There's a simple formula for measuring it which I've mentioned before:
Divide your (individual or group) average daily increase in btc holdings by 3600 and express as a percentage.
Gold collapsing. Bitcoin UP.
- Thread starter cypherdoc
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Divide your (individual or group) average daily increase in btc holdings by 3600 and express as a percentage.
Zarathustra
Well-Known Member
- Aug 28, 2015
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In that case they already did not react. The additional adoption went into to the altcoin market and Bitcoin lost market share. Why do you think people will react different in the next months?
I wouldn't claim that it is impossible, but I think it's also possible that people can be fooled the next months as they have been the last ones, until it's too late and Bitcoin becomes the Myspace of the crypto currencies. .
like i've said, i can't wait for July to come. not b/c i can rely on the price going up as a result (it may not) but merely for the fact that it will cut miners income in half exerting the real kind of pressure we need to force them to act.
i'm still puzzled as to Bitfury's strategy given their flip flopping. and i still wonder if Petrov is strategically playing a game that forces out as many of his Chinese competitors when the halving comes due to their unpreparedness all the while completing the setup of his 3 huge BW capable mining datacenters in Georgia. Suddenly, big blocks may just fine for Bitfury. i can't see how they pay for & profit from their expansion in any other way.
[doublepost=1456077229][/doublepost]this is true:
i'm still puzzled as to Bitfury's strategy given their flip flopping. and i still wonder if Petrov is strategically playing a game that forces out as many of his Chinese competitors when the halving comes due to their unpreparedness all the while completing the setup of his 3 huge BW capable mining datacenters in Georgia. Suddenly, big blocks may just fine for Bitfury. i can't see how they pay for & profit from their expansion in any other way.
[doublepost=1456077229][/doublepost]this is true:
albin
Active Member
- Nov 8, 2015
- 931
- 4,008
There's definitely something to this, I can see it in the occasional "noob" post or thread out there, where the amounts that people just now getting into Bitcoin acquire are bafflingly low compared to the standards that I'm used to when I first found out what was going on.
@Justus Ranvier @albin
that's why i don't get what @Justus Ranvier is saying about discounting past accumulations in comparison to present & future daily accumulations. one could much more affordably accumulate significant hoards from previous years compared to miniscule amounts today the economic differences being huge.
that's why i don't get what @Justus Ranvier is saying about discounting past accumulations in comparison to present & future daily accumulations. one could much more affordably accumulate significant hoards from previous years compared to miniscule amounts today the economic differences being huge.
Paying for the operation of the network requires a continual expenditure of resources, a.k.a income.
Somebody who bought Bitcoins in the past supported the operation of network on the day he bought them, today is a new day and there are new bills to pay.
Here is a post I wrote about the relaxed synchronicity requirement for non-mining nodes for soft- and hard-forking changes. It also contains a preamble that illustrates how bizarre the bitcoin-dev mailing list has become, and that Blockstream/Core is responsible for the censorship in addition to Theymos.
Illustrations:
MAIN POINT: For a soft-forking change, nodes can upgrade asynchronously after the miners start enforcing a new rule. For a hard-forking change, nodes can upgrade asynchronously before the miners stop enforcing an old rule. For example, Xapo, Coinbase and BitPay could all declare "we accept blocks up to 8MB today."
Link to full post.
Illustrations:
MAIN POINT: For a soft-forking change, nodes can upgrade asynchronously after the miners start enforcing a new rule. For a hard-forking change, nodes can upgrade asynchronously before the miners stop enforcing an old rule. For example, Xapo, Coinbase and BitPay could all declare "we accept blocks up to 8MB today."
Link to full post.
But those of us who bought when the price was in single digits are the ones who helped propel the price to where it is today and our efforts and risk were rewarded with a greater proportionate share of outstanding bitcoins compared to those who start accumulating today. Our unwillingness to sell, no matter if we buy a single additional coin today, is likewise what keeps the price propped up to the levels of today which greatly assists miners efforts to sell their daily production at current profitable levels. Without us large long term hodlers, the price would collapse and they'd be toast.
All of this is true - large long term holders can make the price go down.
Holding does not, however, create revenue for miners.
Miners income depends on continual, active buying and passive non-action by savers.
The non-action by existing savers is necessary, but not sufficient to support the network.
I have a theory that the next wave of alt coins will not be based on new genesis blocks as we have see so far, but on alternative branches of the existing Bitcoin main chain.
Altcoins so far have not been able to get past the significant network effect lead Bitcoin has by being first, and this is a problem no altcoin has solved. The common market view was altcoins were simply get rich quick schemes for early developers and adopters who only made minor adjustments to Satoshi's invention.
I believe the next set of altcoins will solve this by basing themselves on the existing bitcoin main chain. This does three things: 1) It solves the coin distribution problem by using Bitcoin's current distribution 2) It solves the 'get rich quick scheme' problem by taking that aspect out of the equation, 3) It solves the network effect problem by launching with large number of users who already have coins.
You stated above that "You'd have to get all the exchanges wallets and payment processors on board. There are just too many differing opinions and people involved to get the sort of coordination required." This only holds if the goal is a smooth transition where everyone moves together. However this does not have to be the goal. If the goal is to create a new bitcoin that slowly takes over because it is better, then everyone does not have to move together.
Based on Classic's user adoption I think it is reasonable to say if miners stay with core and block Classic, then 5-10% of people would be willing to take a full fork path. This would be a huge user base to start with. The new branch would start with a reasonable market cap and some level of usage. We would also see adoption by major exchanges, etc.
What is more is the branch is risk free to use and support. Let's say we tried it and eventually it failed, well you still have your original coins on core's chain untouched.
I am not saying it should be done today, but maybe later this summer if miners are still blocking. I personally am not participating on core's vision and suspect there are many like me. Not enough to make a majority, but enough to make the first functional alt branched from bitcoin's main chain.
[doublepost=1456089904,1456089165][/doublepost]
What holding does is effectively take supply out of the market, which means that the demand of current users is spread over a smaller supply of coins.
If let's say 3/4 of coins are held and not used, then if they were all sold we should see price drop to 1/4 it's previous price (it probably would dump hard but then only eventually recover to 1/4 its previous stable level).
So holders do create revenue for miners, because they make the coinbase rewards worth more.
- Aug 22, 2015
- 1,558
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I agree 100% with this.
We are entering an interesting few months. There will be a battle-royal over the deployment of soft-fork SegWit which needs 75% for activation and 95% for exclusive lock-in. I notice that the segwit block version is 5 which ignores the current Classic block version. Of course, all old nodes become glorified light-weights after SegWit activation.
There will be no opt-out of SegWit, like there is from RBF.
BU will need to have it to remain a viable implementation.
For those who are despondent, the time to sell is probably nearer the halving. Bound to be one more spike (famous last words!)
@rocks, Yes. For a spin-off with different PoW, let's see how this settles after the halving. If it is a complete BS victory, alts are rampant, and BU and Classic are stalled like XT, then a spin-off remains viable. What is going to succeed in the real-world:: a crippled old-BTC with LN servers handling most volume, or a spinoff new-BTC with subchains, thinblocks/IBLT giving main-chain scaling?
As was mentioned in this thread. Timing is everything.
https://bitco.in/forum/threads/bitcoin-maximalism-spinoff-technology.462/
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VeritasSapere
Active Member
- Nov 16, 2015
- 511
- 1,266
Not sure if we should call "chain forks" altcoins. However I do agree with you, I was always expecting this to happen over the long term. This alone might be a good enough reason to hold on to your Bitcoins, we could imagine that there will be many cryptocurrencies that will spawn off the Bitcoin blockchain. Bitcoin would be like tree with many branches. Anyone that has coins in the original chain might actually be quite fortunate if this is the possible future we are facing. Bitcoin might even be outcompeted and obsolesced by one of these chain forks, that is if BS got their way. There would be a satisfactory irony in such an outcome.
I do not consider this a problem, therefore also not something that needs to be solved.
An unfortunate perception however this is not the case for many good altcoin projects.
Again I did not consider this a problem, this is just how cryptocurrencies start, they all start from nothing.
Agreed.
I would absolutely support the first functional alt branched from Bitcoins main chain. Especially considering how much the original vision of Satoshi is currently being tortured by what is being done to Bitcoin today, It is sad to see this happen to the Bitcoin we love, the possibility to fork however does give back our freedom. Who knows we might fork as a minority to begin with and end up the dominant chain again. It is either that or another altcoin takes Bitcoins place as the dominant cryptocurrency, since I am confident that Block Streams vision for Bitcoin is guaranteed to fail, the economics and game theory are completely flawed.
I do think that such a chain fork should keep the original hashing algorithm, asics should be considered to be a positive development for any cryptocurrency. After all Bitcoins gains much of its value from its proof of work, leaving behind SHA256 would be a major setback to the alternative chain, there is no good reason to switch the mining algorithm.
I also do not think that such a course of action will be necessary for a while longer. It is still to early to give up hope for the longest chain, however I have to admit these recent developments are disheartening. Hopefully the pendulum swings back to the other side again soon, I have noticed we have had a few of these events now where both sides either claim victory or defeat prematurely, not realizing that the pendulum is about to swing back again.
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- Dec 16, 2015
- 2,806
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@VeritasSapere
Personally I am only at the stage where I would consider it "an unavoidable development", but am open to arguments as to its positive effect.
Interesting POV about which I would like to hear more of your reasoning.
Personally I am only at the stage where I would consider it "an unavoidable development", but am open to arguments as to its positive effect.
That's almost true in a practical sense, but it's not literally true. Otherwise you could maximise revenue for miners by making generation outputs never become spendable, thus driving supply to zero and revenue to infinity.
Savers refrain from competing with miners for the pool of buyers.
Neither the savers nor the miners create the pool of buyers - they only decide how to divide it up between themselves.
Norway
Well-Known Member
- Sep 29, 2015
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VeritasSapere
Active Member
- Nov 16, 2015
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@freetrader ASICs significantly increase the security of any proof of work network. Since they massively increase the hashing power way beyond anything CPU or GPU are capable off. This makes it much harder to attack from any outside source. Governments for instance tend to have a large amounts of CPU power at their disposal, which makes such cryptocurrencies vulnerable to attack by such an entity. If they had to construct their own ASICs instead, to compete with other ASICs it would make it much more expensive to carry out such an attack.
Increasing the hashing power essentially means increasing the security, which gives back increased value, which in turn increases the security again, a virtues cycle.
Initially when a currency is first launched it is good that there is a high degree of ASIC resistance in the algorithm, this does bring about a fairer distribution in this initial phase. While the currency is still small it can not sustain a diverse ecosystem of chip manufactures, therefore the use of standard equipment makes sense, since at this stage it would also benefit mining decentralization.
This process towards ASICs can be seen as an evolution towards a more advanced and mature ecosystem. As mining becomes a more professional industry spread around the world in many jurisdictions with competing manufactures, it actually becomes more anti fragile because of its shear size and sophistication.
Bitcoin is interesting as a form of democracy, because it is different to modern state democracies in that it places positive incentives on a select group which essentially votes in the interests of the economic majority, almost the opposite of how modern state democracies work lol. The point being however is that I can actually see an advantage to the miners being even more professional, invested and by extension you would hope better informed. This should strengthen the incentives and the actions of the miners in reflecting the will of the economic majority.
I understand that some of these points that I am making do seem to be somewhat at odds with recent developments, but I do have any reason to think why this theory is not correct. It could be that either the mining industry is not mature enough to deal with such an existential governance issue or that they will eventually still make the right decision. There are also a number of different factors which can influence this as well or it could just be that this will take longer to play out then we would expect. This is after all one of the fundamental premises that Bitcoin rests upon.
It is good to point out here that I do consider the biggest threat to mining centralization today actually to be centralization of manufacturing. It could even be argued that the model that I am discussing might not even work if manufacturing is not sufficiently decentralized.
It could be that in terms of the evolutionary growth of cryptocurrencies that we are still at the dangerous transitional phase between the comparatively more distributed late GPU/CPU mining phase and the early ASIC mining.
It is also not any more or less efficient doing CPU/GPU mining over ASIC mining because in essence all proof of work is arbitrary. It is more about equipment cost and electricity consumption. A one megawatt mine full of CPU miners compared to a one megawatt mine full of ASIC miners is not that different presuming the former is done on an ASIC resistant cryptocurrency.
In the specific case we where discussing the infrastructure and manufacturing for ASICs already exists, since much of the initial distribution for Bitcoin has already taken place it makes sense to leverage the advantages that such a large mining industry affords. Even in the case of a minority fork if we did change the algorithm it would mean that the SHA256 chain will have far greater security. The minority fork would most likely take a long time to develop the infrastructure to equal the proof of work security the longest SHA256 chain in this case would afford.
This development of ASICs is a part of Bitcoin and it can be considered that any chain fork of Bitcoin should be able to leverage this advantage for themselves and compete with the longest chain over the hashpower. We could even imagine a future with multiple chain forks of Bitcoin, each using the same hashing algorithm, however all combined contributing to the decentralization of manufacturing ensuring a healthy ecosystem for all.
I do not see much credence in the idea that the minority chain will be attacked to its destruction by the longest chain and that therefore only one chain with the same hashing algorithm can exist. I think the altcoin space actually serves as a good counterfactual to this claim, since there are even altcoins out there that use the same algorithm as Bitcoin, it is not a problem, the market finds its own equilibrium based on mining profitability.
A bit of a wall of text I know, but that was a great question, thanks. One positive thing about this whole blocksize debate and existential crisis of Bitcoin is that it is making us ask a lot of interesting questions and exploring concepts that we might not have otherwise explored in such depth.
My hope is that what we are going through is Bitcoin coming to understand itself, as it grows up, acquiring more self knowledge and self awareness. An awakening even, my hope is that we will all come out of this stronger and wiser.
Increasing the hashing power essentially means increasing the security, which gives back increased value, which in turn increases the security again, a virtues cycle.
Initially when a currency is first launched it is good that there is a high degree of ASIC resistance in the algorithm, this does bring about a fairer distribution in this initial phase. While the currency is still small it can not sustain a diverse ecosystem of chip manufactures, therefore the use of standard equipment makes sense, since at this stage it would also benefit mining decentralization.
This process towards ASICs can be seen as an evolution towards a more advanced and mature ecosystem. As mining becomes a more professional industry spread around the world in many jurisdictions with competing manufactures, it actually becomes more anti fragile because of its shear size and sophistication.
Bitcoin is interesting as a form of democracy, because it is different to modern state democracies in that it places positive incentives on a select group which essentially votes in the interests of the economic majority, almost the opposite of how modern state democracies work lol. The point being however is that I can actually see an advantage to the miners being even more professional, invested and by extension you would hope better informed. This should strengthen the incentives and the actions of the miners in reflecting the will of the economic majority.
I understand that some of these points that I am making do seem to be somewhat at odds with recent developments, but I do have any reason to think why this theory is not correct. It could be that either the mining industry is not mature enough to deal with such an existential governance issue or that they will eventually still make the right decision. There are also a number of different factors which can influence this as well or it could just be that this will take longer to play out then we would expect. This is after all one of the fundamental premises that Bitcoin rests upon.
It is good to point out here that I do consider the biggest threat to mining centralization today actually to be centralization of manufacturing. It could even be argued that the model that I am discussing might not even work if manufacturing is not sufficiently decentralized.
It could be that in terms of the evolutionary growth of cryptocurrencies that we are still at the dangerous transitional phase between the comparatively more distributed late GPU/CPU mining phase and the early ASIC mining.
It is also not any more or less efficient doing CPU/GPU mining over ASIC mining because in essence all proof of work is arbitrary. It is more about equipment cost and electricity consumption. A one megawatt mine full of CPU miners compared to a one megawatt mine full of ASIC miners is not that different presuming the former is done on an ASIC resistant cryptocurrency.
In the specific case we where discussing the infrastructure and manufacturing for ASICs already exists, since much of the initial distribution for Bitcoin has already taken place it makes sense to leverage the advantages that such a large mining industry affords. Even in the case of a minority fork if we did change the algorithm it would mean that the SHA256 chain will have far greater security. The minority fork would most likely take a long time to develop the infrastructure to equal the proof of work security the longest SHA256 chain in this case would afford.
This development of ASICs is a part of Bitcoin and it can be considered that any chain fork of Bitcoin should be able to leverage this advantage for themselves and compete with the longest chain over the hashpower. We could even imagine a future with multiple chain forks of Bitcoin, each using the same hashing algorithm, however all combined contributing to the decentralization of manufacturing ensuring a healthy ecosystem for all.
I do not see much credence in the idea that the minority chain will be attacked to its destruction by the longest chain and that therefore only one chain with the same hashing algorithm can exist. I think the altcoin space actually serves as a good counterfactual to this claim, since there are even altcoins out there that use the same algorithm as Bitcoin, it is not a problem, the market finds its own equilibrium based on mining profitability.
A bit of a wall of text I know, but that was a great question, thanks. One positive thing about this whole blocksize debate and existential crisis of Bitcoin is that it is making us ask a lot of interesting questions and exploring concepts that we might not have otherwise explored in such depth.
My hope is that what we are going through is Bitcoin coming to understand itself, as it grows up, acquiring more self knowledge and self awareness. An awakening even, my hope is that we will all come out of this stronger and wiser.
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Richy_T
Well-Known Member
- Dec 27, 2015
- 1,085
- 2,741
Rocks, it's interesting to consider that the devs had to reset testnet because people were starting to trade the coins mined there and they were gaining value.
[doublepost=1456103635][/doublepost]
I'd also like to see a roadmap for removing the discount altogether with an increased max block size.
[doublepost=1456103635][/doublepost]
This is true. However, BU (and possibly Classic) should consider making it clear that while they will use the discount for calculating the blocksize, they won't for calculating the priority, meaning that BU (and Classic) implementations would be more profitable for miners.
I'd also like to see a roadmap for removing the discount altogether with an increased max block size.
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