Protagonus: excellent post.
I hadn't realized just how little thought Satoshi had put into ensuring true decentralization or the economics of Bitcoin, or even how these lite nodes would work exactly. (Bitcoin is severely lacking when it comes to For instance the idea of just assuming transaction fees will become the main compensation for nodes is nuts, because it both assumes nodes are run by miners - dangerous given Bitcoin depends on a jam-proof network - and easily results in the situation where the funds going to miners are spent on non-mining expenses. Then again, Satoshi doesn't seem to have foreseen the development of mining pools, which indicates he wasn't thinking hard about the the economics in general; investing effort in mining is crazy if the varience is so high that the expected time to find a block is months or years.
Probably your usual example of someone inventing something really clever, and having all their thought processes locked into their original idea rather than thinking about alternatives, or even just admitting that it's uncertain if the system will work in the future as it scales upwards.
Topic: Stupid question about bitcoin future (Read 833 times)
https://bitcointalksearch.org/topic/m.267
Eventually at most only 21 million coins for 6.8 billion people in the world if it really gets huge.
But don't worry, there are another 6 decimal places that aren't shown, for a total of 8 decimal places internally. It shows 1.00 but internally it's 1.00000000. If there's massive deflation in the future, the software could show more decimal places.
If it gets tiresome working with small numbers, we could change where the display shows the decimal point. Same amount of money, just different convention for where the ","'s and "."'s go. e.g. moving the decimal place 3 places would mean if you had 1.00000 before, now it shows it as 1,000.00.
But don't worry, there are another 6 decimal places that aren't shown, for a total of 8 decimal places internally. It shows 1.00 but internally it's 1.00000000. If there's massive deflation in the future, the software could show more decimal places.
If it gets tiresome working with small numbers, we could change where the display shows the decimal point. Same amount of money, just different convention for where the ","'s and "."'s go. e.g. moving the decimal place 3 places would mean if you had 1.00000 before, now it shows it as 1,000.00.
https://bitcointalksearch.org/topic/m.3565
Right, the difficulty adjustment is trying to keep it so the network as a whole generates an average of 6 blocks per hour. The time for your block to mature will always be around 20 hours.
The recent adjustment put us back to close to 6 blocks per hour again.
There's a site where you can see the time between blocks, and since block 68545, it's been more like 10 minutes per block:
http://nullvoid.org/bitcoin/statistix.php
The recent adjustment put us back to close to 6 blocks per hour again.
There's a site where you can see the time between blocks, and since block 68545, it's been more like 10 minutes per block:
http://nullvoid.org/bitcoin/statistix.php
https://bitcointalksearch.org/topic/m.540
The formula is based on the time it takes to generate 2016 blocks. The difficulty is multiplied by 14/(actual days taken). For instance, this time it took 9.4 days, so the calculation was 14/9.4 = 1.49. Previous difficulty 2.53 * 1.49 = 3.78, a 49% increase.
I don't know what you're talking about accepting easier difficulties.
I don't know what you're talking about accepting easier difficulties.
https://bitcointalksearch.org/topic/m.329
Right. Otherwise we couldn't have a finite limit of 21 million coins, because there would always need to be some minimum reward for generating. In a few decades when the reward gets too small, the transaction fee will become the main compensation for nodes. I'm sure that in 20 years there will either be very large transaction volume or no volume.
https://bitcointalksearch.org/topic/m.412
-snip-
The number of nodes and associated computational cpu power will be in flux, and that competitive flux will allow for costs to approximate value (not the other way around.) Value being set by the markets and the demand for use of bitcoin as a trade intermediary (a money). In the far future, the competition of transaction costs will play a more important role for the would-be node operator.
-snip-
XC
The number of nodes and associated computational cpu power will be in flux, and that competitive flux will allow for costs to approximate value (not the other way around.) Value being set by the markets and the demand for use of bitcoin as a trade intermediary (a money). In the far future, the competition of transaction costs will play a more important role for the would-be node operator.
-snip-
XC
https://bitcointalksearch.org/topic/m.415
Excellent analysis, xc.
A rational market price for something that is expected to increase in value will already reflect the present value of the expected future increases. In your head, you do a probability estimate balancing the odds that it keeps increasing.
In the absence of a market to establish the price, NewLibertyStandard's estimate based on production cost is a good guess and a helpful service (thanks). The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.
In later years, when new coin generation is a small percentage of the existing supply, market price will dictate the cost of production more than the other way around.
At the moment, generation effort is rapidly increasing, suggesting people are estimating the present value to be higher than the current cost of production.
A rational market price for something that is expected to increase in value will already reflect the present value of the expected future increases. In your head, you do a probability estimate balancing the odds that it keeps increasing.
In the absence of a market to establish the price, NewLibertyStandard's estimate based on production cost is a good guess and a helpful service (thanks). The price of any commodity tends to gravitate toward the production cost. If the price is below cost, then production slows down. If the price is above cost, profit can be made by generating and selling more. At the same time, the increased production would increase the difficulty, pushing the cost of generating towards the price.
In later years, when new coin generation is a small percentage of the existing supply, market price will dictate the cost of production more than the other way around.
At the moment, generation effort is rapidly increasing, suggesting people are estimating the present value to be higher than the current cost of production.
https://bitcointalksearch.org/topic/m.2947
The current system where every user is a network node is not the intended configuration for large scale. That would be like every Usenet user runs their own NNTP server. The design supports letting users just be users. The more burden it is to run a node, the fewer nodes there will be. Those few nodes will be big server farms. The rest will be client nodes that only do transactions and don't generate.
https://bitcointalksearch.org/topic/m.2947
The design outlines a lightweight client that does not need the full block chain. In the design PDF it's called Simplified Payment Verification. The lightweight client can send and receive transactions, it just can't generate blocks. It does not need to trust a node to verify payments, it can still verify them itself.
The lightweight client is not implemented yet, but the plan is to implement it when it's needed. For now, everyone just runs a full network node.
I anticipate there will never be more than 100K nodes, probably less. It will reach an equilibrium where it's not worth it for more nodes to join in. The rest will be lightweight clients, which could be millions.
At equilibrium size, many nodes will be server farms with one or two network nodes that feed the rest of the farm over a LAN.
The lightweight client is not implemented yet, but the plan is to implement it when it's needed. For now, everyone just runs a full network node.
I anticipate there will never be more than 100K nodes, probably less. It will reach an equilibrium where it's not worth it for more nodes to join in. The rest will be lightweight clients, which could be millions.
At equilibrium size, many nodes will be server farms with one or two network nodes that feed the rest of the farm over a LAN.
https://bitcointalksearch.org/topic/m.2303
By the time Bitcoins replace the Euro 
I think most people will be running lightweight clients on wireless smartcards in their (physical) wallet that don't pay attention to every single transaction.
But that's WAAAY down the road. And who knows, by then maybe we'll all have a hundred-gigabits of bandwidth in our pants.
I think most people will be running lightweight clients on wireless smartcards in their (physical) wallet that don't pay attention to every single transaction.But that's WAAAY down the road. And who knows, by then maybe we'll all have a hundred-gigabits of bandwidth in our pants.
hope this answers your questions
I am sure that this was beaten to death, but it is still bothering me, or I just can not understand some simple things. I will try to write it here, but please somebody correct me where I am wrong and explain.
As I know the number of bitcoins limited by 21,000,000 by design. We already produced more than half of it. I understand that difficulty of finding bitcoin will grow more and more, so average time of finding it also can grow, but it is probably compensated now with more powerful miners. For example, not so far ago number of workers on eclipse was around 2000 and speed was about 1.8 TH/S. Now the number of workers practically the same but speed is about 8.3 TH/S already. I made a conclusion that GPU miners mostly been pushed out by other more powerful miners.
Now miners got paid by sharing new created bitcoin which includes transactions made.
After last bitcoin will be made, transactions still should be recorded somewhere. Does it mean that finding last bitcoin will kill bitcoin as a currency? Also, after all bitcoins will be made, miners will get paid only for processing transactions, not sharing value of new produced bitcoin, as there no more bitcoin can be produced. Does it mean that transactions fee will increase dramatically? Some people say that it will take long time when we reach the end because difficulty will only increase. But again, who knows what kind of super chips we will have in a future. Probably as powerful compare to ASIC as ASIC to GPU. And if not, it only means that processing transactions will take more and more time.
OK, now, please somebody explain me where I am wrong.
Thank you in advance.
As I know the number of bitcoins limited by 21,000,000 by design. We already produced more than half of it. I understand that difficulty of finding bitcoin will grow more and more, so average time of finding it also can grow, but it is probably compensated now with more powerful miners. For example, not so far ago number of workers on eclipse was around 2000 and speed was about 1.8 TH/S. Now the number of workers practically the same but speed is about 8.3 TH/S already. I made a conclusion that GPU miners mostly been pushed out by other more powerful miners.
Now miners got paid by sharing new created bitcoin which includes transactions made.
After last bitcoin will be made, transactions still should be recorded somewhere. Does it mean that finding last bitcoin will kill bitcoin as a currency? Also, after all bitcoins will be made, miners will get paid only for processing transactions, not sharing value of new produced bitcoin, as there no more bitcoin can be produced. Does it mean that transactions fee will increase dramatically? Some people say that it will take long time when we reach the end because difficulty will only increase. But again, who knows what kind of super chips we will have in a future. Probably as powerful compare to ASIC as ASIC to GPU. And if not, it only means that processing transactions will take more and more time.
OK, now, please somebody explain me where I am wrong.
Thank you in advance.
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