Bitcoins/Litecoins/Virtual Currencies

Flobee

Flobee

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They will increase the transaction fees to protect the network when mining rewards disappear. Whether this causes the network to implode or not remains to be seen.
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Potentially yea, one of the big debates that was had in 2017 and in some ways is being rehashed now is related to block size, or the scarcity of space for transactions. Larger block size allows for lower fees as space is less scarce. One of the compromises of the block wars was increasing block space to 4mb, from iirc 1mb. A 400% increase that may end up having been a very poor choice in hindsight.

Not unfixable but something worth understanding.
 
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Seananigans

Seananigans

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Flobee said:
Because if there was a block reward forever then there wouldn't be a supply cap. The idea is that the transact fees should be high enough by that point where block rewards won't be needed, or as I stated earlier actors with other incentives do the mining.

Block reward is supply inflation. Halvings move inflation toward zero exponentially.
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No I understand why block rewards have to stop to have a finite supply. I just don’t understand the perceived need for perpetual mining activity.
 
Flobee

Flobee

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Seananigans said:
No I understand why block rewards have to stop to have a finite supply. I just don’t understand the perceived need for perpetual mining activity.
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Because Bitcoin is a ledger, or a record of ownership essentially. No more blocks = no more transactions. Blocks require miners. If you have no miners you have no blocks. Each block is just a list of transactions with ownership changing from one wallet to another. So if you aren't mining blocks, you're not making transactions, if you're not making transactions Bitcoin isn't working.

If miners have no financial incentive then you need another reason for them to mine, because mining has real world cost. Mining is a requirement for Bitcoin to function.

EDIT: honestly you'd be best served just reading the Whitepaper it's only 9 pages and easy enough to understand technically even if you don't understand all the why's.
 
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Flobee said:
Because Bitcoin is a ledger, or a record of ownership essentially. No more blocks = no more transactions. Blocks require miners. If you have no miners you have no blocks. Each block is just a list of transactions with ownership changing from one wallet to another. So if you aren't mining blocks, you're not making transactions, if you're not making transactions Bitcoin isn't working.

If miners have no financial incentive then you need another reason for them to mine, because mining has real world cost. Mining is a requirement for Bitcoin to function
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Got it. Are we perhaps overemphasizing the need for a financial incentive, when there’s an obvious “needs to be done” incentive baked in? Wouldn’t enough people do it just because it needs to be done?

A father doesn’t have a direct financial incentive to feed his family but he still does it, etc.
 
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Flobee said:
Because Bitcoin is a ledger, or a record of ownership essentially. No more blocks = no more transactions. Blocks require miners. If you have no miners you have no blocks. Each block is just a list of transactions with ownership changing from one wallet to another. So if you aren't mining blocks, you're not making transactions, if you're not making transactions Bitcoin isn't working.

If miners have no financial incentive then you need another reason for them to mine, because mining has real world cost. Mining is a requirement for Bitcoin to function.

EDIT: honestly you'd be best served just reading the Whitepaper it's only 9 pages and easy enough to understand technically even if you don't understand all the why's.
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Also… wouldn’t the difficulty just ramp WAY down at that point, drastically reducing the real world cost?
 
Flobee

Flobee

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Seananigans said:
Got it. Are we perhaps overemphasizing the need for a financial incentive, when there’s an obvious “needs to be done” incentive baked in? Wouldn’t enough people do it just because it needs to be done?

A father doesn’t have a direct financial incentive to feed his family but he still does it, etc.
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It's certainly possible. Energy isn't free though so Bitcoin is going to need to be pretty systimaclly important for that to be a safe bet. Financial incentives are much more powerful.

Re: difficulty yes it would reduce and technically a single laptop could run the network... That's not viable for a 1.5-2 trillion dollar asset though. Hashrate will have direct correlation to value of the network. See 51% attack description. Other risks as well
 
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Seananigans

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Flobee said:
It's certainly possible. Energy isn't free though so Bitcoin is going to need to be pretty systimaclly important for that to be a safe bet. Financial incentives are much more powerful.

Re: difficulty yes it would reduce and technically a single laptop could run the network... That's not viable for a 1.5-2 trillion dollar asset though. Hashrate will have direct correlation to value of the network. See 51% attack description. Other risks as well
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Sure you still want many entities running the network, but the reason I mentioned difficulty is because the high end gpus are a majority of the power drain. If it’s a third grade level problem to solve blocks at the end-times, then people can run the network on potatoes that barely use any power. No?
 
Flobee

Flobee

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Seananigans said:
Sure you still want many entities running the network, but the reason I mentioned difficulty is because the high end gpus are a majority of the power drain. If it’s a third grade level problem to solve blocks at the end-times, then people can run the network on potatoes that barely use any power. No?
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No, firstly Bitcoin doesn't use GPUs. It technically could but they can't compete in calculating SHA-256 compared to ASICs which are specialized hardware for mining Bitcoin ... Or specifically for hashing SHA256.

You're not seeming to understand that hashrate is security, so no you can't just run it on a potato and walk away. You need sufficient hash rate to ensure bad actors can't hijack the network
 
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