Will the blockchain become Too Big to Fail?

pereira4

legendary

Activity: 1610

Merit: 1183

Quote from: Asrael999 on June 11, 2015, 08:26:40 AM

Quote from: oblivi on June 09, 2015, 05:48:56 PM

These guys fall into the assumption that the blockchain can exist without a healthy Bitcoin which is nonsense. If the blockchain is a success, it means Bitcoin is doing great because is the native currency in which miners get paid to keep the blockchain going. Everyone will be using Bitcoin, even if they don't know they are using Bitcoin, as the Winklevoss brothers pointed out. It will be the underlying mechanism of all future electronic transactions.

a blockchain can exist without a healthy bitcoin. (if we define healthy as one that makes mining profitable)

Miners can have incentives to operate without making a profit on mining. Mining companies that have diversified revenue streams, generating fiat - including hashpower rental, exchange services etc, would have an incentive to continue to operate the network regardless of it being profitable purely from mining.

Bitpay, or coinbase for example would have an interest in operating a transaction confirmation service (mining) in order to maintain their business models so long as the potential cost of operating the miners was lower than the potential profit from the service that the blockchain enabled.

Don't assume that mining has to be a source of profit for miners - the blockchain enables other services to be offered to customers - so long as those services can generate revenue someone will have an incentive to maintain the blockchain - even at a loss from mining alone.

"a blockchain can exist without a healthy bitcoin. (if we define healthy as one that makes mining profitable)"

I think this reasoning is fundamentally flawed. It's clear that every blockchain needs a token, in this case Bitcoin is the strongest one.
The more infrastructures and systems running under the BTC blockchain, the more money invested in mining, because these big companies depend on a strong network. The more companies depend on Bitcoin, the higher the price due that fact alone, it becomes even more valuable regardless mainstream adoption or not. And miners will always get rewards in the native currency (Bitcoin) before anything else. The more miners, higher difficulty.. everything is interrelated. There's no scape from a higher Bitcoin price if Bitcoin is a success in any shape or form, if this correlation is not seen then the price is temporarily manipulated.

MUFC

hero member

Activity: 500

Merit: 500

Quote from: Amph on June 11, 2015, 08:15:46 AM

Quote from: MUFC on June 11, 2015, 06:20:47 AM

Quote from: Amph on June 10, 2015, 04:09:16 AM

it is already to big to fall, i read once an article that was comparing it to others network, and blockchain was the biggest one among all of those others, if something like this fall, it is easy to assume that before it those other network will fall first

also add to this the fact that banks are very interested to it, will help it to not fall

Nothing is too big too fail. How do you think the blockchain would keep running if the bitcoins the miners get paid become worthless or next to worthless? Miners aren't going to run it for free or at a loss so it would grind to a halt very fast. Bitcoin needs to remain profitable to keep it going and if it becomes unprofitable it will cease to exist.

by this logic, one could argue, that bitcoin must rise in price, at all cost, otherwise in 2140 when there will be fees only, and a shitty price, miners will not be able to sustain the network, and thus bitcoin will die at 100%

It will need to rise in price proportionally less of course miners will not continue to mine if they're losing money. They wont continue to support the network if the fees aren't enough to sustain it either.

Asrael999

hero member

Activity: 703

Merit: 502

Quote from: oblivi on June 09, 2015, 05:48:56 PM

These guys fall into the assumption that the blockchain can exist without a healthy Bitcoin which is nonsense. If the blockchain is a success, it means Bitcoin is doing great because is the native currency in which miners get paid to keep the blockchain going. Everyone will be using Bitcoin, even if they don't know they are using Bitcoin, as the Winklevoss brothers pointed out. It will be the underlying mechanism of all future electronic transactions.

a blockchain can exist without a healthy bitcoin. (if we define healthy as one that makes mining profitable)

Miners can have incentives to operate without making a profit on mining. Mining companies that have diversified revenue streams, generating fiat - including hashpower rental, exchange services etc, would have an incentive to continue to operate the network regardless of it being profitable purely from mining.

Bitpay, or coinbase for example would have an interest in operating a transaction confirmation service (mining) in order to maintain their business models so long as the potential cost of operating the miners was lower than the potential profit from the service that the blockchain enabled.

Don't assume that mining has to be a source of profit for miners - the blockchain enables other services to be offered to customers - so long as those services can generate revenue someone will have an incentive to maintain the blockchain - even at a loss from mining alone.

Amph

legendary

Activity: 3206

Merit: 1069

Quote from: MUFC on June 11, 2015, 06:20:47 AM

Quote from: Amph on June 10, 2015, 04:09:16 AM

it is already to big to fall, i read once an article that was comparing it to others network, and blockchain was the biggest one among all of those others, if something like this fall, it is easy to assume that before it those other network will fall first

also add to this the fact that banks are very interested to it, will help it to not fall

Nothing is too big too fail. How do you think the blockchain would keep running if the bitcoins the miners get paid become worthless or next to worthless? Miners aren't going to run it for free or at a loss so it would grind to a halt very fast. Bitcoin needs to remain profitable to keep it going and if it becomes unprofitable it will cease to exist.

by this logic, one could argue, that bitcoin must rise in price, at all cost, otherwise in 2140 when there will be fees only, and a shitty price, miners will not be able to sustain the network, and thus bitcoin will die at 100%

i think a restart it is always possible, in the case the network crash in the future

MUFC

hero member

Activity: 500

Merit: 500

Quote from: Amph on June 10, 2015, 04:09:16 AM

it is already to big to fall, i read once an article that was comparing it to others network, and blockchain was the biggest one among all of those others, if something like this fall, it is easy to assume that before it those other network will fall first

also add to this the fact that banks are very interested to it, will help it to not fall

Nothing is too big too fail. How do you think the blockchain would keep running if the bitcoins the miners get paid become worthless or next to worthless? Miners aren't going to run it for free or at a loss so it would grind to a halt very fast. Bitcoin needs to remain profitable to keep it going and if it becomes unprofitable it will cease to exist.

Fabrizio89

hero member

Activity: 924

Merit: 1000

Storing a great deal of informations and contracts would partly assure it will being kept secure and running

Pkuwag

member

Activity: 87

Merit: 10

I don't very understand what you mean, why bigger blockchain would to fall??? I think it's the more bigger, the more better.

Pecunia non olet

full member

Activity: 882

Merit: 102

PayAccept - Worldwide payments accepted in seconds

tl,dr

bloatchain will be so big it fails?

Natalia_AnatolioPAMM

full member

Activity: 280

Merit: 100

Quote from: Nrcewker on June 10, 2015, 04:54:41 AM

so they say that blockchain not bitcoin, bitcoin may fail but blockchain can live

but what about others who say that bitcoin = blockchain?

gentlemand

legendary

Activity: 2590

Merit: 3008

Welt Am Draht

Quote from: spazzdla on June 10, 2015, 03:41:19 PM

NOTHING is too big to fail..

Perhaps to big to jail but never to big to fail. One of the stupidest ideas of our "leaders".

I assume in this context 'failure' is about it dying from indifference or being usurped by an alternate system.

With that in mind there might come a point where there are more people incentivised to keep things chugging along than there are people out to damage it or supersede it. There'll always be plenty who don't care about it. I think that moment's a long time out yet.

techgeek

hero member

Activity: 826

Merit: 1000

Quote from: jbrnt on June 10, 2015, 03:42:11 PM

The US government do not care about bitcoin. Bitcoin can fail tomorrow and no governement will lift a finger to help. They will just say "I have warned you about Bitcoin and you didn't listen!"

There may be large investors involved, the Bitcoin community is still small and has no political power in any government. Governments are not threatened by a loss of votes or support if Bitcoin fails.

Well some governor was using bitcoin to raise his campaign, I forget his name.

But I actually saw it on reddits page, so people are considering it in some political sense, but thats about it.

BTCtrader71

hero member

Activity: 784

Merit: 1001

Quote from: jbrnt on June 10, 2015, 03:42:11 PM

The US government do not care about bitcoin. Bitcoin can fail tomorrow and no governement will lift a finger to help. They will just say "I have warned you about Bitcoin and you didn't listen!"

There may be large investors involved, the Bitcoin community is still small and has no political power in any government. Governments are not threatened by a loss of votes or support if Bitcoin fails.

That's true now. The question is whether this is going to change in the future. There are currently powerful people (i.e. people who have held or currently hold high-power positions in the financial and/or governmental sectors) who are starting to build financial infrastructure on top of the blockchain. What happens once this infrastructure starts being utilized?

jbrnt

hero member

Activity: 672

Merit: 500

The US government do not care about bitcoin. Bitcoin can fail tomorrow and no governement will lift a finger to help. They will just say "I have warned you about Bitcoin and you didn't listen!"

There may be large investors involved, the Bitcoin community is still small and has no political power in any government. Governments are not threatened by a loss of votes or support if Bitcoin fails.

spazzdla

legendary

Activity: 1722

Merit: 1000

NOTHING is too big to fail..

Perhaps to big to jail but never to big to fail. One of the stupidest ideas of our "leaders".

mrhelpful

legendary

Activity: 1456

Merit: 1002

Quote from: Nrcewker on June 10, 2015, 04:54:41 AM

so they say that blockchain not bitcoin, bitcoin may fail but blockchain can live

you need bitcoin in order to use the blockchain.. so they both go hand in hand.

those people are misinformed on how the blockchain works. Wink

Nrcewker

copper member

Activity: 2156

Merit: 536

Building my own Dreams!

so they say that blockchain not bitcoin, bitcoin may fail but blockchain can live

Amph

legendary

Activity: 3206

Merit: 1069

it is already to big to fall, i read once an article that was comparing it to others network, and blockchain was the biggest one among all of those others, if something like this fall, it is easy to assume that before it those other network will fall first

also add to this the fact that banks are very interested to it, will help it to not fall

azguard

legendary

Activity: 1484

Merit: 1001

Crypto-News.net: News from Crypto World

Quote

I'm guessing the other 99% wouldn't notice it's gone.

Dont be so sure. In my country most of them know what BTC is or digital currency for that mater. Now all mine but some small amount of them most of them work for it via some sig camp or got some programing or something else and most of them are on faucets and games (thinking that this will bring them fast cash).

Anyway we have lots of people who how or in some way are involved in this story. I agree that there is lot of them that dont know what BTC or any other digital currency is which is shame but give it time. In the beginning very little people are involved look at it now.

goosoodude

hero member

Activity: 584

Merit: 500

I don't think that the size of the blockchain is as important as other factors in bitcoin (mining network and node network). The way I think of it, the blockchain could be forked at any point of it's existance and is also highly dependant on miners and nodes.

randy8777

legendary

Activity: 896

Merit: 1000

Quote from: oblivi on June 09, 2015, 05:48:56 PM

These guys fall into the assumption that the blockchain can exist without a healthy Bitcoin which is nonsense. If the blockchain is a success, it means Bitcoin is doing great because is the native currency in which miners get paid to keep the blockchain going. Everyone will be using Bitcoin, even if they don't know they are using Bitcoin, as the Winklevoss brothers pointed out. It will be the underlying mechanism of all future electronic transactions.

blockchain and bitcoin both need each other, don't think anyone would disagree with that. i only think people expect too much from bitcoin. nothing wrong with it if bitcoin purely functions as an alternative to other services.

Topic: Will the blockchain become Too Big to Fail? (Read 1640 times)