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The flood of newly minted BTC will likely cause exchange rates to crater. Hopefully the increase in available BTC will stabilize prices as individuals/small gro

by ihsw 13y ago

The flood of newly minted BTC will likely cause exchange rates to crater. Hopefully the increase in available BTC will stabilize prices as individuals/small groups will have to expend more capital to influence prices in their favor. The next six months are probably going to be a little crazy, hopefully it'll drive BTC out of the hands of speculators and into the hands of actual users of the currency.

cgi_man 13y ago
The creation rate of BTC is fixed every 10 minutes. More ASIC power does not equal more BTC.
- jeffasinger 13y ago
  Not quite. The difficulty is set to average that a new block is found approximately every 10minutes. However, if lots of capacity is added all at once, the difficulty might not change for several days, and blocks will be generated at a faster rate during that time, as it is only updated every 2016 blocks. https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty
  - cgi_man 13y ago
    Somewhat splitting hairs... it's adjusted to 10 minute blocks, and there's also a huge variability in how frequently they are discovered. Even if the average was 10 min, there are blocks found within the same minute, or with 30+ minute gaps.
    - sp332 13y ago
      Variability wouldn't matter if the average over time was alright. But it's not just spitting hairs: BTC generation is significantly ahead of schedule. https://news.ycombinator.com/item?id=5780861 https://news.ycombinator.com/item?id=5780861
- ihsw 13y ago
  Creation is indeed fixed and constant, but the supply of BTC within the exchanges isn't. The new owners of these ASIC boxes will find themselves in an excess of supply and they'll quite happily flood the market with this increased supply, or they'll spend the coins at merchants. Contrastingly other miners with inferior machines will find themselves behind the curve with a smaller source of income.
Afforess 13y ago
I doubt it. After the a few hundred (thousand?) blocks are mined, the mining difficulty algorithm will kick in, making mining just as difficult as it was before, relative to the new hash rate. It will mean gpu miners won't make anything at all, but the overall volume of new coins won't increase. Further reading: https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty
nullc 13y ago
There isn't really a "flood" of newly minted BTC. The system performs closed loop control keeping the supply relatively constant.
- ihsw 13y ago
  Supply as a whole is constant, but supply between exchanges and people isn't constant.
  - nullc 13y ago
    Absolutely, but what makes you think that the people with increased hash power will have less tight handed behavior than the others? Why not the opposite?

by ihsw 13y ago

cgi_man 13y ago

The creation rate of BTC is fixed every 10 minutes. More ASIC power does not equal more BTC.

jeffasinger 13y ago
Not quite. The difficulty is set to average that a new block is found approximately every 10minutes. However, if lots of capacity is added all at once, the difficulty might not change for several days, and blocks will be generated at a faster rate during that time, as it is only updated every 2016 blocks. https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty
- cgi_man 13y ago
  Somewhat splitting hairs... it's adjusted to 10 minute blocks, and there's also a huge variability in how frequently they are discovered. Even if the average was 10 min, there are blocks found within the same minute, or with 30+ minute gaps.
  - sp332 13y ago
    Variability wouldn't matter if the average over time was alright. But it's not just spitting hairs: BTC generation is significantly ahead of schedule. https://news.ycombinator.com/item?id=5780861 https://news.ycombinator.com/item?id=5780861
ihsw 13y ago
Creation is indeed fixed and constant, but the supply of BTC within the exchanges isn't. The new owners of these ASIC boxes will find themselves in an excess of supply and they'll quite happily flood the market with this increased supply, or they'll spend the coins at merchants. Contrastingly other miners with inferior machines will find themselves behind the curve with a smaller source of income.

Afforess 13y ago

I doubt it. After the a few hundred (thousand?) blocks are mined, the mining difficulty algorithm will kick in, making mining just as difficult as it was before, relative to the new hash rate. It will mean gpu miners won't make anything at all, but the overall volume of new coins won't increase. Further reading: https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty

nullc 13y ago

There isn't really a "flood" of newly minted BTC. The system performs closed loop control keeping the supply relatively constant.

ihsw 13y ago
Supply as a whole is constant, but supply between exchanges and people isn't constant.
- nullc 13y ago
  Absolutely, but what makes you think that the people with increased hash power will have less tight handed behavior than the others? Why not the opposite?