BitShares Forum
Main => General Discussion => Topic started by: jishuku on March 21, 2014, 06:54:13 pm
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I just have to ask.. what do you mean by saying that bitcoin has a 12% security tax? I didn't quite understand that.
Edit: to clarify, I'm talking about the statement here - http://invictus.io/bitshares.php - that says "Additional 12% Security Tax".
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I just have to ask.. what do you mean by saying that bitcoin has a 12% security tax? I didn't quite understand that.
Edit: to clarify, I'm talking about the statement here - http://invictus.io/bitshares.php - that says "Additional 12% Security Tax".
Your shares (bitcoins) are being diluted at 12% per year as new shares are issued to miners.
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The energy for mining haws to be paid by SOMEONE...
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It's 10.5% right now, isn't it?
3600*365/12 500 000
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It's 10.5% right now, isn't it?
3600*365/12 500 000
The ASIC arm race meant BTCs were created at a faster rate.
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I just have to ask.. what do you mean by saying that bitcoin has a 12% security tax? I didn't quite understand that.
Edit: to clarify, I'm talking about the statement here - http://invictus.io/bitshares.php - that says "Additional 12% Security Tax".
https://www.usenix.org/legacy/event/hotsec06/tech/full_papers/wash/wash.pdf
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There are several benefits brought by mining, security is only one of them.
For Bitcoin, I'd say POW mining played a crucial role in its success, most bitcoiners I know are either directly or indirectly related to mining. ALL my friends who got interested in bitcoin started with mining. None of them are interested in Ripple, even though it's 0% dilution and most energy efficient.
The relationship between crypto coins and mining is much more complicated and profound than what's on the surface.
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There are several benefits brought by mining, security is only one of them.
For Bitcoin, I'd say POW mining played a crucial role in its success, most bitcoiners I know are either directly or indirectly related to mining. ALL my friends who got interested in bitcoin started with mining. None of them are interested in Ripple, even though it's 0% dilution and most energy efficient.
The relationship between crypto coins and mining is much more complicated and profound than what's on the surface.
Mining is a job that people can earn money by doing. People get involved to earn money and you are buying their support. People don't like 'handouts' and feel better if they 'work' to get their money. Sadly, few care if the work they do is necessary or productive. This is why mining has such a large impact.
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There are several benefits brought by mining, security is only one of them.
For Bitcoin, I'd say POW mining played a crucial role in its success, most bitcoiners I know are either directly or indirectly related to mining. ALL my friends who got interested in bitcoin started with mining. None of them are interested in Ripple, even though it's 0% dilution and most energy efficient.
The relationship between crypto coins and mining is much more complicated and profound than what's on the surface.
Mining is a job that people can earn money by doing. People get involved to earn money and you are buying their support. People don't like 'handouts' and feel better if they 'work' to get their money. Sadly, few care if the work they do is necessary or productive. This is why mining has such a large impact.
Here is an overview to help you all understand what Dan is saying http://letstalkbitcoin.com/is-bitcoin-overpaying-for-false-security/
I think PoW may still have value but only if the work solves problems, such as if it cures cancer or promotes decentralized renewable energy generation. If it's just security being provided as is the case with the current PoW without additional social benefits then perhaps Dan is right and we are over paying for security.
Those CPU resources are still valuable, mining should increase, but mining might not be the best way to secure the network and if a more efficient way can be found then your CPU resources are free to spend on more noble concerns.
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Mining is a job that people can earn money by doing. People get involved to earn money and you are buying their support.
Since the currency is owned by all participants, no one is buying their support, they mine, they own, they keep, they sell. Even if some miners eventually sell all the coins they mine, their contribution to the ecosystem is no less important than someone who just buy their coins from an exchange.
People don't like 'handouts' and feel better if they 'work' to get their money.
Yes, when people choose a crypto-currency system to participate on a voluntary basis, it's not all about logic -- human emotions play an important role. A currency design may be very logical and efficient, but if can't win the hearts from people, it can't succeed.
Sadly, few care if the work they do is necessary or productive.
This is correct from utilitarian point of view, however, necessity and productivity may not be the most important factors. As long as the process is somewhat useful, engaging a large group of people is more important.
I tend to think that mining is the bridge connecting physical and virtual worlds: CPUs, video cards, electricity power, USD, hardware/software skills, hours and hours of frustration and enjoyment, eventually all of these get converted into a few virtual coins; this subliminal yet important bonding process is what Ripple network will always lack.
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Is mining becoming part of a religion to some people? A religion based around the blockchain?
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Mining is a job that people can earn money by doing. People get involved to earn money and you are buying their support.
Since the currency is owned by all participants, no one is buying their support, they mine, they own, they keep, they sell.
Of course someone, because it's everyone.
Imagine if your central bank dilute the money supply by 2x.
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“Your shares (bitcoins) are being diluted at 12% per year as new shares are issued to miners"
It’s quite misleading, I think it’s not tax; it’s how bitcoin works. The government will charge you bitcoin taxes depending which country you live in. So I believe, there is no such thing as ""Additional 12% Security Tax"" that exists.
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“Your shares (bitcoins) are being diluted at 12% per year as new shares are issued to miners"
It’s quite misleading, I think it’s not tax; it’s how bitcoin works. The government will charge you bitcoin taxes depending which country you live in. So I believe, there is no such thing as ""Additional 12% Security Tax"" that exists.
You are right! It is just an analogy.
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tax: a forced redistribution of wealth
Inflation is considered a 'tax' by most people... so bitcoin using inflation to pay for security.
The only point is that whether you 'agree' to it or not, you are being diluted by more than 10% per year.
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Dilution by POW coin generation made sense when Crypto Currency was not known and had no demand. Now that there is demand and people can access the value of a network it is harmful to the value of a network when dilution keeps on going over such a long time.