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My best hope is that there will be some kind of OPEC cartel that agrees to limit production. The members could have unused reserves of mining hardware that ramp
by VMG 9y ago
My best hope is that there will be some kind of OPEC cartel that agrees to limit production. The members could have unused reserves of mining hardware that ramps up when somebody violates the agreement.
- yyyyip 9y agoThe Bitcoin protocol contains an incrementally diminishing mining reward that prevents endless expansion of mining long term
- ZenoArrow 9y ago> "My best hope is that there will be some kind of OPEC cartel that agrees to limit production." Those limits were baked into the design from the start. In the current design there are only 21 million Bitcoins that can be mined, and we're approximately 80% of the way to that target. http://www.bitcoinblockhalf.com/ http://www.bitcoinblockhalf.com/ Also, Bitcoin is designed to be harder to come by as time goes on. The number of new coins issued diminishes over time. See the Supply Growth section here: https://en.wikipedia.org/wiki/Bitcoin https://en.wikipedia.org/wiki/Bitcoin "12.5 bitcoins per block (approximately every ten minutes) until mid 2020, and then afterwards 6.25 bitcoins per block for 4 years until next halving. This halving continues until 2110–40, when 21 million bitcoins will have been issued." There will come a time when Bitcoin mining is no longer profitable. If the scaling problems with the transactions are solved in time, we may see more people trading in Satoshis (fractions of a Bitcoin). The scaling problems are pretty hard to solve though, it's probably going to take a hard fork to make Bitcoin a true alternative to traditional government-backed currencies.
- VMG 9y agoI am aware of this, what I meant was a limit on hashrate
- ZenoArrow 9y agoHashrate is also limited by design: https://en.bitcoin.it/wiki/Difficulty#What_network_hash_rate_results_in_a_given_difficulty.3F https://en.bitcoin.it/wiki/Difficulty#What_network_hash_rate...
- VMG 9y agoEach miner has an incentive to outcompete other miners. A mining cartel can agree to keep difficulty and hashrate low. It is also comparable to a truce in a military conflict.
- ZenoArrow 9y ago> "A mining cartel can agree to keep difficulty and hashrate low." Won't work. If a mining cartel agrees to keep difficulty and hashrate low, they're just making it easier for those outside the cartel to mine more Bitcoin.
- VMG 9y agoWith unused mining hardware reserves they could smash outsiders by ramping up the hashrate. Cartels usually don't last forever, but they can last for a while. In the case of bitcoin, it could reduce total energy consumption.
- ZenoArrow 9y agoIn one comment you're suggesting a cartel should keep the hashing rate low, in another comment you're suggesting the same cartel should increase the hashing rate to keep out the competition. What are you really proposing? Keeping it low until any form of competition shows up? That competition is always likely to be a factor for as long as Bitcoin mining is popular.
- VMG 9y ago> Keeping it low until any form of competition shows up? Exactly. This is similar to how price dumping works: https://en.wikipedia.org/wiki/Dumping_(pricing_policy) https://en.wikipedia.org/wiki/Dumping_(pricing_policy)
- bdcravens 9y agoBitcoin Cash's "emergency difficulty adjustment" has seen a variation on this (miner's hold production, let the difficulty drop to a highly profitable level, and then turn the miners back on). It requires a high level of centralization however.
- CyberDildonics 9y agoThey didn't 'hold production' they mined the other chain.