6 ms·

Hopefully plain Bitcoin SHA-256 ASICs become more-or-less perfected and commoditized, leading to mining decentralization around local electricity deals.

• Alex3917 8y ago
  > leading to mining decentralization around local electricity deals. The amount of electricity it takes to secure the network is directly proportional to price. In order for BTC to replace traditional currency, it would require more electricity than the world currently produces each year.
  • deegles 8y ago
    Only if the expected return of mining is greater than the cost of the electricity. No one will spend $2 to get $1 worth of crypto.
    • n1c 8y ago
      Some people take the short-term risk, on the assumption that the crypto will be worth more in the future.
      • kgwgk 8y ago
        Even if they could buy twice as much at a exchange?
        • aeternus 8y ago
          Yes, but it isn't rational and probably won't persist once the novelty of mining wears off.
  • Obi_Juan_Kenobi 8y ago
    Correction: The electricity cost is directly related to mining rewards. As demand increases, so does price. So miners would purchase electricity at ever-higher marginal prices until an equilibrium is reached. Mining rewards come from the coinbase reward and txn fees. The coinbase rewards go down over time according to a schedule. Bitcoin is currently highly inflationary to create mining incentive, but we are rapidly approaching the 'long tail' part of coinbase rewards. Txn fee behavior is less predictable, and a source of significant conflict.
  • celticninja 8y ago
    There is no causal link between the two.