4 ms·

What jig would be up? Mining as profiteering? For sure, and the end of mining is an inevitability. Bitcoin as currency could continue though, no?

ironSkillet 4y ago
The end of mining is the end of bitcoin. If there are no miners contributing to create the network consensus, then anyone can come in with a 51% attack and destroy the integrity of the block chain.
hn_throwaway_99 4y ago
By "the jig is up" I mean that the vast majority of reason people invest in Bitcoin is as a speculative investment. If it stays flat for 10 years, it loses its appeal as a speculative investment, and then would collapse. The other reason some "true believers" (or, as I refer to them, insane cultists) invest in Bitcoin is because they believe it will be "the world's currency", i.e. that it will replace major currencies like the dollar. But, were that to occur, it's market cap would skyrocket, at which point it would require a planet-and-a-half's worth of energy to stay secure, which is also not happening.
- dmichulke 4y ago
  > at which point it would require a planet-and-a-half's worth of energy to stay secure Ehm, either that or the price of energy increases or the percentage of reward per block mined to mcap decreases.
  - buzzin_ 4y ago
    No, total dollar amount of electricity expenses spent on mining does not depend on the price of electricity. Today, miners are getting paid about $1.5 billion per month. If they like money, they will keep adding new miners and run them until they all in total spend less than, but close to that amount. So, $1.5 billion per month of fresh money needed to offset this pressure on Bitcoin price. There goes the argument that Bitcoin is a good "store of value."
    - dmichulke 4y ago
      > total dollar amount of electricity expenses spent on mining does not depend on the price of electricity I agree. As far as I understood the issue was not with the money spent on energy but with the energy spent, no? > So, $1.5 billion per month of fresh money needed to offset this pressure on Bitcoin price. If I understand correctly, you're saying that BTC inflation is a problem and I believe this is true, both in the economic and ecological sense. But there was no way in 2009 to foresee the optimal inflation rate (halving every 4 years isn't too bad actually) and modifying it now defeats the founding principles of BTC, so it'd be a big no no. So it was kind of a trade off and will continue to be, every 4 years a bit less though unless we hit hyperbitcoinization. From an economic point of view the investment into bitcoin is only ever relative to other assets and most of them inflate far more (relative to their mcap).
- clarkmoody 4y ago
  With a price collapse, the energy consumption would also collapse, no? > require a planet-and-a-half's worth of energy to stay secure, which is also not happening But what are the implications if it does?

ironSkillet 4y ago

The end of mining is the end of bitcoin. If there are no miners contributing to create the network consensus, then anyone can come in with a 51% attack and destroy the integrity of the block chain.

hn_throwaway_99 4y ago

By "the jig is up" I mean that the vast majority of reason people invest in Bitcoin is as a speculative investment. If it stays flat for 10 years, it loses its appeal as a speculative investment, and then would collapse. The other reason some "true believers" (or, as I refer to them, insane cultists) invest in Bitcoin is because they believe it will be "the world's currency", i.e. that it will replace major currencies like the dollar. But, were that to occur, it's market cap would skyrocket, at which point it would require a planet-and-a-half's worth of energy to stay secure, which is also not happening.

dmichulke 4y ago
> at which point it would require a planet-and-a-half's worth of energy to stay secure Ehm, either that or the price of energy increases or the percentage of reward per block mined to mcap decreases.
- buzzin_ 4y ago
  No, total dollar amount of electricity expenses spent on mining does not depend on the price of electricity. Today, miners are getting paid about $1.5 billion per month. If they like money, they will keep adding new miners and run them until they all in total spend less than, but close to that amount. So, $1.5 billion per month of fresh money needed to offset this pressure on Bitcoin price. There goes the argument that Bitcoin is a good "store of value."
  - dmichulke 4y ago
    > total dollar amount of electricity expenses spent on mining does not depend on the price of electricity I agree. As far as I understood the issue was not with the money spent on energy but with the energy spent, no? > So, $1.5 billion per month of fresh money needed to offset this pressure on Bitcoin price. If I understand correctly, you're saying that BTC inflation is a problem and I believe this is true, both in the economic and ecological sense. But there was no way in 2009 to foresee the optimal inflation rate (halving every 4 years isn't too bad actually) and modifying it now defeats the founding principles of BTC, so it'd be a big no no. So it was kind of a trade off and will continue to be, every 4 years a bit less though unless we hit hyperbitcoinization. From an economic point of view the investment into bitcoin is only ever relative to other assets and most of them inflate far more (relative to their mcap).
clarkmoody 4y ago
With a price collapse, the energy consumption would also collapse, no? > require a planet-and-a-half's worth of energy to stay secure, which is also not happening But what are the implications if it does?