The problem with bitcoin is the idea that it even requires a mining pool or transaction fee.
Bitcoin will die the moment someone figures out how to build a decentralized crypto-currency that doesn't need a stupid idea like "mining" to be functional and secure.
> Bitcoin will die the moment someone figures out how to build a decentralized crypto-currency that doesn't need a stupid idea like "mining" to be functional and secure.
Yup. But I wouldn't hold my breath. No one has ever created a decentralized consensus algorithm with the properties bitcoin has, before or since. And since bitcoin achieves its unique properties as a result of the economic costs of mining, asking for a mining-less bitcoin is kinda like wishing for a perpetual motion machine.
Well there are several altcoins using proof-of-stake. Whether they'll be as secure in the long term is an open question, but I wouldn't go so far as to call it a perpetual motion machine.
You can't get rid of mining - that's the cost of trust-less decentralization.
You might be able to make mining more efficient, or based around some other finite resource besides computation power (like storage), but even that's a long-shot.
You could make mining more memory bound rather than compute bound, somewhat reducing electricity costs and requiring bigger upfront investments (in DRAM chips). This also vastly reduces the performance gap between commodity and custom mining hardware.
Why would that reduce costs? Miners would have to compete for memory & CPU then.
Even altcoins that have tried this approach have seen custom hardware appearing if the coin grows popular enough.
The approach just seems to be a desperate hope that home users will be able to mine profitably, but ultimately it still fails because those with more resources will win out.
No altcoin has used a PoW where memory latency dominates computation.
Home users will never be able to mine profitably (except by claiming their electricity is "free"), but the hope is they can do so within an order of magnitude loss of efficiency.
>Bitcoin will die the moment someone figures out how to build a decentralized crypto-currency that doesn't need a stupid idea like "mining" to be functional and secure.
Federated cryptocurrency isn't new. If you're willing to tie it in to to the traditional banking system then you can build a way more scalable and liberating digital currency than Bitcoin. The incentives just aren't there for banks to do so. It'd be great for us though.
From an NSA presentation on Stefan Brands work in the 90s. He devised an almost perfect cryptographic digital cash system that has all the anonymity and flexibility of cash with the caveat that people would have to be accountable to double spending via a traditional banking system.
Which is fine, because the global banking system basically depends on double spending through loans (fractional reserve). If you double spend (spend more than you have), you accumulate a collectable debt and face legal consequences if you don't pay.
There's no way around this under Brands system, someone has to hold the keys to mint new currency, although it can be federated in the sense than every bank, store, or even person, could have their own issue.
Transactions will get processed eventually without a mining fee. It will just take longer, because many miners prioritize transactions with fees. "Mining" will eventually be unprofitable as well. And the only advantage to mining pools is to reduce variability in block payouts.
That's the theory, but changing the consensus algorithm would be a far bigger change than just adjusting the block size, which is causing plenty of controversy already. If they do try to move away from mining, they'll have to first get agreement from the miners, who've already purchased a lot of mining equipment.
I don't think so. You see if you move away from mining you need the agreement of the users not the miners, who by design will become surplus to requirements. If a method of securing the Blockchain without miner is found you could be pretty certain most people would back that option if it promoted further decentralisation.
Bitcoin will die the moment someone figures out how to build a decentralized crypto-currency that doesn't need a stupid idea like "mining" to be functional and secure.