4 ms·

Wait a minute. From looking over the bitcoin site, the process for currency creation is based upon CPU processing power? The argument given for limiting wealth

by jeromec 16y ago

Wait a minute. From looking over the bitcoin site, the process for currency creation is based upon CPU processing power? The argument given for limiting wealth creation is that, once bitcoin was used enough to have real value, the expense for electricity to perform the calculation approaches a higher amount than would be profitable by doing something else... First, not all computers will utilize electricity uniformly to perform the "calculations". Some computers are just horribly inefficient. Also, it's certainly possible to construct more power efficient computing devices, and do so without even talking about upcoming nano-technology and processing at the atomic scale which would make electricity costs at a macro scale negligible for even the most hard core computing. So right off the bat the bitcoin market does skew its participants with non-uniformity, and a thesis that almost certainly won't hold up within 50 years.

kiba 16y ago
It is certainly possible to have more efficient computing devices, but then it will only increase the difficulty of the problems. The network adjust. More efficient computers will mine more bitcoins in the short run, but not any more in the long run. Even if it is extremely efficient, it is probably a lot easier to just trade for bitcoins.
- jeromec 16y ago
  But wouldn't the more efficient computers always have an advantage over less capable computers? In other words, for this system to be fair, even assuming the electricity cost argument held up which I don't think it could, wouldn't everyone participating need access to the same kind of computer? The required calculation would be the same for every computer in the network, right?
  - kiba 16y ago
    What would you propose to make the system more "fair" without destroying the value of bitcoin? beside, the point of bitcoin is not generating bitcoins. In fact, generating bitcoins does nothing to create any value. Bitcoins become more valuable when you can trade goods for it. Some guys get more chance at making the correct calculation that get him new bitcoins. Big deal. He get to buy 50 bitcoins worth of stuff. That's not a lot considering the exchange rate. Maybe it's 4 dollars at most. Don't forget that it won't be 50 bitcoins forever everytime you solve a problem. It will eventually be reduced to half and then half until nothingness years later. 21 million bitcoin limit. No more can be generated. Maybe it will be more rewarding to generate bitcoins when bitcoins are in extremely high use, but that mean more competition for mining bitcoins. All that does is increase the difficulty to the point of becoming unprofitable.

by jeromec 16y ago

kiba 16y ago

It is certainly possible to have more efficient computing devices, but then it will only increase the difficulty of the problems. The network adjust. More efficient computers will mine more bitcoins in the short run, but not any more in the long run. Even if it is extremely efficient, it is probably a lot easier to just trade for bitcoins.

jeromec 16y ago
But wouldn't the more efficient computers always have an advantage over less capable computers? In other words, for this system to be fair, even assuming the electricity cost argument held up which I don't think it could, wouldn't everyone participating need access to the same kind of computer? The required calculation would be the same for every computer in the network, right?
- kiba 16y ago
  What would you propose to make the system more "fair" without destroying the value of bitcoin? beside, the point of bitcoin is not generating bitcoins. In fact, generating bitcoins does nothing to create any value. Bitcoins become more valuable when you can trade goods for it. Some guys get more chance at making the correct calculation that get him new bitcoins. Big deal. He get to buy 50 bitcoins worth of stuff. That's not a lot considering the exchange rate. Maybe it's 4 dollars at most. Don't forget that it won't be 50 bitcoins forever everytime you solve a problem. It will eventually be reduced to half and then half until nothingness years later. 21 million bitcoin limit. No more can be generated. Maybe it will be more rewarding to generate bitcoins when bitcoins are in extremely high use, but that mean more competition for mining bitcoins. All that does is increase the difficulty to the point of becoming unprofitable.