6 ms·

What broke?

Kinnard 11y ago
It doesn't mean anything is broken. The recent rise in price justifies bringing miners online or shifting them away from other cryptocoins. Halving day is coming soon too.
- Mandatum 11y ago
  It's predicted to happen mid-2016, 70% of all coins to ever be mined have been so. This has been a really interesting tech to watch over the years.
  - austinjp 11y ago
    What happens when we reach 100%?
    - gnaritas 11y ago
      Then no new bitcoins will be created and all mining profits will come from fees. That won't happen until 2140.
      - poizan42 11y ago
        There's some very big ifs in that. We really have no idea what sort of breakthroughs might happen the next 125 years
        gnaritas 11y ago
        That's always true of the future, but the difficulty is continually self adjusting and pluggable and quantum proof algos exist so that'll be about the timeline no matter the power of future CPU's.
    - jonknee 11y ago
      We re-learn why a deflationary currency is an awful idea.
      - andys627 11y ago
        ELI5 por favor
        jonknee 11y ago
        http://www.economist.com/blogs/freeexchange/2014/04/money http://www.economist.com/blogs/freeexchange/2014/04/money Essentially, if you think that a currency will be worth more tomorrow than it is today there is little reason for investment (or even spending!). It quickly becomes a spiral where no one wants to spend. Inflation provides a nice kick in the pants for people to put their money to good use. This isn't a concern yet for Bitcoin because in the scheme of world economies BTC simply doesn't matter (it could go away tomorrow without any noticeable effects), but if in the future it becomes a critical thing it would be a major concern.
        kristianp 11y ago
        Aren't we learning in today's environment where prices of many things are going down (or with recent Japan as an example), that deflation isn't necessarily bad? In the past it is associated with recessions, but it may be a side effect of the recession or depression, or an over-adjustment by governments trying to reign in inflation. Economists agree: deflation is either good, or bad, or irrelevant: http://ftalphaville.ft.com/2015/03/23/2122452/economists-agree-deflation-is-either-good-or-bad-or-irrelevant/ http://ftalphaville.ft.com/2015/03/23/2122452/economists-agr...
        vezzy-fnord 11y ago
        Deflationary spirals are a hypothetical concern and mostly a fringe neo-Fisherian idea that has recently gained some mainstream nodding, but is otherwise difficult to verify in any way. For one thing it assumes a massive collective irrationality where people's expectations are all rendered berserk and plunged into a negative time preference. It's a very tough gambit to make that people can withdraw their propensity to consume to such a high extent. It's tough to presume that the heterogeneous stock of capital and the time structure of production will just stand still to a deflationary pressure and not readjust to add more stages or adjust the price spreads in between. [1] Of course, BTC being a global currency means it exists in competition and per Gresham's law can always be driven out. Not a catastrophe. [1] https://www.jstor.org/stable/2547921 https://www.jstor.org/stable/2547921
    - srdev 11y ago
      No more bitcoins, miners get funded by fees instead of the newly-minted coins.
    - everfree 11y ago
      Then blocks continue to be created, but no more coins are mined (in practice, we will be mining tiny little fractions of a coin for a very long time until it drops off to true zero).
      - rinze 11y ago
        If no more coins are mined (or the mining rate drops to almost negligible levels), is there still any incentive for people to keep the blockchain alive by computing power? Aside from keeping the whole system alive, I mean.
        presty 11y ago
        yes, transaction fees
        rlpb 11y ago
        When you request a transaction you also offer a fee. You get to set the fee. If miners don't like it they don't have to include your transaction, and if that happens your transaction will not get confirmed. After no more coins are mined, miners will be relying entirely on transaction fees. At that point, competition will show us the real cost (and electricity used) for transactions. Right now transaction fees are low(er) because miners can offset their costs against the coins that they mine as well.
    - ori_b 11y ago
      Transaction fees.

What broke?

It doesn't mean anything is broken. The recent rise in price justifies bringing miners online or shifting them away from other cryptocoins. Halving day is coming soon too.

Mandatum 11y ago
It's predicted to happen mid-2016, 70% of all coins to ever be mined have been so. This has been a really interesting tech to watch over the years.
- austinjp 11y ago
  What happens when we reach 100%?
  - gnaritas 11y ago
    Then no new bitcoins will be created and all mining profits will come from fees. That won't happen until 2140.
    - poizan42 11y ago
      There's some very big ifs in that. We really have no idea what sort of breakthroughs might happen the next 125 years
      - gnaritas 11y ago
        That's always true of the future, but the difficulty is continually self adjusting and pluggable and quantum proof algos exist so that'll be about the timeline no matter the power of future CPU's.
  - jonknee 11y ago
    We re-learn why a deflationary currency is an awful idea.
    - andys627 11y ago
      ELI5 por favor
      - jonknee 11y ago
        http://www.economist.com/blogs/freeexchange/2014/04/money http://www.economist.com/blogs/freeexchange/2014/04/money Essentially, if you think that a currency will be worth more tomorrow than it is today there is little reason for investment (or even spending!). It quickly becomes a spiral where no one wants to spend. Inflation provides a nice kick in the pants for people to put their money to good use. This isn't a concern yet for Bitcoin because in the scheme of world economies BTC simply doesn't matter (it could go away tomorrow without any noticeable effects), but if in the future it becomes a critical thing it would be a major concern.
        kristianp 11y ago
        Aren't we learning in today's environment where prices of many things are going down (or with recent Japan as an example), that deflation isn't necessarily bad? In the past it is associated with recessions, but it may be a side effect of the recession or depression, or an over-adjustment by governments trying to reign in inflation. Economists agree: deflation is either good, or bad, or irrelevant: http://ftalphaville.ft.com/2015/03/23/2122452/economists-agree-deflation-is-either-good-or-bad-or-irrelevant/ http://ftalphaville.ft.com/2015/03/23/2122452/economists-agr...
        vezzy-fnord 11y ago
        Deflationary spirals are a hypothetical concern and mostly a fringe neo-Fisherian idea that has recently gained some mainstream nodding, but is otherwise difficult to verify in any way. For one thing it assumes a massive collective irrationality where people's expectations are all rendered berserk and plunged into a negative time preference. It's a very tough gambit to make that people can withdraw their propensity to consume to such a high extent. It's tough to presume that the heterogeneous stock of capital and the time structure of production will just stand still to a deflationary pressure and not readjust to add more stages or adjust the price spreads in between. [1] Of course, BTC being a global currency means it exists in competition and per Gresham's law can always be driven out. Not a catastrophe. [1] https://www.jstor.org/stable/2547921 https://www.jstor.org/stable/2547921
  - srdev 11y ago
    No more bitcoins, miners get funded by fees instead of the newly-minted coins.
  - everfree 11y ago
    Then blocks continue to be created, but no more coins are mined (in practice, we will be mining tiny little fractions of a coin for a very long time until it drops off to true zero).
    - rinze 11y ago
      If no more coins are mined (or the mining rate drops to almost negligible levels), is there still any incentive for people to keep the blockchain alive by computing power? Aside from keeping the whole system alive, I mean.
      - presty 11y ago
        yes, transaction fees
      - rlpb 11y ago
        When you request a transaction you also offer a fee. You get to set the fee. If miners don't like it they don't have to include your transaction, and if that happens your transaction will not get confirmed. After no more coins are mined, miners will be relying entirely on transaction fees. At that point, competition will show us the real cost (and electricity used) for transactions. Right now transaction fees are low(er) because miners can offset their costs against the coins that they mine as well.
  - ori_b 11y ago
    Transaction fees.