
At This Rate, The Last New Bitcoin Will Be Issued 15-55 Years Ahead Of Schedule - mdelias
http://www.thegenesisblock.com/at-this-rate-the-last-new-btc-will-be-issued-55-years-ahead-of-schedule/
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arcticfox
In 2013, a huge part of this is due to the flood of ASICs coming online. We've
seen CPU -> GPU -> FPGAs -> ASICs in just a few years, but these improvements
cannot keep coming at this rate. With ASICs, bitcoin mining has just about
caught up with the rest of technology and the computation / $ that miners can
bring to bear will stop jumping at such a huge rate.

I disagree with the statement in the article that "there’s strong reason to
believe this trend [surges in network computing power] will continue."

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CrunchyJams
It probably won't go on forever, but at this point there's three years of the
trend and only a small fraction of the globe has even heard of bitcoin. Would
be surprised if network hashrate didn't grow like it has been for the
foreseeable future.

~~~
jerf
But they're building on established technology. This is like looking at a
third world country just as they begin modernizing... holy cow, they've
recapitulated the development of the developed world in just 20 years! They're
on fire! They're going to take over the entire world! Except that they're not,
because they've been buying their advances from the developed world. (This is
not a criticism; tech transfer like this is an awesome, wonderful thing. It's
just that one of its tiny side effects is that people can be fooled by the
curves.)

Similarly, BitCoin isn't going to be able to continue advancing at this rate
when the problem of accelerating BitCoin computation reaches the point where
it is reducible to the problem of accelerating transistors in general.

~~~
vidarh
But there's no _need_ for it to continue forever here, since there's a finite
target. The question is if current growth can be maintained until there are no
more Bitcoins to be mined, not if the curve is sustainable.

~~~
jerf
I'm at a loss as to what you think you're disagreeing with me about. I don't
see how observing that something won't go on forever is somehow a claim that
it should.

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gojomo
If there's an outrush of processing power, adjustment in the easing direction
won't be as fast. (At least one smaller, post-Bitcoin cryptocurrency has faced
a crisis when a large amount of hashpower withdrew... because the remaining
hashing would take 'forever' to even advance to the next 'adjustment point'.)

So this question is a bit early to call.

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vannevar
It's remarkable testament to the power of greed that so much computing power
is being poured into the digital equivalent of manufacturing Beanie Babies.
Are there any reliable estimates on the volume of Bitcoins that are actually
used as currency, compared to the volume of purely speculative trading?

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dasil003
I realize it's sort of a funny thing to say, but I would argue that a bitcoin
has more intrinsic value than a beanie baby. It's ease of transfer is a huge
utility.

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vannevar
_I would argue that a bitcoin has more intrinsic value than a beanie baby._

I would argue that it has less; kids have always loved stuffed animals,
whereas no one found intrinsic value in a cryptographic hash until someone
thought to brand and promote one.

A Bitcoin's value comes from the Bitcoin system, which does have some utility
as a sort of distributed ledger. The problem is there are already plenty of
e-cash systems already in place, virtually all of which are easier to use than
Bitcoin.

As a currency, Bitcoin's volatility is a major disadvantage. No one will spend
a Bitcoin if they think it will be worth more tomorrow. No one will take a
Bitcoin if they think it will be worth less. Success as a speculative
investment is generally antithetical to success as a currency.

~~~
quotha
So, exactly which fiat currency do you use that does not fluctuate in value?

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vannevar
Fluctuating is one thing, gyrating wildly is another.

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admax88q
How will transactions get confirmed in the block chain if there's no longer
any blocks worth mining? Won't most people stop mining blocks to save money?

Or is the hope that enough people will continue mining out of goodwill to keep
the economy flowing?

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abdullahkhalids
For large transactions, you typically 'donate' a small bit to the miners,
which is earned by the person who mines the next block. It is expected that as
the number of transactions keep going up, the reward from transaction costs
will eventually outstrip the block reward.

P.S 1 might have messed up terminology P.S 2 too small transactions (typically
by Sastoshi Dice) even today are not being accepted by miners unless
accompanied by a donation.

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ianstallings
I think the progress will become more predictable now that they've basically
reached the maximum amount of compute possible from a single chip. The speed
breakthroughs going forward will be optimized ASIC designs and smaller gates.
But going from CPU -> GPU -> FPGA -> ASIC we saw _huge_ gains in performance.
That's no longer the case and hence we should see more linear scaling of
mining operations.

But I do tend to agree with the assessment that if BTC remains popular and
continues to gain credibility then we will see more and more mining operations
come on line as the mainstream starts to invest. I mean, can you imagine if a
large bank decided one day to hedge its bets and do it's own dark pool of
miners? They could throw so much money at it that it could really disrupt
current trends.

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jl6
Kinda interesting, but really not a big deal. The distribution mechanism is
working as intended, just faster.

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mcdigman
A better guess would be that the last new bitcoin will never be mined, because
exponential growth in hardware dedicated to it will not last, given that the
cost/benefit ratio (in terms of power, hardware, and effort) gets worse the
fewer bitcoins you can mine per minute. And when people stop being able to
mine them, their value will drop because people aren't making them anymore,
which leads to it being even less worthwhile to mine them, until they are
being mined too slowly even to hit the adjustment point - in other words, when
the bubble pops, the currency will collapse completely.

So from that point of view, the last new bitcoin is likely to be mined earlier
than expected - but it won't be the 21 millionth.

~~~
mcherm
If there were no transaction fees built into the bitcoin protocol, then that
might be true. But the system is designed to slowly and smoothly transition
away from funding the mining activities by issuing bitcoins to funding the
mining activities by paying transaction fees.

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rockmeamedee
How do you write something like

"The mining rate has been faster than expected over the last four years. This
trend will probably continue as ASICS enter the market."

and then proceed to draw a chart covering the next 130 years!?! This trend
might last five.

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peteretep
I would like to see "cost to mine[1]" vs values in dollars over time. Go lazy
web, go!

[1] In a unit expressible in dollars. Like the cost to run a Linode machine to
do it for the time needed to mine it, or something.

~~~
wmf
<http://www.bitcoinx.com/charts/>

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mtowle
"That's a lot!" Nah, if anything, it's surprising Nakamoto would even be that
close. Hopes are one thing, but nobody predicts successes of this magnitude.

~~~
Cushman
Is it really success when a monetary policy decision turns out to have been
wildly inaccurate?

~~~
furyofantares
The prediction was 131 years -- I'm not sure 15 years early would be
considered wildly inaccurate. I'm also not sure why we should believe that the
assumptions the article makes will hold true over the next 72-112 years.

~~~
Cushman
Maybe what I mean is wildly imprecise. The figure of 131 suggests a precision
in years, but based on these projections it should clearly be in decades.
Since there will likely be dramatic effects to running low on coins to mine,
it's a pretty important thing to predict, and if that's not possible it's not
a great sign.

I guess I don't know what sort of precision the market requires to deal with
it, though.

~~~
furyofantares
The prediction was given as ~2140 rather than ~131 years, which perhaps
implies less precision, and anyway was presented as an estimate.

~~~
Cushman
Fair enough. I don't mean to belabor the point.

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codeulike
OK, now I understand mining a bit better. Its a race, with the difficulty
tuned to try and make each race last 10 minutes.

~~~
ChrisClark
Not just to make each race last 10 minutes, but to also make sure it scales
with the processing power available. This keeps the transaction history secure
because you would need to control immensely more computing power to try and
counterfeit the transactions for every 10 minutes back in the past you try to
change.

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venomsnake
So we have temporarily inflation in a deflationary currency. That is
interesting phenomenon.

~~~
natrius
You're mixing two definitions of inflation. Bitcoin undergoes monetary
inflation as the supply increases until the late 21st century. Since the
supply increases more slowly than the demand for the currency increases, the
bitcoin economy sees price deflation. This isn't a particularly interesting
phenomenon because it's common for the value of a currency to increase (price
deflation) even as the supply of the currency increases (monetary inflation).
This is what happens with gold when it is used as a currency, for instance.

When the terms "inflation" and "deflation" are used without qualifiers, they
usually refer to prices, not money supply.

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reaclmbs
Can one of our resident cryptography geniuses (e.g. cperciva, tptacek) weigh
in on how Peer2PeerCoin (PPCoin) does/doesn't address Bitcoin 51%
vulnerability?

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betterunix
It would help if you could point us at a formal description of the protocol.

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reaclmbs
<http://www.ppcoin.org/static/ppcoin-paper.pdf>

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betterunix
That is pretty lacking in detail. Is there something a bit more complete --
something that might actually be useful for even a cursory analysis?

[Edit: for example, it is not clear _how_ the timestamp is computed/validated
by the network. Do all nodes have to have synchronized clocks?)

