Topic: The Future of Bitcoin mining (Read 1481 times)
i can make a transaction without any fee i can explain the method
Altcoins will hopefully tame the bitcoin bubble, increase liquidity, and get transactions flowing so people aren't just hording bitcoin for speculative purposes.
that's pretty the reason about the difficulty in the long run ,
because mining will becomes less profitable
because mining will becomes less profitable
Is that a possible vulnerability though? I recently tried to send a small amount of coin to someone (less than 1 euro's worth) and the 'fee' my wallet wanted to charge me was a substantial part of the payment.
One of the major draws of bitcoin was supposed to be that you didn't need to pay anyone to keep the system running.
Could the requirement for fees become so large that they become a significant frictional barrier for bitcoin use?
One of the major draws of bitcoin was supposed to be that you didn't need to pay anyone to keep the system running.
Could the requirement for fees become so large that they become a significant frictional barrier for bitcoin use?
They keep lowering the fee as the price increases.
The recommended fee at the moment is 0.1mBTC, which translates to ~0.1 dollar. That's a little bit high, but the core developers are working on a variable fee system in the next version of Bitcoin-QT. It can be even higher if you're trying to send BTC which comes from a lot of smaller payments to your wallet, because the size of the transaction is much larger which implies that the recommended fee is higher.
But to answer your questions, you can make a transaction without any fee, but it could happen that no miner will include it in their mined block. In the future the amount of fee should be more correlated to the actual value of BTC.
But to answer your questions, you can make a transaction without any fee, but it could happen that no miner will include it in their mined block. In the future the amount of fee should be more correlated to the actual value of BTC.
That's true, I'm just saying that fees are implemented i.a. for replacing the block award. It's also a tool to get your transaction through quickly.
Is that a possible vulnerability though? I recently tried to send a small amount of coin to someone (less than 1 euro's worth) and the 'fee' my wallet wanted to charge me was a substantial part of the payment.
One of the major draws of bitcoin was supposed to be that you didn't need to pay anyone to keep the system running.
Could the requirement for fees become so large that they become a significant frictional barrier for bitcoin use?
The fees will take the place of the block rewards. Hopefully Bitcoin is used much more then, so you can earn a good penny from mining. It will always be a continually balance between what can be earned from fees and rewards and the amount of hashing power. And of course some miners will drop out, but also the difficulty can drop.
The increase in difficulty can decrease, not the difficulty, right?
I think OP was referring to what would happen when mining will no longer occur. In that case, who knows? Someone could mine the rest of them with a quantum computer in 5 years.
If no one would mine anymore, then Bitcoin would be dead. If Bitcoin would be dead, no one would be mining anymore.
In case the quantum computer would become a success, I think we need a whole different system than Bitcoin. But that yields for every technology which uses encryption.
Mining doesn't need to be profitable forever.
Let's look at exchanges for example:
They only can profit from traders as long as the bitcoin-system works (and without mining it doesn't).
If MtGox, or BTCChina wants to keep making profits in the future, it'll be wiser to spend 10% of their profits on mining, than to lose 100% of their profits because the system doesn't work anymore.
And that's just one example,
actually everyone who wants (or profits from) a working network, be it speculators, daytraders, exchanges, merchants, younameit, has an incentive to keep the system running.
That's true, I'm just saying that fees are implemented i.a. for replacing the block award. It's also a tool to get your transaction through quickly. Let's look at exchanges for example:
They only can profit from traders as long as the bitcoin-system works (and without mining it doesn't).
If MtGox, or BTCChina wants to keep making profits in the future, it'll be wiser to spend 10% of their profits on mining, than to lose 100% of their profits because the system doesn't work anymore.
And that's just one example,
actually everyone who wants (or profits from) a working network, be it speculators, daytraders, exchanges, merchants, younameit, has an incentive to keep the system running.
The fees will take the place of the block rewards. Hopefully Bitcoin is used much more then, so you can earn a good penny from mining. It will always be a continually balance between what can be earned from fees and rewards and the amount of hashing power. And of course some miners will drop out, but also the difficulty can drop.
The increase in difficulty can decrease, not the difficulty, right?
I think OP was referring to what would happen when mining will no longer occur. In that case, who knows? Someone could mine the rest of them with a quantum computer in 5 years.
Mining doesn't need to be profitable forever.
Let's look at exchanges for example:
They only can profit from traders as long as the bitcoin-system works (and without mining it doesn't).
If MtGox, or BTCChina wants to keep making profits in the future, it'll be wiser to spend 10% of their profits on mining, than to lose 100% of their profits because the system doesn't work anymore.
And that's just one example,
actually everyone who wants (or profits from) a working network, be it speculators, daytraders, exchanges, merchants, younameit, has an incentive to keep the system running.
Let's look at exchanges for example:
They only can profit from traders as long as the bitcoin-system works (and without mining it doesn't).
If MtGox, or BTCChina wants to keep making profits in the future, it'll be wiser to spend 10% of their profits on mining, than to lose 100% of their profits because the system doesn't work anymore.
And that's just one example,
actually everyone who wants (or profits from) a working network, be it speculators, daytraders, exchanges, merchants, younameit, has an incentive to keep the system running.
The fees will take the place of the block rewards. Hopefully Bitcoin is used much more then, so you can earn a good penny from mining. It will always be a continually balance between what can be earned from fees and rewards and the amount of hashing power. And of course some miners will drop out, but also the difficulty can drop.
Hi, I'm still a stupid newbie and this has bugged me about bitcoin since I first read about it.
If I understand correctly, Bitcoin mining difficulty increases quite rapidly as more miners join the network. I think miners who want to make money need to keep buying newer better hardware to keep up. However I wonder about the long term prospects of this. Since there are a limited number of Bitcoins that will ever be created, will there not come a time when the money that can be made from mining will not be able to offset the power and hardware requirements to achieve it and the clouds of machines powering the bitcoin network will start to voluntarily drop out? What happens then?
I see that increases in bitcoin market price will delay this collapse, but surely Bitcoin won't increase in value indefinitely.
What do I misunderstand? Does Moore's law mean that the processing ability of hardware will outrun the difficulty curve in the long run? or will transaction fees power the network after mining becomes less profitable?
btw, I did read the introduction to mining on this site. https://bitcointalksearch.org/topic/if-youre-thinking-buying-mining-hardware-read-this-first-6566
It did not assuage my fears!
Edit:
I did find this addressed by the FAQ
https://en.bitcoin.it/wiki/Myths#After_21_million_coins_are_mined.2C_no_one_will_generate_new_blocks
But it actually doesn't sound too reassuring.
If I understand correctly, Bitcoin mining difficulty increases quite rapidly as more miners join the network. I think miners who want to make money need to keep buying newer better hardware to keep up. However I wonder about the long term prospects of this. Since there are a limited number of Bitcoins that will ever be created, will there not come a time when the money that can be made from mining will not be able to offset the power and hardware requirements to achieve it and the clouds of machines powering the bitcoin network will start to voluntarily drop out? What happens then?
I see that increases in bitcoin market price will delay this collapse, but surely Bitcoin won't increase in value indefinitely.
What do I misunderstand? Does Moore's law mean that the processing ability of hardware will outrun the difficulty curve in the long run? or will transaction fees power the network after mining becomes less profitable?
btw, I did read the introduction to mining on this site. https://bitcointalksearch.org/topic/if-youre-thinking-buying-mining-hardware-read-this-first-6566
It did not assuage my fears!
Edit:
I did find this addressed by the FAQ
https://en.bitcoin.it/wiki/Myths#After_21_million_coins_are_mined.2C_no_one_will_generate_new_blocks
But it actually doesn't sound too reassuring.
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