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The only way bitcoins are being generated is by wasting computer cycles solving problems that are of no use to anyone. Krugman's problem is not with the concept
by pavanky 14y ago
The only way bitcoins are being generated is by wasting computer cycles solving problems that are of no use to anyone. Krugman's problem is not with the concept of bitcoin, but the process of mining.
I may not be an economist, but the method used for mining seemed.. illogical to me as well. If a bitcoin was released into the wild based on running real world problems like folding@home or something else it would have much more sense to me.
- NewAccnt 14y agoBut you're both completely missing the point that mining for coins will become exponentially more efficient over time, with new mining techniques and hardware.
- wmf 14y agoWhen more energy-efficient mining equipment is created, people buy enough of the equipment to use the same amount of power that they used to have. For example, one might replace a 300 W GPU with a 300 W ASIC miner. The total amount of mining is determined by the exchange rate; since the exchange rate is expected to increase due to deflation, the amount of power spent on mining is also expected to increase dramatically.
- pavanky 14y agoI understand that. I said it would make more sense than the existing one. It would not be a perfect solution, and I would not have participated in that xCoin system either.
- loqi 14y agoIt's hard to design a proof-of-work scheme that is both secure and performs "useful" work.
- pavanky 14y agoThen it is not a useful monetary system. When people trade money (paper or electronic), they are trading time they invested in doing useful work for someone else. When bitcoins are traded, you are trading wasted computer cycles.
- bbbhn 14y agoThe computer cycles are useful: they secure the network.