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My largest Bitcoin question is this; Bitcoin's continued growth requires the addition of new coins to pay for the cost of verifying transactions. This creates p
by Dangeranger 9y ago
My largest Bitcoin question is this; Bitcoin's continued growth requires the addition of new coins to pay for the cost of verifying transactions. This creates pressure for the price of Bitcoin relative to the dollar to increase, leading to deflation of the dollar, and most other currencies relative to Bitcoin. This will lead to one of two conclusions.
Either the hyper-valuation of Bitcoin relative to fiat currencies continues above the rate of rise for the cost of verification, or it doesn't.
If the accelerated price of Bitcoin fails to outstrip the rise in cost, due to public perception, regulation or any other reason then the network will cease verification and exchange within the network will stop.
If the accelerated price does continue to outstrip the rise in cost, then people won't sell their Bitcoins because they will be worth more tomorrow than they are today. So exchange outside the network will stop.
So in both scenarios you have a cease of exchange, the only difference is that one ceases within the network and one outside the network.
Isn't this a failure in both cases?
- dnautics 9y ago> Bitcoin's continued growth requires the addition of new coins to pay for the cost of verifying transactions Huh?
- tlrobinson 9y ago> If the accelerated price of Bitcoin fails to outstrip the rise in cost, due to public perception, regulation or any other reason then the network will cease verification and exchange within the network will stop. The mining “difficulty” automatically adjusts every 2 weeks to always target 10 minute blocks. If the price drops dramatically it can temporarily slow block creation, especially if a different cryptocurrency (with the same mining algorithm) is more profitable to mine, but it will eventually adjust.