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> Crypto-currency has inbuilt hierarchy, as people with more hashrate have proportional power over the monetary system. If this is the case, please illuminate
by rafaelero 5y ago
> Crypto-currency has inbuilt hierarchy, as people with more hashrate have proportional power over the monetary system.
If this is the case, please illuminate us why they don't use their influence to increase block size or block rewards.
- sudosysgen 5y agoIt's very simple. The price of Bitcoin converges towards the price of mining it. Making mining bitcoin easier will only lower its price in the long run. So increasing block size will only increase the amount of hashrate in the system and thus the profit per dollar invested will not change that much. Given this information, is it worth rocking the boat while mining is still very profitable? No.
- thekyle 5y ago> The price of Bitcoin converges towards the price of mining it. Isn't it the opposite. The cost of mining converges towards the current price of Bitcoin. Because when miners get Bitcoin as a reward they immediately sell it for profit.
- sudosysgen 5y agoWell, yes, you could see it that way.
- rafaelero 5y agoThat's a shortsighted approach, in my opinion. The same pattern is observed in inflation: long-term, money printing has zero benefits. Why central banks do it anyway? Because there's a first mover advantage. Also, history has already showed us that, when given the opportunity, miners are in favor of larger rewards.
- sudosysgen 5y agoNo, money printing has a serious advantage. It incentivize investment while taxing people who hold their money unproductively.
- rafaelero 5y agoYes, it incentivizes investing in better store of value like bitcoin (or gold, or Apple stocks).
- sudosysgen 5y agoApple is only protected from inflation insofar as it makes real investments. Bitcoin is not a very good and significant store of value.