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The natural scenario is that as the mining reward goes down, hash rate will dwindle until mining is profitable again. The only real problem with that is that w

by javert 5y ago

The natural scenario is that as the mining reward goes down, hash rate will dwindle until mining is profitable again. The only real problem with that is that with a small hash rate, bitcoin can be attacked more easily. If bitcoin is the monetary backbone for many nations, they will subsidize miners to maintain the balance of power. That is the actual scenario that I'm optimistically predicting. If bitcoin isn't the monetary backbone for many nations, by then, then it's probably a failure, and should probably be allowed to die. It's also very possible that transactions fees alone actually will be sufficient to support a high enough amount of hash power to secure the network.

meribold 5y ago
I don't see why many nations would jump at the opportunity to make Bitcoin their monetary backbone. For example because an immutable monetary policy won't be seen as a feature.
- nybble41 5y ago
  > For example because an immutable monetary policy won't be seen as a feature. Each nation would love to be able to manipulate the supply itself—why not, if people will let you get away with it?—but the fact that other nations can't do the same could be seen as a feature.
  - meribold 5y ago
    If that's how it's going to work, what stopped nations from making a treaty in which everyone commits to an immutable monetary policy so far? And how does Bitcoin result in whatever it was not being a showstopper anymore?
    - nybble41 5y ago
      Many countries already use money internally such as the USD (outside the US) or Euro (outside the EU) for which they do not control the policy. Explicit agreements to use a common currency across nations and share control of the policy are relatively rare; no examples come to mind apart from the EU, and that hasn't always gone according to plan, as Greece can attest. But hard currency is still a fairly common basis for exchange between nation-states, and other countries' currencies are more likely to be adopted when they are governed by relatively immutable policies. Of course, if those policies change to be less immutable it can take time for the effects to manifest. The USD was relatively stable until recently, but other countries are probably reconsidering their dependence on it at this point given the increase in the supply over the past few years. If Bitcoin does eventually become a common instrument of trade at this level it will fill the same niche currently occupied by gold and other precious metals.
meribold 5y ago
> It's also very possible that transactions fees alone actually will be sufficient to support a high enough amount of hash power to secure the network. I have to admit that I have no idea how much work is actually needed to secure the network. My point of view is that the current rate of energy expenditure outweighs whatever benefit Bitcoin does or could provide to society. But if this rate is a transient result of still-significant minting going on, things could definitely look different in the future. Do you know of any analyses on how much work really has to be continuously expended in order for Bitcoin to remain reasonably secure at a given market capitalization?

by javert 5y ago

meribold 5y ago

I don't see why many nations would jump at the opportunity to make Bitcoin their monetary backbone. For example because an immutable monetary policy won't be seen as a feature.

nybble41 5y ago
> For example because an immutable monetary policy won't be seen as a feature. Each nation would love to be able to manipulate the supply itself—why not, if people will let you get away with it?—but the fact that other nations can't do the same could be seen as a feature.
- meribold 5y ago
  If that's how it's going to work, what stopped nations from making a treaty in which everyone commits to an immutable monetary policy so far? And how does Bitcoin result in whatever it was not being a showstopper anymore?
  - nybble41 5y ago
    Many countries already use money internally such as the USD (outside the US) or Euro (outside the EU) for which they do not control the policy. Explicit agreements to use a common currency across nations and share control of the policy are relatively rare; no examples come to mind apart from the EU, and that hasn't always gone according to plan, as Greece can attest. But hard currency is still a fairly common basis for exchange between nation-states, and other countries' currencies are more likely to be adopted when they are governed by relatively immutable policies. Of course, if those policies change to be less immutable it can take time for the effects to manifest. The USD was relatively stable until recently, but other countries are probably reconsidering their dependence on it at this point given the increase in the supply over the past few years. If Bitcoin does eventually become a common instrument of trade at this level it will fill the same niche currently occupied by gold and other precious metals.

meribold 5y ago

> It's also very possible that transactions fees alone actually will be sufficient to support a high enough amount of hash power to secure the network. I have to admit that I have no idea how much work is actually needed to secure the network. My point of view is that the current rate of energy expenditure outweighs whatever benefit Bitcoin does or could provide to society. But if this rate is a transient result of still-significant minting going on, things could definitely look different in the future. Do you know of any analyses on how much work really has to be continuously expended in order for Bitcoin to remain reasonably secure at a given market capitalization?