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Cryptocurrency are inefficient by the design only at creation. But once mined, in principle with the right setup transactions can be arbitrary cheap. It is simi
by fpoling 6y ago
Cryptocurrency are inefficient by the design only at creation. But once mined, in principle with the right setup transactions can be arbitrary cheap. It is similarly as with gold. It is expensive to dig it once, but once a coin is minted, it can be used for millions of transaction making transaction cost rather low.
- newswasboring 6y agoActually your analogy is flawed. Because the way bitcoin works you have to pay some energy cost per block and you have a limited time to use that block because the next block will be coming in in 10 mins. It would be more like we had to make new coins every 10 mins. Or am I missing something here?
- fpoling 6y agoBitcoin probably is not fixable, but other designs are much better at supporting cheap transactions. There is nothing inherently expensive in maintaining the block chain.
- newswasboring 6y agothis thread is about bitcoins. So I thought its implied we are talking about bitcoin. Maintaining a POW block chain is inherently wasteful, but yes POS blockchains can maybe save this.
- fpoling 6y agoEven with bitcoins just consider what happens once all bitcoins are mined. Does the whole thing collapse? Or do bitcoins continue to be used similar to POS?
- newswasboring 6y agoThe block mining algorithm doesn't change, right? So I don't see how it will move to POS. That will require some sort of buy in from the users. Every time something new is introduced in Bitcoin the legacy remains and the new ideas fork the chain into their own thing. Usually these alternatives either die or ignored.
- dragontamer 6y agoThen the transaction fees associated with every transaction fund the miners.
- rwoerz 6y agoCould you elaborate on that? How can future transactions be accommodated if everyone stops mining new blocks?
- dmnd 6y agoMiners get compensated by transaction fees too.
- NickM 6y agoThis is completely incorrect. Transactions are processed as part of mining. You cannot simply stop mining and continue doing transactions for free; the whole point of the mining process in a PoW cryptocurrency is that mined coins are given out as a reward for helping to secure transactions.
- criddell 6y agoWhat happens when all the bitcoins are mined? There still has to be some settlement process or else the blockchain ends.
- cstein2 6y agoMiners are incentivised with transaction fees alone after all the bitcoins are mined.
- throwaheyy 6y agoMining continues but the reward comes solely from transaction fees.
- marcosdumay 6y ago> What happens when all the bitcoins are mined? Then miners will get only the transaction fees. But it's still the same process. (Anyway, that won't happen, the number of available BTC to mining will asymptoptically approach 0, but will never get there.)
- cdiddy2 6y agoNo, new bitcoins run out around 2140. From then on there will be no new bitcoin
- SamBam 6y agoThe algorithm makes it such that the last coin will be mined sometime around 2140. My assumption is that people just plan on moving to another fork before that point.