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Let's say I'm buying an Overstock rug with bitcoins. I do an instant buy with Circle and and send the bitcoins over. Am I paying $10-$20? Is Overstock? Block r

by natrius 12y ago

Let's say I'm buying an Overstock rug with bitcoins. I do an instant buy with Circle and and send the bitcoins over. Am I paying $10-$20? Is Overstock? Block rewards have no effect on whether people will use Bitcoin, especially since there are other digital currencies that don't have that issue. Inasmuch as it's a problem, it's fixable.

danbruc 12y ago
Who do you think pays for the electricity bills needed to keep a 250 PH/s network online?
- natrius 12y ago
  Bitcoin speculators. The folks who hook up their bank accounts to the Bitcoin network don't hold bitcoins or pay the block rewards.
  - danbruc 12y ago
    250 PH/s, 1 W/GH/s, 0.1 $/kWh and you get 219 million dollars per year to run the Bitcoin network. At 75.000 transactions per day this yields 8 dollars per transaction. And these are real costs somebody has to pay for. Maybe most of that is currently covered by the influx of new money but this is not going to last forever. And once the block reward is gone this has to be covered by the fees. Neither lowering the hash rate nor reducing the the mining costs is an option because it undermines the security of the system. The only option is to process more transactions per block and this is not without problems on its own.
    - natrius 12y ago
      So your position is that no one is ever going to figure out how to make cryptocurrencies sustainable? Bitshares is already doing it today, and any strategy that proves itself can easily be added to Bitcoin. It's a bad bet, but good luck with that.
    - ThomPete 12y ago
      Of course you have also done the calculation for the current system right? Hundreds of thousands of people involved in making the current system work. Legislation and so on.
      - danbruc 12y ago
        Does it matter? My point was that Bitcoin transactions are not cheap, that only looking at the transaction fee is misleading. The electricity costs per transaction are currently 200 times larger than the transaction fees, not accounting for hardware costs or any profit for miners. So the whole thing has to change a lot if you want a sustainable system with transaction costs close to transaction fees.
        ThomPete 12y ago
        Yes it matters as thats also part of the cost.

by natrius 12y ago

danbruc 12y ago

Who do you think pays for the electricity bills needed to keep a 250 PH/s network online?

natrius 12y ago
Bitcoin speculators. The folks who hook up their bank accounts to the Bitcoin network don't hold bitcoins or pay the block rewards.
- danbruc 12y ago
  250 PH/s, 1 W/GH/s, 0.1 $/kWh and you get 219 million dollars per year to run the Bitcoin network. At 75.000 transactions per day this yields 8 dollars per transaction. And these are real costs somebody has to pay for. Maybe most of that is currently covered by the influx of new money but this is not going to last forever. And once the block reward is gone this has to be covered by the fees. Neither lowering the hash rate nor reducing the the mining costs is an option because it undermines the security of the system. The only option is to process more transactions per block and this is not without problems on its own.
  - natrius 12y ago
    So your position is that no one is ever going to figure out how to make cryptocurrencies sustainable? Bitshares is already doing it today, and any strategy that proves itself can easily be added to Bitcoin. It's a bad bet, but good luck with that.
  - ThomPete 12y ago
    Of course you have also done the calculation for the current system right? Hundreds of thousands of people involved in making the current system work. Legislation and so on.
    - danbruc 12y ago
      Does it matter? My point was that Bitcoin transactions are not cheap, that only looking at the transaction fee is misleading. The electricity costs per transaction are currently 200 times larger than the transaction fees, not accounting for hardware costs or any profit for miners. So the whole thing has to change a lot if you want a sustainable system with transaction costs close to transaction fees.
      - ThomPete 12y ago
        Yes it matters as thats also part of the cost.