
Bitcoin Block #210 000 mined - reward halving - nelse
http://blockchain.info/block-index/322335/000000000000048b95347e83192f69cf0366076336c639f9b7228e9ba171342e
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motters
Bitcoin is looking increasingly less practical. The size of the block chain is
becoming massive. Recently I tried downloading the official client, and after
2.8GB of downloading with the progress bar only about half way through I gave
up. If Bitcoin becomes more popular in future the block chain really isn't
going to scale well, and that's going to result in a more centralized system
in which there are fewer block chain "banks".

~~~
downandout
I think that the sustainability issue can be managed with bloom filters etc,
but you are correct. Under the current model where the entire block chain must
be in the possession of every client, Bitcoin is not remotely close to
sustainable. Imagine if, in order to process credit cards, you had to download
transaction data for every credit card transaction in the history of credit
cards.

What surprises me is that the original creators, who were obviously very
intelligent, didn't anticipate this becoming a problem and create the system
from the ground up to address it.

~~~
smithzvk
So, what I don't get is why can't I, as a user, just pick how far back I want
to go? Why can't some trusted party, like bitcoin.org post a their best guess
for the block chain state 10 days ago. Isn't that sufficient to determine with
a high level of certainty that I am on the correct branch and that there has
been no funny business in the history?

~~~
downandout
Yes, it is, but the whole point of Bitcoin is to not rely on any central
entity. Unfortunately, that doesn't appear to be entirely possible if we are
to make Bitcoin mainstream.

~~~
smithzvk
I guess I long ago decided that Bitcoin was interesting enough with just the
possibility of not having to rely on a central authority/entity.

More to the point, however, is that this isn't really an issue of an
authority, but rather an issue of trust. If I for whatever reason decided not
to trust Bitcoin.org, someone else could take their place. For instance, I
could get my recent state of the block-chain from a pal that I trust to do the
actual task of verifying the full chain. I could even pay that person some fee
periodically for providing that service. You could probably come up with a
distributed, fraud resistant, method of providing recent block chain states
where many sources would have to be simultaneously compromised for any attack.

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kylec
The fireworks and sound were extremely annoying. I'm not used to web pages
making noise on my iPhone and was unprepared for it.

~~~
duiker101
Nobody is, that's why it's usually pissing everyone. A "Party" button might
have done a better job.

~~~
ShawnBird
Some kind of fuse or something to show what was about to happen with a 'stop'
button might have been better. I don't think anyone would click a 'party'
button.

~~~
misnome
Because nobody opens tabs in the background.

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ewillbefull
13 bitcoins in transaction fees... lots of people wanted to be in this block.

~~~
adanto6840
Can you expand on this for a non bitcoin-savvy person?

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tvdw
Transaction fees are a 'gift' from the person doing the transaction to the
person that's processing the transaction. Processing transactions is done in
blocks, and the process is called 'mining' because for every processed block,
the person who processes the block gets 25 BTC (before today that was 50 BTC)
plus the transaction fees. Obviously 25 BTC is a lot, which is why it's so
hard to mine blocks. Mining is often done in groups, and the person who mines
a block has to share the profits with the rest of that group.

IIRC the entire Bitcoin community mines 6 blocks per hour, and it's the mining
process that keeps Bitcoin going, because without miners there couldn't be any
transactions.

~~~
pdog
What happens when nearly all of the 21 million Bitcoins are mined[1]? Will
transactions not happen anymore?

[1] -
[https://en.bitcoin.it/wiki/Controlled_Currency_Supply#Projec...](https://en.bitcoin.it/wiki/Controlled_Currency_Supply#Projected_Bitcoins_Long_Term)

~~~
duskwuff
The reward for mining a block just halved; it'll continue to halve as the
supply increases, so that 21 million is not the endpoint so much as it is an
asymptote.

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yebyen
That's not true.

It will continue to halve, exactly one more time to 12.5, and then the next
time after that, it will stop. Once the 12.5 reward is gone, the network will
be supported entirely by transaction fees, and no new bitcoins will be
created.

So, yes, asymptote, but the rest of your comment seems misleading. It will
halve once more, that's not exactly "continue to halve."

~~~
ewillbefull
What are you talking about? Check out the wiki page:
[https://en.bitcoin.it/wiki/Controlled_Currency_Supply#Projec...](https://en.bitcoin.it/wiki/Controlled_Currency_Supply#Projected_Bitcoins_Long_Term)

It's supposed to halve 33 times.

~~~
yebyen
I am the one who is misinformed!

I was also wondering how to reconcile this (seemingly very) early first
halving with my concept of a 21 year bitcoin generation span. Thanks for
clearing that up!

*edit: Turns out I was misinformed about the 21 year thing too. These projections have the halving terminating estimated at 2140. Don't suppose either of us will be around to see it.

~~~
jamoes
And, actually, it may continue well beyond 2140. The only reason it would stop
there is because the smallest value bitcoin can currently represent is
0.00000001 BTC (1e-8). Many people believe that the rising value of bitcoin
will bring about a need to increase the number of decimal places that bitcoin
supports. If this change is made to the protocol before 2140, the the mining
reward will probably keep on halving to values even less than 1e-8 BTC.

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mikeash
Is it time to haunt eBay for cheap video cards unloaded by miners who no
longer find mining worthwhile?

~~~
cwkoss
I'd say give it another month or two. Many are still able to mine profitably
if they have 4x cards per rig (dividing the "fixed (power) costs" of
motherboard, psu, etc). Once ASIC mining hardware comes online, GPUs will be
completely worthless for Bitcoin mining.

But if you see a deal, by all means grab it.

* Disclosure, I am the community manager for a GPU-centric Bitcoin mining pool

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pixelcort
Looks like the exchange rate didn't fluctuate too much during this time:

[http://bitcoincharts.com/charts/mtgoxUSD#rg5ztgSzbgBzm1g10zm...](http://bitcoincharts.com/charts/mtgoxUSD#rg5ztgSzbgBzm1g10zm2g25zv)

I wonder what will happen to the difficulty over the next couple days:

<http://bitcoin.sipa.be/>

Considering the exchange rate remained stable, I expect the difficulty to
halve.

~~~
finnw
> _I expect the difficulty to halve._

Why would it? Those who have invested in dedicated mining hardware aren't
going to switch it off just because the reward has halved. At least not until
mining fails to pay for the electricity that goes into it (but I don't expect
that will ever happen.)

~~~
pserwylo
This is what I don't understand about bitcoin. With my extremely small amount
of knowledge about it, I thought the idea was to make it so that the rewards
for mining were aligned closely with the price of electricity.

But is this the price of electricity in the USA? What about hiring people to
do mining in countries with cheaper electricity?

What about if some miners had a solar panel on the roof? Although, as I write
this, it occurs to me that at some point, it would be more economical to sell
the solar generated electricity back to the grid, rather than use it for
mining hardware...

~~~
scotty79
I think US has incredibly cheap electricity.

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Kilimanjaro
After the bitcoin debacle, it went from $30+ to $3- and I knew if it were to
rebound to that same price again, that would be the perfect time to buy.

Three dollars, now I regret it.

~~~
hxc
I bailed out and sold my 100 btc at 5$ and then patted myself on the back when
it hit 3$. I didn't buy back in like I should have and now I am kicking myself
in the ass.

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sp332
Some details for the curious
[http://www.reddit.com/r/Bitcoin/comments/13xd05/idea_for_the...](http://www.reddit.com/r/Bitcoin/comments/13xd05/idea_for_the_210000th_block_lets_all_make/c78337n)

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debacle
What might this do to the acceptance of bitcoin? In an article yesterday,
someone mentioned in the comments that it was no longer financially viable to
make money from mining, I would assume that this would make it doubly so. If
that is the case, will there be required transaction fees for processing
transactions, and how will that effect the price of BTC?

~~~
mrb
This person is misinformed. Mining is still quite profitable to many of us.
Eg. each one of my Cairnsmore1 FPGA boards makes about $43/month, after the
halving. Before the halving, they made $86/month. I paid $640 for each one.
Electrical cost for one of them (40W) is $2.90/month at the worldwide average
rate of $0.10/kWh.

~~~
graue
This sounds like good business. Any links on getting started? I'm especially
curious about the legal aspects like how you report mined-Bitcoin income when
you do taxes.

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alaaibrahim
I don't think that the government could tax it, as it's not money :) I'm not a
lawyer or anything even close, but if your income is not money, but something
else (e.g. potatoes), would that be taxed?

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toby
Yes, absolutely. Many countries tax barter exchange. The IRS has a whole
section on their site about it: [http://www.irs.gov/Businesses/Small-
Businesses-&-Self-Em...](http://www.irs.gov/Businesses/Small-
Businesses-&-Self-Employed/Bartering-Tax-Center)

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Evbn
Translation to English from Bitcoinese?

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TazeTSchnitzel
Bitcoin works by having "blocks" of data, containing transaction history
(every Bitcoin transfer someone has made - it is only actually made when
incorporated into a block), "mined" by a network. These blocks are mined by
incrementing a value in the block of data computing a hash of it, until it
falls within a certain range. The fact the hash must be in this range results
in Bitcoin miners having to do millions of hash computations until they find
the correct one, creating a significant level of difficulty in producing a
block. This difficulty means that it is difficult to spend Bitcoins twice,
since you would theoretically need to control 50% of the computing power
working away at it. Each miner is competing with every other to mine the next
block first. Whoever does so can add a "reward" of Bitcoins to the block of
transactions, and this is how new Bitcoins are made. Over time, the Bitcoin
network increases the difficulty by making the range of valid hashes narrower,
so that even as more miners join the network, it will still take roughly 10
minutes until the next block is mined. What's happened in this case is that
now the reward, previously 50 BTC, has been halved to 25 BTC. I should note
that miners can also deduct transaction fees... anyone who makes a transaction
can add a small fee. This adds an additional incentive for miners to mine a
block beyond the other reward. It also means, of course, that they prioritise
whoever pays the highest fee.

~~~
StavrosK
I've long wondered about this, how long does it take to process a transaction
if you add no fee? The fee is pretty significant (especially for
microtransactions), and I'm not in a hurry, so I can wait a few minutes/hour.

TL;DR: What's the wait like if you're stingy?

~~~
kirian
Most transactions don't need a fee and even those that do will be relayed
eventually even with no fee (currently).

See this Stack Exchange answer for some more details:
<http://bitcoin.stackexchange.com/q/4483/61>

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Syssiphus
NoooOOoooOOOooo!

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IanDrake
Can anyone explain this to me?

Sorry, I never really paid attention to bitcoin. I was sure the government
would have killed it by now, labeling you all criminals.

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nelse
<https://en.bitcoin.it/wiki/Mining#Reward>

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IanDrake
Thanks. I guess no one else gets the sarcasm in my initial comment.

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btilly
No, we get the sarcasm, we just want it left on Reddit.

Every community has its own quirks. You just encountered one of the more
important ones for HN.

