Bitcoin Mining Reward About To Halve 600
First time accepted submitter ASDFnz writes "The reward for successfully completing a block (also called mining) is about to halve from 50 bitcoins to 25. From the article: 'Bitcoin is built so that this reward is halved every 210,000 blocks solved. The idea is as bitcoin grows the transaction fees become the main part of the reward and the introduction of new bitcoins slows down to a trickle. This also means that there will only ever be 21,000,000 bitcoins in circulation.' You can watch the countdown here."
Re:Bitcoins built-in failure (Score:4, Insightful)
Re:ugh only 21 million? (Score:1, Insightful)
Re:Bitcoins built-in failure (Score:5, Insightful)
Yep. That's a feature of any currency without inflation, and why inflation is actually a good thing. It discourages hoarding. Neutral or deflationary currencies are only good for the people who already have a lot of them.
Re:Quick find all the people that care (Score:1, Insightful)
Gold isn't that rare, they drag more of it out of the ground everyday. There is a max of 21,000,000 bitcoins. Enjoy your inflationary yellow rocks, chump.
Re:who cares? (Score:3, Insightful)
Apart from silk road, bitcoins have practically zero value in the vast majority of financial transactions
"Apart from the types of situations that it's useful in, it's not useful in any situations."
Re:Quick find all the people that care (Score:4, Insightful)
Gold is even useful in a real anarchistic society.
Re:Bitcoins built-in failure (Score:2, Insightful)
Neutral or deflationary currencies are only good for the people who already have a lot of them.
Nope. You think I use US currency because I like it? Because I think it has value over any other currency? Nope. It's because that's what I get paid in, its the money they accept at the stores I go to. I put it to you that no matter what price it's trading at, if I want to exchange money into Bitcoin I'll be able to. Why would I do such a thing? Because it's the currency that some people accept, and it has far less transaction fee than a wire transfer. You think I wouldn't just use USD for that if I could? You see, I just showed you that this deflationary currency is good for even people who only have few of them. Your move.
Re:Bitcoins built-in failure (Score:2, Insightful)
You see, I just showed you that this deflationary currency is good for even people who only have few of them.
What you posted has nothing to do with what I posted, and you showed nothing. Your logic does not resemble our earth logic.
Re:Additionally (Score:5, Insightful)
I think it will tell us that even in the most optimistic scenerio where Bitcoin achieves 100% market penetration, some people will go to their graves insisting that it won't work, isn't really money, and is all just a ponzi scheme.
Conversely, if Bitcoin is around for 100 years and nobody but a handful of extreme-right libertarians thinks it's worth so much as a wooden nickel, we will have learned empirically that some people will always go to their graves still wishing for a pony.
Re:Bitcoins built-in failure (Score:1, Insightful)
Or ButtCoin?
Re:Whoops (Score:4, Insightful)
Re:Austrian economics (Score:5, Insightful)
What problem does it solve for normal people?
It provides a censorship free way to transfer small amounts of money pseudonymously over the Internet, something regular payment providers still fail at (Paypal censors, proper bank transfers are far to expensive).
Re:Bitcoins built-in failure (Score:3, Insightful)
Such a currency would put a break at the constant need to invest in stocks and other stuff
Yes, it would. Investing in stocks and "other stuff" is, likewise, a good thing. Investments, really, are a form of loan. You're giving someone money with the expectation that, if the enterprise they're spending your money on succeeds, you'll receive your initial investment back, plus some. All commercial loans are backed by investments in "stocks and other sutff" - your mortgage, your small business loan, venture capital, everything. The interest you get on your savings account? That's made by the bank investing on your behalf.
If you disincentivize investing, all that grinds to a halt. Nobody can buy a house, because there's no money in mortgages - just stick it in the bank, and either you won't lose money (inflation-neutral) or you'll become richer (deflationary). Nobody who isn't already rich can start a business, or take on tertiary education, because nobody will loan them money.
You'll end up with a starkly divided society: the wealthy class, who can afford new houses, and cars, and to start new businesses, and the underclass who cannot afford a house or a car because they cannot get a decent job because they cannot afford an education because everybody's got their money locked up in their bank vaults appreciating instead of out backing student loans, small business loans and mortgages.
Re:Additionally (Score:4, Insightful)
My friends declined. It seems that, to them at least, the so-called fiat currency actually has more value than gold.
In a way the fiat currency does have more value. First of all, the currency is easy to accept and transfer and count change. Did the buyer have real gold or just some "yellow metal" of unknown chemistry? Electroplating is part of high school chemistry; "soft gold plating" can be done entirely in a solution [ucsb.edu]. Dealing with precious metals requires expensive infrastructure, such as equipment that can validate your coin. Often even banks cannot validate their stocks of metals without drilling. This is not going to work in retail. I bet your friends' cash register is not configured to receive payments in arbitrary valuables.
Secondly, the rate of exchange varies, and if the bike was purchased from the OEM for dollars it better be sold for dollars if you want to have a fixed, known margin. Selling for gold is equivalent to selling for dollars, and then the seller immediately buys gold for the whole amount. If he needs dollars to buy more products he then needs to sell this metal on the market and incur loss as the broker's fee. If the price of the metal goes down for a day then the seller will also lose money on the difference. (He of course would gain also if the price goes up; but very few bike shop owners moonlight as bullion traders.)
If I were in place of your friends, I would [also] suspect an attempt at fraud. What people say is totally irrelevant; con artists specialize in being very convincing.
Re:Who cares, the mining game is over anyways. (Score:5, Insightful)
During a gold rush the only person who actually gets rich is the man selling shovels.
Re:What does it calculate? (Score:4, Insightful)
OMG you're right. I can't believe all the people who've been working on this project for the last three years missed these numerous fatal flaws.
Please, go onto the Bitcoin forums [bitcointalk.org] and let them know what you've discovered right away so they all know it's time to give up and go home.
Re:Quick find all the people that care (Score:5, Insightful)
There is a major difference between political anarchy and chaos. In political anarchy you still have order, but instead of a central government controlling everything it's done with voluntary contracts at the individual level. One of the core beliefs an anarchist has is personal freedom via volunteerism is the only real kind of freedom. There will still be a need for money in a society like that. It could be gold, silver, beads, goats, or whatever the two people doing business agree on.
If you or I believe that's a viable political structure is a different conversation.
Re:Quick, calculate me another way to profit. (Score:5, Insightful)
The incentive to work in capitalism is just as shallow, just better veiled, but it starts to fall apart as well now. And please apologize when I ignore the rest of the diatribe. I have no idea where you pull those examples out of, but I better not touch that place.
In communism, the promise was "work hard, and soon in the future we'll all be living in the socialist worker paradise". Well, people started out believing in it. No, seriously. I'm serious. Look at how Russia developed in the 1920s, they turned from a backwards agrarian society that was close to a feudal system into an industry nation within a few years. At a horrible price, no doubt about that, but people believed in it and pulled through. Well, guess what, it didn't work out. And after WW2, it became plainly obvious to everyone that this "work hard and soon we'll all be living better" is an empty promise. Especially when you see how on one hand the party idiots are being promoted and have access to things you can only dream of, and that no kind of work or butt kissing will ever give you the same. You may get ahead a bit compared to your peers if you are a "more loyal comrade", but it's just the crumbs from the cake the big players eat, and that's a circle you cannot climb into, no matter how much you try, it's a closed circle of "friends" that matched and mingled in party organizations and party training camps. Your only chance to get access to at least those crumbs is that you work extra hard "for the greater good", volunteer for "extra duty" and similar crap.
The joke is now that capitalism works actually the same way. Well, not quite the same way, it's different empty promises and different approach, but the end result is exactly the same. The promise of capitalism is "being rich is the goal, because money can buy whatever you need, work hard and one day you have the chance to be rich too". Well, some people buy into that. Most, actually. No system could exist without enough people supporting or at the very least not sensibly opposing it. But it becomes more and more obvious that the promise is shallow, too. No amount of work will ever elevate you to the executive levels of the big corporations where the big bucks are being handed out. That's a closed circle of people who know each other from various fraternities or buddies from the same schools. Schools that you couldn't go to because your parents are not rich enough to send you there. Because they didn't have a degree from said schools to get into a position that... you get the idea, right?
Money stays amongst itself, there's no butting in for you, peasant. But if you work extra hard, you might get promoted in the office treadmill, you'll get some bullshit title and you'll feel important because now you make the big bucks, i.e. like 200 bucks more per month. But "rich", in the capitalist sense, you'll never be. Neither you, nor your kids.
So, essentially, whether you call it communism and make party loyalty the decider between powerful and peasant, or whether you call it capitalism and use money for the same, it's not that much of a difference. If you're not in the correct circles, if you're not with the right people, you won't get anywhere in either system. The reason capitalism works better is simply that it's harder to see through, that the lie of "everyone can get rich if you work hard enough" is compelling, especially if you get to hear about someone actually "making it". In communism, those people were "worker of the month", btw, and had about as much influence on your well being. Well, maybe it upped your monthly quota because obviously it's possible. In capitalist terms, I guess it would be something akin to "why hand out wellfare, you see there is that one guy that made it, why can't they?"
Re:Quick find all the people that care (Score:4, Insightful)
There is no difference. In a real anarchy you pay for 'protection' to your local gang, which replace the government quite quickly.
Re:Quick, calculate me another way to profit. (Score:5, Insightful)
But then how do I get what I want?
It's not like communism magically changes everyone's hearts to love and selflessness.