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As I understand it, there are only a finite number of Bitcoins. Hence there will be an end to mining.

by choult 13y ago

geetee 13y ago
People will continue to mine to earn fees from processing transactions.
- eterm 13y ago
  I find it ironic that proponents of bitcoins tend to argue that: 1. Bitcoins will take off because it has tiny fees for wealth transfer. 2. Future mining to keep the blockchains up will be supported by transaction fees. If all this mining power has to be kept up as the 25 bitcoin bonus runs out then the transaction fees could well end up just as high as the current 2.9% + 0.3 seen everywhere.
  - obi-nine 13y ago
    Unlikely unless large banking cartels take over this service (which is possible). In any case there is approximately a century to figure this out.
  - jafaku 13y ago
    The free market will decide on that, and it will be fair. Even if we end up with ~3% fees, it would be totally worth it knowing that your account can't be randomly frozen, or your funds stolen by whoever is in charge of the fake wars (eg: war on drugs).
    - betterunix 13y ago
      "it would be totally worth it knowing that your account can't be randomly frozen, or your funds stolen by whoever is in charge of the fake wars (eg: war on drugs)." Assuming that your Bitcoin money can be used at all. The government does not need to freeze your Bitcoin wallet, they only need to stop you from selling your Bitcoins for whatever fiat currency is used in your country. Until the government starts accepting Bitcoin payments for things like taxes, court settlements and fees, etc., businesses will need fiat currency, and they will demand fiat currency from their customers. Anyone operating a money-changing business will be targeted by the government; fail to do all that the law requires, and you go to prison.
      - Karunamon 13y ago
        There's always a way around it. Considering that BTC is basically borderless, I can get it transferred into any other currency in any other country I choose.
        betterunix 13y ago
        That is kind of like saying, "I can murder someone, then fly to another country and get away with it!"
        Karunamon 13y ago
        Really? Comparing a currency exchange to murder? Do I really need to explain why that's an utterly moronic thing to say?
        betterunix 13y ago
        You are trying to claim that you can evade laws governing currency exchange by skipping around international borders. That is not how laws, borders, or currency exchange work. If you were to try exchanging Bitcoin for some currency in a country with loose regulations, you would still need to eventually get your country's own currency and would need to deal with your country's regulations on importing or exchanging currencies. The point is not about murder or any other crime. The point is about trying to evade laws by crossing borders. At best, your strategy would shift the problem from regulations on currency exchange within your country to regulations on importing currency to your country; you still do not get a situation where your government has no power to freeze or seize your money.
        jafaku 13y ago
        You don't need to cross borders either. Guess what, I happen to live in a country where everything is banned (USD, Euro, gold, silver, etc.). That didn't stop me from saving in USD, Euro, or Bitcoin. I couldn't buy gold because nobody has that, because it's so inconvenient since you can't normally divide it, transport it, or keep it safe. But Bitcoin doesn't have any of those problems, so here we are saving in Bitcoin and not being punished through inflation, seizures, etc.
  - jacoblyles 13y ago
    There are two ways to fund mining operations: 1) Tax the holders of coins 2) Tax the users of coins Bitcoin starts with 1 (mining rewards) and then moves onto 2 (transaction fees) for long-term stability. I think this is dumb if your goal is widespread adoption because it taxes the activity that causes network effects to grow (transactions). PPC sticks with 1 for the lifetime of the system (through a slow-growing monetary base), strengthening my belief that PPC is a strictly better design than bitcoin.
DougWebb 13y ago
Your understanding is incorrect. The mining activity produces two rewards for miners: a 25 bitcoin bonus for being the first one to find a hash for a block, and a small percentage of each transaction included in the block. The bonus will be ramped down over time and eventually go to zero, but the percentage will always be there.
- baby 13y ago
  > Your understanding is incorrect. I would have said not complete > but the percentage will always be there. the percentage doesn't seem to bring enough money compared to the cost of electricity for those machines. Correct me if I'm "incorrect".
  - letney 13y ago
    > the percentage doesn't seem to bring enough money compared to the cost of electricity for those machines. That is entirely dependent upon the value of one bitcoin. The transaction fees for a block go to the miner. If bitcoin is actively used in 2140 when the issue of new coins ceases, the value of even small fractions of a coin will likely be very high.
    - baby 13y ago
      IIRC the percentage was diminished when the value of bitcoins increased 6months/1year ago.
  - dragonwriter 13y ago
    IIRC, Bitcoin transaction fees aren't a fixed percentage or amount, they are something included as part of the transaction that is essentially a bounty for the miner to verify the transaction, and miners can preferentially decide which transactions to verify first based on the offered fees. Presumably, as creating new coins stops being a source of reward for mining, the cost you need to offer with a transaction to get it verified will (assuming bitcoin remains in active use) go up.
  - DougWebb 13y ago
ihsw 13y ago
Indeed, all the BTC surrounding Silk Road (belonging to users and Dread Pirate Roberts) are presumed to be lost forever. 5% of all BTC in circulation are lost in one fell swoop.

As I understand it, there are only a finite number of Bitcoins. Hence there will be an end to mining.

by choult 13y ago

As I understand it, there are only a finite number of Bitcoins. Hence there will be an end to mining.

geetee 13y ago

People will continue to mine to earn fees from processing transactions.

eterm 13y ago
I find it ironic that proponents of bitcoins tend to argue that: 1. Bitcoins will take off because it has tiny fees for wealth transfer. 2. Future mining to keep the blockchains up will be supported by transaction fees. If all this mining power has to be kept up as the 25 bitcoin bonus runs out then the transaction fees could well end up just as high as the current 2.9% + 0.3 seen everywhere.
- obi-nine 13y ago
  Unlikely unless large banking cartels take over this service (which is possible). In any case there is approximately a century to figure this out.
- jafaku 13y ago
  The free market will decide on that, and it will be fair. Even if we end up with ~3% fees, it would be totally worth it knowing that your account can't be randomly frozen, or your funds stolen by whoever is in charge of the fake wars (eg: war on drugs).
  - betterunix 13y ago
    "it would be totally worth it knowing that your account can't be randomly frozen, or your funds stolen by whoever is in charge of the fake wars (eg: war on drugs)." Assuming that your Bitcoin money can be used at all. The government does not need to freeze your Bitcoin wallet, they only need to stop you from selling your Bitcoins for whatever fiat currency is used in your country. Until the government starts accepting Bitcoin payments for things like taxes, court settlements and fees, etc., businesses will need fiat currency, and they will demand fiat currency from their customers. Anyone operating a money-changing business will be targeted by the government; fail to do all that the law requires, and you go to prison.
    - Karunamon 13y ago
      There's always a way around it. Considering that BTC is basically borderless, I can get it transferred into any other currency in any other country I choose.
      - betterunix 13y ago
        That is kind of like saying, "I can murder someone, then fly to another country and get away with it!"
        Karunamon 13y ago
        Really? Comparing a currency exchange to murder? Do I really need to explain why that's an utterly moronic thing to say?
        betterunix 13y ago
        You are trying to claim that you can evade laws governing currency exchange by skipping around international borders. That is not how laws, borders, or currency exchange work. If you were to try exchanging Bitcoin for some currency in a country with loose regulations, you would still need to eventually get your country's own currency and would need to deal with your country's regulations on importing or exchanging currencies. The point is not about murder or any other crime. The point is about trying to evade laws by crossing borders. At best, your strategy would shift the problem from regulations on currency exchange within your country to regulations on importing currency to your country; you still do not get a situation where your government has no power to freeze or seize your money.
        jafaku 13y ago
        You don't need to cross borders either. Guess what, I happen to live in a country where everything is banned (USD, Euro, gold, silver, etc.). That didn't stop me from saving in USD, Euro, or Bitcoin. I couldn't buy gold because nobody has that, because it's so inconvenient since you can't normally divide it, transport it, or keep it safe. But Bitcoin doesn't have any of those problems, so here we are saving in Bitcoin and not being punished through inflation, seizures, etc.
- jacoblyles 13y ago
  There are two ways to fund mining operations: 1) Tax the holders of coins 2) Tax the users of coins Bitcoin starts with 1 (mining rewards) and then moves onto 2 (transaction fees) for long-term stability. I think this is dumb if your goal is widespread adoption because it taxes the activity that causes network effects to grow (transactions). PPC sticks with 1 for the lifetime of the system (through a slow-growing monetary base), strengthening my belief that PPC is a strictly better design than bitcoin.

DougWebb 13y ago

Your understanding is incorrect. The mining activity produces two rewards for miners: a 25 bitcoin bonus for being the first one to find a hash for a block, and a small percentage of each transaction included in the block. The bonus will be ramped down over time and eventually go to zero, but the percentage will always be there.

baby 13y ago
> Your understanding is incorrect. I would have said not complete > but the percentage will always be there. the percentage doesn't seem to bring enough money compared to the cost of electricity for those machines. Correct me if I'm "incorrect".
- letney 13y ago
  > the percentage doesn't seem to bring enough money compared to the cost of electricity for those machines. That is entirely dependent upon the value of one bitcoin. The transaction fees for a block go to the miner. If bitcoin is actively used in 2140 when the issue of new coins ceases, the value of even small fractions of a coin will likely be very high.
  - baby 13y ago
    IIRC the percentage was diminished when the value of bitcoins increased 6months/1year ago.
- dragonwriter 13y ago
  IIRC, Bitcoin transaction fees aren't a fixed percentage or amount, they are something included as part of the transaction that is essentially a bounty for the miner to verify the transaction, and miners can preferentially decide which transactions to verify first based on the offered fees. Presumably, as creating new coins stops being a source of reward for mining, the cost you need to offer with a transaction to get it verified will (assuming bitcoin remains in active use) go up.
- DougWebb 13y ago

ihsw 13y ago

Indeed, all the BTC surrounding Silk Road (belonging to users and Dread Pirate Roberts) are presumed to be lost forever. 5% of all BTC in circulation are lost in one fell swoop.