Sorry noob question here... What does halving mean? Why will there be one soon?
About every four years, the amount of bitcoins mined per block is cut in half.
Topic: Why is the value dropping? (Read 4324 times)
About every four years, the amount of bitcoins mined per block is cut in half.
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Electrical costs of generating are matching costs of production
Without any other marginal benefits
So guess its close to par for now.
Without any other marginal benefits
So guess its close to par for now.
Sorry noob question here... What does halving mean? Why will there be one soon?
Block reward halving, meaning the miners will get 50% less coin for solving a block. This makes mining less profitable by decreasing BTC inflation, which is ~10% now. It will happen sometime in 2016.
Sorry noob question here... What does halving mean? Why will there be one soon?
The reason why its dropping is because of miners. They keep dumping and dumping to pay for their rigs. Also GPU miners are suffering also.
There has to be a halving soon.
There has to be a halving soon.
GPU miners? Wtf? Is it 2012?
The reason why its dropping is because of miners. They keep dumping and dumping to pay for their rigs. Also GPU miners are suffering also.
There has to be a halving soon.
There has to be a halving soon.
Yeah, I think that most of the users here aren't exactly educated nor experienced in the world of finance.
This is probably true, I know very little about economics. That is why I posted this thread in the first place so you guys can explain it. I have been learning a lot reading through this.
^Just a minor correction: A "centrally controlled elastic reward" would make Bitcoin irrelevant. The cool/interesting thing about Bitcoin is it doesn't rely on central authority. With centrally-controlled elastic reward, that's gone.
Just a clumsier version of fiat.
Just a clumsier version of fiat.
right now you need a sustained growth of 10%+ annually of the userbase only to hold value.
inflation = necessary growth of the userbase-money to hold value (no matter what the valuation/marketcap is)
my approach would be "make inflation reasonably low and let the free market sort out the rest"
satoshi made a little mistake there with the rewarddecrease. Didn't foresee the marketforces on high marketcap correctly.
There is now the option for the community to go through it with pain for the next 6 to 10 years or to correct that either in bitcoin itself or in form of an altcoin/new coin that offers an solution to that. (my 2 cents)
(was edited)
inflation = necessary growth of the userbase-money to hold value (no matter what the valuation/marketcap is)
my approach would be "make inflation reasonably low and let the free market sort out the rest"
satoshi made a little mistake there with the rewarddecrease. Didn't foresee the marketforces on high marketcap correctly.
There is now the option for the community to go through it with pain for the next 6 to 10 years or to correct that either in bitcoin itself or in form of an altcoin/new coin that offers an solution to that. (my 2 cents)
(was edited)
You seem to be overlooking the important bit:
TL;DR: There's nothing you can do about Satoshi's mistake now. That's the fatal flaw of predetermined inflation.
...
Which brings me to my original point: In fiat economy, it's possible to adjust to predicaments like this, in Bitcoin it is not.
In other words, if I agreed with you that block reward is too high, we could do something about it, like make it smaller. As it stands, there's nothing we can do, short of scrapping Bitcoin and starting from scratch. Making all this just empty rhetoric.
See?
Which brings me to my original point: In fiat economy, it's possible to adjust to predicaments like this, in Bitcoin it is not.
In other words, if I agreed with you that block reward is too high, we could do something about it, like make it smaller. As it stands, there's nothing we can do, short of scrapping Bitcoin and starting from scratch. Making all this just empty rhetoric.
See?
TL;DR: There's nothing you can do about Satoshi's mistake now. That's the fatal flaw of predetermined inflation.
Either the notion of "we need all the hashpower to make network secure" is junk, or Bitcoin will also be more vulnerable to attack [potentially making it less attractive to investors].
[...]
Again: Lower rewards = lower network security, higher rewards = higher network security.
there is the logical fault.
"Lower rewards = lower network security, higher rewards = higher network security"
is not 100% correct because:
"Lower rewards also = hgher pricestability, higher scarcity, higher valuation and ultimately = more investement" which in turn makes mining more profitable (more network security)
I'd say at the point where real investement happens (real money comes in) it doesn't make so much difference for the miner if he mines less coins and sells them for more or mines more coins and dumps down the market. It is just: the miners dumping constantly keeps away investors , makes mining unprofitable, causes centralisation faster and in the long run makes network less secure maybe even (would remain to be seen)
also: lower rewards/inflation gives additional sellingpoint for the coin. Right now with 10% inflation btc is no competition to fiatmoney of the western world only to countries with higher than 10% inflation.
.@smalltimer: Could you explain why large block rewards encourage centralisation, while smaller ones discourage it? Buying mining gear in quantity will still be cheaper, building megafarms in cold climates with low industrial energy costs will still be cheaper.
What am I missing?
What am I missing?
sure, large rewards give miners in general more power over the market and the big ones of course dump harder enforcing competition making monopoly-porcess even faster.
Right now large miners dumping making it even harder for small ones to exist.
Large rewards are equally large for both hobby and commercial miners. If small rewards are sufficient to make small farms profitable, surely they're sufficient to make big ones profitable also. Hashrate eventually increases to the point of making small mines unprofitable, while large ones continue operating.
Just what we see happening now.
Quote
IF miners would not be such a force/impact on the market they would only compete on the level you pointed out and not directly in the markets.
This in no way affects centralization.
Quote
On top of that: bitcoin would be less volatile, would hold value better and would attract therefore more investors.
Either the notion of "we need all the hashpower to make network secure" is junk, or Bitcoin will also be more vulnerable to attack [potentially making it less attractive to investors].
Quote
PLUS: if halvings were faster, inflation lower and valuation better miners would be holding the coins they mine because appreciation in price would be anticipated.
So really the high inflation in bitcoin is a deadly mistake
So really the high inflation in bitcoin is a deadly mistake
Again: Lower rewards = lower network security, higher rewards = higher network security. This is the basic premise on which Bitcoin network was built. In hindsight, it's easy to say that miners should not be rewarded as much as they are, but, at the outset, it wasn't. Which brings me to my original point: In fiat economy, it's possible to adjust to predicaments like this, in Bitcoin it is not.
In other words, if I agreed with you that block reward is too high, we could do something about it, like make it smaller. As it stands, there's nothing we can do, short of scrapping Bitcoin and starting from scratch. Making all this just empty rhetoric.
See?
OP, don't worry about bitcoin value drop
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions
Current price is down because of lack of knowledge, fear and general lack of interest. We'll see.
if you look at the charts: who can be selling coins with profit right now? Only miners or people who bought before last November and i tell you it's the miners.
OP, don't worry about bitcoin value drop
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions
Current price is down because of lack of knowledge, fear and general lack of interest. We'll see.
OP, don't worry about bitcoin value drop
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions
bitcoin is on the way to a stable growth and in 2015 you will see bitcoin's value increasing
current price dropped bcoz of some international financial decisions
Sublime5447: The abundance model sounds like a great way to create a cascading credit crisis to me. Kind of like Ripple. What am I missing?
The credits must be redeemable, you can only issue credits that you have the ability to redeem in good or services. It would have to be tied to a reputation keeper.
Can you expand on that? I don't see how you could 100% guarantee an issuer has the ability and willingness to redeem the credits they issue.
Nothing is 100 percent sure, it is not my proposal, it is Paul Grignon's (the creator of money as debt)
Link to proposal http://www.moneyasdebt.net/
https://www.youtube.com/watch?v=XyWfUqEyIZc it is important to note that perpetual coin is just the standard and does not circulate.
Sublime5447: The abundance model sounds like a great way to create a cascading credit crisis to me. Kind of like Ripple. What am I missing?
The credits must be redeemable, you can only issue credits that you have the ability to redeem in good or services. It would have to be tied to a reputation keeper.
Can you expand on that? I don't see how you could 100% guarantee an issuer has the ability and willingness to redeem the credits they issue.
.@smalltimer: Could you explain why large block rewards encourage centralisation, while smaller ones discourage it? Buying mining gear in quantity will still be cheaper, building megafarms in cold climates with low industrial energy costs will still be cheaper.
What am I missing?
What am I missing?
sure, large rewards give miners in general more power over the market and the big ones of course dump harder enforcing competition making monopoly-process even faster.
Right now large miners dumping making it even harder for small ones to exist.
IF miners would not be such a force/impact on the market they would only compete on the level you pointed out and not directly in the markets.
On top of that: bitcoin would be less volatile, would hold value better and would attract therefore more investors.
PLUS: if halvings were faster, inflation lower and valuation better miners would be holding the coins they mine because appreciation in price would be anticipated.
So really the high inflation in bitcoin is a deadly mistake
In bitcoin right now it is: "who can offer more cheaper to drive the others out of buisiness?"
only possible because they are allowed to mine significant number of coins every day.
if they were given less power over the market this effect would be contained.
.@smalltimer: Could you explain why large block rewards encourage centralisation, while smaller ones discourage it? Buying mining gear in quantity will still be cheaper, building megafarms in cold climates with low industrial energy costs will still be cheaper.
What am I missing?
What am I missing?
Coins would be issued into existence instead on being created through mining.
which doesn't provide any security for the network, it does just bring in central control. So really brilliant idea right there
How are you doing transactions without miners? Go POS-coin? (lol)
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