Topic: The fundamental flaw in bitcoin - page 3. (Read 2292 times)

I see how what I've written may be taken as demanding.  Sorry, I should have put a "could" in there--ie:  "Could you please explain..."

You could also create a paper note with a private key inside.  Like printing a QR code on the outside of a sealed envelope.  So how do you get someone else to trust it?  You would have to get the vendor to 1) trust you, which would likely require identifcation; 2) trust that the currency is legitimate, i.e. not counterfit; and 3) trust that the mint that created it was trustworthy.

Casasius is a well trusted community member, but even his coins are not universally well regarded.  If he can make one, someone else can fake it.  Eventually this is going to happen.

Furthermore, loading your wallet to exchange still requires on-network transactions.  It's impossible to always avoid that, no matter how many off-network trades you can do.

Oops, sorry, this was meant to be a reply to greyhawk.  I'm new here and didn't see the quote function.

You only need fill the wallet *once* for it to be exchanged an infinite number of times.  eg: look at a casasius coin-- once it is bought by somone there it no stopping how many times it can be physically exchanged between different people before someone puts it back into a different wallet with new transaction on the network.

Also, you only need of regular totals of the wallets to be transferred off-chain to make any amount you wish to exchanged: eg- you can have .... 0.001, 0.002,  0.005 0.1, 0.2 0.5, 1, 2, 5, 10, 20, 50, 100BTC,.... totals in the wallets and you exchange the  key-pairs of the required numbers of wallets to make up the any amount you wish (ie: similar to how regular denomination coins/notes work in real like currency)

No.  Do some more research on this topic first.  I assure you, that you are not some economic genius that has found the 'great Bitcoin flaw' (tm) and no one before you has had the same thoughts.


Yes.

Now use the search function and don't ask crazy questions before you are out of newbie hell, or the next time I'll nuke your little account out of spite.

Great. So instead of sending transactions you want to exchange wallets off the grid.

One question though. How are you gonna fill that wallet with the needed amount of btc?

Hello,
I'm a new member here, although I've been following bitcoin and this forum for a while.  Something has been bothering me for quite some time and I've finally joined to ask you guys about it.   Specifically: it fascinates me that people don't seem to discuss what appears to me to be a most obvious fatal flaw in bitcoin.

ie: The transaction fee model will not support the cost of block creation.  Bitcoin will lose hashing power in the future when block reward coin generation drops off faster than the increase in bitcoin price.

The transaction fee model will not work because you can potentially exchange bitcoins outside the system which doesn't generate any fees for the miners.  For example, you can do this at the moment by physically  printing out the public and private keys to a wallet and physically passing these around in a tamper proof way instead of transferring the coins by way of a transaction within the system-- this is how Casascius coin works.   At the moment these off-chain transfers cannot be done electronically and require that you trust the person that creates the item that is exchanged.  However, soon transferring coins outside the system will be very easy to do since we are currently entering a new era of secure computing where everyday desktop computers and phones will allow you to exchange these key pairs in a secure, non-exploitable way.  This technology is the same that the media companies are demanding that all computers must have to prevent illegal copying of content.  Once someone creates the software to exchange coins this way it will become the most popular way to exchange coins since it is  totally free and instant-- at this point, hardly any coins will be exchanged on the network and hence no transactions fees will be collected by the miners and hence no-one will mine anymore and ultimately bitcoin FAILS.
 
There are various solutions to this problem, but most require hard forks:  listed below are just some
1) Infinite coin supply-- don't 1/2 the block reward every 4 years- instead at some point (say 12 years in the future stop the block halvings).   Note: If you have a constant reward eventually the coin supply will more or less balance out the rate of coin loss so you won't actually end up with an inifinite number of coins.
2) Satoshi Dice and similar services which use the block chain, requiring people to make transactions in the chain (eg: introduce namecoin domain name service, voting services, registration services, proof-that-something-has-happened services)
3) Demurrage where the miners get a fixed amount of the total supply every year, like freicoin.
4) Other schemes similar to demurrage where the miners get rewarded directly from people's wallets without them having to make transactions--eg: long term non-active wallets trigger an expiry date that allows miners to collect its contents.  

Please explain to be why this is not considered the major problem with bitcoin and why it is not discussed on this forum.

(PS:   I personally like the idea of expiry-dates for non-active wallets since it froces people to make a transaction before the expiry or they lose the money (or maybe just a percentage of it)- so the miners can make money by transaction fees and reclaiming dead coin. Am thinking of creating a new coin system based on it-- does one like this already exist though?)