth that is too rapid is not a problem since the introduction of new bitcoins will be proportional to the growth.
Inflation is bad, but generally if it's less than 2% it's not a problem. The formula could be tweaked to achieve less than 2% inflation. Which even in an infinite time frame would be OK.
Bitcoin at it's inception had a 100% inflation ratio! The current inflation rate of bitcoin is about 4%/year, which is a bit high.
Right now, no matter how many mine, the block reward is the same.
Your formula would be difficult to implement and it's not future proof. After the last halving the miners will earn only from tx fees. How will you formula apply then? It won't. Sorry, IMHO it's not a good idea.
Your formula would be difficult to implement and it's not future proof. After the last halving the miners will earn only from tx fees. How will you formula apply then? It won't. Sorry, IMHO it's not a good idea.
No more halving. The reward of bitcoins would be dynamic and thus the cap of 21 million would be lifted.
Many people argue that what gives Bitcoin its value is scarcity. If you remove bitcoins cap it would lose that benefit. You're system would also need a cap at some point to eliminate the infinite supply concept. Even governments use manipulation of the supply of money to control inflation and deflation. Your system would be continuously inflationary.
Right now, no matter how many mine, the block reward is the same.
Your formula would be difficult to implement and it's not future proof. After the last halving the miners will earn only from tx fees. How will you formula apply then? It won't. Sorry, IMHO it's not a good idea.
Your formula would be difficult to implement and it's not future proof. After the last halving the miners will earn only from tx fees. How will you formula apply then? It won't. Sorry, IMHO it's not a good idea.
No more halving. The reward of bitcoins would be dynamic and thus the cap of 21 million would be lifted.
Mining reward isn't for mining profit. It's a system to start a new coin and allow it to build up a user base so that transaction fees can take over as the method of payment for mining. You're system would be useful if Bitcoin were never expected to grow enough fast enough for fees to take over mining incentive.
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