we haven't paid for people efforts and labor in centuries.
I'm not sure what may be happening here. I am wondering if I have somehow connected to a blog from the future! The following statement doesn't seem like the familiar world I have grown up in...
"we haven't paid for people(s) efforts and labor in centuries"...? Were do you live cause I want to live there!
Obviously you have not worked much as a laborer, I can attest to having to work at mindless, physically demanding jobs that do not justly compensate for the blood (literally) sweat and brawn that I had to provide to make an income, and I assure I am not a centurion so I did not hold those jobs "
centuries ago".
Perhaps tat was a bit too much of an extreme statement. I guess "we do not pay almost anything at all for people's labor" and more specifically "labor, alone." Those food service employees, groundskeepers, movers, and even garbage collectors, know how to do their specific skill, and after training know how to do it well. We pay them for their knowledge, and to apply their knowledge, and we pay those who know how to apply it, the most. Especially so in third world countries, where people have to know how to survive. Incidentally, I worked in fast food, retail, and other menial jobs as well.
This is the way it is in all business: long-term profit tends towards zero, because other companies join in to compete, and drive your prices down until you can sell your stuff only for exactly what it cost you to make it...
Yes and no. Generally speaking, people do not put forth effort if there is a guarantee of a loss for their efforts, specifically in terms of not being able to achieve bare basic returns, e.g... making a basic living. Individuals (including those who own or work for a company) who produce a product or provide a service will also try to protect their resources which includes their incomes so there is an incentive to inflate prices, manipulate markets, bolster advertising with exaggerated or false claims and will use many other tactics to at least stay at a level income.
People put effort until the loss from their effort equals the gain. As to companies. As for making a basic living, that is typically a market force, outside of people's control. If my skill set, be it labor or products, only allows me to make $10 a day, and I need $20 a day to survive, I can't simply demand a job from someone else that pays me $20, or demand that customers buy my products when they don't want to. I can only get paid what I, or my products, are worth. Inflating prices won't work, because everyone will buy cheaper from my competitors. Manipulating markets won't work, because I would get caught for the crime, and I probably can't afford to, anyway. Advertising might work, but that adds to my expense, and can hurt me if the claims are false.
This is also what drives people to innovate and figure out how to get just a little bit more than what has been previously available. This can be a more efficient production method, cheaper material, or more innovative product. Those people are the ones who earn more, because they discover something new, that others want, and that benefits everyone, and they do this by using their heads, instead of just their brawn.
Exactly on target, but not quite there. One misconception is the fact that most innovations do not benefit the innovator as much as those innovations line the pockets of savvy business types that pray on optimistic people who have invented something new. Most often what occurs is that a new idea is evaluated by an entity and if its profit potential looks good, that entity will make an offer to the ideas creator to purchase or license the idea. To maximize profit potential, the entity usually understates the ideas potential value, convinces the ideas creator that the entity is doing them a favor by taking a SUBSTANTIAL RISK that may loose money for the entity. Which is just a old salesmens trick used to justify a shockingly low offer for an idea that has amazing potential.
Speaking from some experience, that's actually what happens the rarest, but is just heard about most often. What actually happens most often is that the innovation is done by the very people who run or start the business, or that those with a lot of money fund and hie innovators, giving them loads of money in hopes they create something for them. The few cases involving inventors coming up with something and getting help from an entity that tells them they are taking a substantial risk, they aren't lying. Most businesses fail, and most venture capital investments fail. I know this because I deal with business, I deal with venture capital, and I have an invention I am also trying to sell. This isn't something I can simply "prove" to you, without spending an enormous amount of time looking for sources, but I hope may be intuitive to you if you think about how large businesses actually compete. That is where a lot of innovation happens, most of the time in small tweaks and adjustment to process here and there, not in tinkerer's garages.
Perhaps, but I do not see how that negates my statements. So lets say at some point memory is free to all, even then being faster than someone else at confirming transactions through the use of more advanced hardware still makes you faster than someone else and that means more volume and higher volume means higher profit even if you have the lowest price (think Walmart). The confirmer at a disadvantage is not the one who charges the least, but the one who has to charge the most. I don't see what storage capacity has to do with confirmations, at least not for new transactions. Every transaction must be confirmed, so a new transaction must still be confirmed even if the value included in the new transaction was confirmed in a prior transaction. A confirmation uses (strictly speaking) compute cycles just the same. Couple this fact with your statement above about competition and how that spurs innovation and I think you have gone a long ways to proving some of my assertions.
Sorry, I honestly have no idea what you are talking about. Why would a confirmer charge anything? Do you mean "accept transactions with fees?" Why would someone not accept certain cheaper fee transactions, if the effect of including them in the block they are mining are negligible?
I'm sorry, but I do not see the distinction, the ability to choose a payment level for the confirmation service is tantamount to the same thing. Even though miners may passively confirm transactions its still part of the profit incentive to mine and will be the only way to earn money when all bitcoins are mined. So what do you think a miner will do with all that hardware they had invested in so that they could mine? And what will the miner do to maximize their return? Easy, refuse to confirm any transaction unless it is some X% of the transaction, or at least set transaction fees much higher than they are currently. Seems like something you get in the mail from your bank telling you that they are unilaterally raising every fee they have and saying its necessary. Once enough people decide to do the same, then you have a base rate that almost all charge for the service. Except those who have the fastest confirmation speeds, they might charge around 3% less. Even though 3% doesn't sound like much, its still the lower fee so do you think most people will decide to pay that 3% more or the 3% less? Thats how it works today in all the fiat systems.
Ah, I sort of see. First, how would someone have faster confirmation speeds? Speeds are locked to 10 minutes per block. Do you mean someone who has more hashing power to find a higher percentage of blocks? As for the idea that "once enough people decide to do the same," that idea will be spoiled as soon as someone decides to make more that everyone else by taking the 2% and 1% fees that are lying around that no one else is taking. Banks can get away with it because you can't switch easily. You, as a customer, have what is called a "switching cost," which is also why you can be locked into an iPhone and be gouged by ridiculous music prices and app restrictions. With mining, all the customer knows is that higher fees put the transaction at a higher priority within the code, so higher fees should be pad for fast transactions, and lower or zero fees for money you don't mind taking hours to move. Someone, somewhere, will be mining and accepting zero fee transactions, and ruining it for all the other organized price gouging miners.
Yes, thats correct, but rather it is more apt to call it a "confirmation fee." On the 51% attack, as I understand it, thats more like theft. Think more along the lines of "The Big Three." Most major industries have three top selling companies that control the majority of the market for their product. A 51% theft would require a collusion of the top confirmers to agree to conduct the theft and is less likely. But why bother with a 51% attack when the largest confirmation clearing houses silently agree to fix prices? Will it happen that way? I duno. There is historical precedence for this type of activity, so, would you prefer to just close your eyes and pretend the risk isn't there or would you prefer steps are taken early enough to negater the risk as much as possible?
Well, 51% would be really bad for the Big Three, since people would lose faith in the system they are making money off of. As for fixing prices, it might happen. Personally I still doubt it. Mainly because the actual mining is easy to get into (no barriers to entry is the business term). Anyone can (or will be able to) go out and buy an ASIC, and it won't be all tat much worse than what the Big Three have. Sure, you won't have terahashes at your disposal, but the proportion of costs to returns will likely be close enough. I expect there will be hobbyist miners around the world. The other big thing is that, while it may eventually take a lot of capital to support the blockchain files, that, again, doesn't apply to the actual mining. So what I suspect we will have is the same pool structure we have now, with pools providing the infrastructure, and anyone with an ASIC being able to freely join and contribute. In this case it won't be a collusion between Big Three as to what to do, it will be the thousands of miners arguing and debating about what fees the pool should take, and the pools competing for miners just as much as for the fees.
Try to find and read some information online about "network effect." It's what explains eBay, Facebook, Windows, Blue ray, etc. Bitcoin has it, and it's why alt-coins will likely always fail, or at most be second best.
What makes you so sure that bitcoin will be the sole survivor. You don't think crypto-currency can be innovated any further?
Of course it can be. And it will be. It's just that all the innovators will innovate on the currency that everyone else is using, too. And everyone else will be using the currency their friends are using, and which is being the most innovated on. Bitcoin is just a set of communication protocols, with some software to make it work, but the software can be changed and improved upon. Why replace it when you have an established network of users and contributors already? Again, look into network effect.
What makes you so sure miners will not abandon bitcoin in droves when you can't mine it anymore in favor of some other crypto-currency that lets them return to mining for profit?
What makes you so sure other currencies will give them a profit? First, miners don't make a currency. No one using dollars or euros cares what kind of printing presses that cash goes through. People who use currency only care about what kind of software, hardware, and services are available (hardware wallets, point of sale systems, web wallets), and whether everyone else they know, like their friends and stores they shop at, use it to. Second, what do you think will happen when miners leave in droves to mine elsewhere? I would think that mining difficulty will drop, making bitcoin mining profitable again.
If to many jump ship who will confirm all those transactions?
If they are jumping ship because ASICs are too powerful and are contributing more hashing power that these miners can, then I would suspect those same ASICs would confirm those transactions. The miners are basically being kicked out because they are insignificant, and at the same time you are suggesting that the network won't be able to work without them.
Do you think people wont just switch to the new pop currency or do you think people will just love bitcoin to much to let that happen?
See above regarding miners not being important and network effects for rest of users.
P.S. It's late and I have a headache, so sorry if this came out sounding a bit too strongly argumentative. Please let me know if you have any more objections and such.
