Author Topic: Gavin's thoughts on mining  (Read 4328 times)

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Offline gamey

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Btw let's do some simple maths to see why mining isn't a problem

Let says we are in 2025 and 1BTC = 100,000$.
Over one year, 3.125*6*24*365 = 164 250 BTC are mined. So that's 16,5 billion of revenue for miners by year.

Today, Internet revenue is 8 trillion/year:
http://news.softpedia.com/news/Research-Values-Internet-Revenue-at-8-Trillion-US-Dollars-232894.shtml

It would be interesting to break down this 8 trillion number to see what portion go to the infrastructure (routeurs, cables, servers...) but my guess is that this number is far more than 16,5 billion.  Cisco revenue in 2014 is 47 billion, so that makes the point.

Sorry but mining will no be a problem from an economic standpoint, even at 1m$/BTC, just wait 10 years.

In 2025 the inflation will have dropped down to 1.5%.  Currently it is ~10%.  So in absolute bitcoin terms, inflation is 6.6 times higher now. Ok, so what if BTC is 100k?  Thats 444x where we're at now, but only 1/6.6 the inflation.  That means in $ terms, you'll still have 68X the downward pressure in $$ (assuming constant efficiency, in reality it'll be considerably lower... ).  That is not $$ simply thrown away, that is money that is thrown away on carbon production.  In 10 years it will be a lot more apparent that global warming is a very serious thing and even the weirdo guys with cognitive biases will be hard pressed to deny it.  You think this is going to make BTC popular as a currency going forward?

This is all assuming that BTC survives that long with the constant downward pressure.  People need to have faith in the price.

Internet revenue has nothing to do with this except to point at something quite different that generates/churns through a lot of money.
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Offline speedy

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??? Why would you buy again once the block reward halves? It does not necessarily imply an increased price IMHO

I think it does allow for an increase in the price. Bitcoin is a tug of war between the $ entering the economy and the amount of $ spent on mining. The block reward halving next year will shift the balance of that tug of war to arrive at a higher equilibrium price.

Of course hopefully Bitshares will be as accessible as a regular exchange by then and therefore be profitable.

The problem is those people treat Satoshi as a god when they should be adjusting his poorly conceived inflation schedule with a hardfork.

They should keep the same hard limit and inflation schedule, just change who the new coins are issued to (Delegates like Gavin who wont dump like miners). The ironic thing is that Gavin in that conversation was also talking about the money issues that the Foundation is having and how to fund Core development. He is literally choosing to burn money instead of paying himself.
« Last Edit: April 19, 2015, 09:33:25 pm by speedy »

Offline jcrubino

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Im watching a meetup with Gavin Andresen, and hes saying stuff thats making me scratch my head:


On the positive side, Mike Hearn did talk about moving away from Proof of Work.

Offline BldSwtTrs

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Btw let's do some simple maths to see why mining isn't a problem

Let says we are in 2025 and 1BTC = 100,000$.
Over one year, 3.125*6*24*365 = 164 250 BTC are mined. So that's 16,5 billion of revenue for miners by year.

Today, Internet revenue is 8 trillion/year:
http://news.softpedia.com/news/Research-Values-Internet-Revenue-at-8-Trillion-US-Dollars-232894.shtml

It would be interesting to break down this 8 trillion number to see what portion go to the infrastructure (routeurs, cables, servers...) but my guess is that this number is far more than 16,5 billion.  Cisco revenue in 2014 is 47 billion, so that makes the point.

Sorry but mining will no be a problem from an economic standpoint, even at 1m$/BTC, just wait 10 years.
« Last Edit: April 19, 2015, 06:32:42 pm by BldSwtTrs »

Offline BldSwtTrs

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In 2025, more than 20 millions BTC will have been mined and inflation will be less than 0.8%.

BTC Inflation schedule is almost perfect, if you want my opinion. It sucks only for those who think waiting 10 years before being insanely rich is too long.
« Last Edit: April 19, 2015, 06:16:11 pm by BldSwtTrs »

Offline gamey

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The problem is those people treat Satoshi as a god when they should be adjusting his poorly conceived inflation schedule with a hardfork.

Bitcoiners are stupid but they're not that stupid.

I don't follow?  I don't think it is very easy to hardfork bitcoin, but do you think adjusting the inflation downwards would be that damaging?  It would put off the miners but the reduction in downward price pressure could easily make up for it.  Smooth out the blockreward differences...

I agree that mathematically Bitcoin would benefit from adjusting the inflation downwards but even though their flawed supply structure may prove to be their long-term downfall, changing their 21 million Bitcoin supply rules, would mean a transition from being viewed as a digital gold type money (pre-determined supply)  to one whose supply is controlled/altered by people and potentially a small group of people at that.

People assign value correctly to and adopt forms of money that require the least trust in people, (Because people can't be trusted & are 'short-termist' ) such as gold, silver and more recently Bitcoin. Altering the pre-determined supply rules would require you to trust people more going forward resulting in substantial value loss.

I think most Bitcoiners and crypto-currency holders understand some version of this general idea/concept and it's unlikely they would risk losing their digital gold status as Bitcoin's value is almost exclusively derived from the use of their tokens as money. (Unlike BTS whose shares now derive value from expectations surrounding the products and services based on it's blockchain like BitAssets.)

Ahh I see.  I think such things are all perception and if the inflation is largely removed and results in fewer coins or the same longterm max then I have to wonder if the result would be so drastic. It really is psychology, part rational and part irrational.  Very hard to know what the results would be.

It is pretty simple math to look at the downward pressure created as the market cap increases.  This problem will still be there even when the blockreward halves.

The truth about global warming is starting to become quite apparent.  (yes it exists...for those who think it is political ... I can't even fathom)  The popularity of a global currency is going to be constrained somewhat by the power consumption.  Honestly, when I first heard of Bitcoin that is what turned me off.  "backed by electricity".

edit - It really comes down to having people perceive that the change is the result of consensus.
« Last Edit: April 19, 2015, 05:05:16 pm by gamey »
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Offline xeroc

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Just see him like a Troll
i don't know him personally, but I wouldn't go that far .. he definitely knows the tech space .. maybe just lack the economical implications

I am so glad that bytemaster does, he is surely not just another altcoin dev!

BM > Gavin
may be a statement that I could agree with.. calling Gavin a troll is defintely not


Offline infovortice2013

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Im watching a meetup with Gavin Andresen, and hes saying stuff thats making me scratch my head:

"It seems like the big drop [from $1000] was when China said..."
He must know that because mining difficulty goes up with the price that miners are forced to sell to break even, therefore the price of $1000 was totally unsustainable given that it would require billions of $ from buyers to keep the price up.

Second bizarre thing he says:
"Mining centralization & decentralization will go in waves".
He compares mining to the evolution of computing from mainframes -> PCs -> phones connected to the cloud. When in reality the higher the price the more people are incentivized to make specialized ASICs. Its a one-way trajectory.

Here's where the China & mining discussion starts:
https://youtu.be/RIafZXRDH7w?t=18m08s

Its an eye opener that the Bitcoin Core developers seem to be so slow compared to whats going on here. It reinforces my view not to buy any Bitcoin until the block reward halving which is still a year away.

Just see him like a Troll
New Keyoteeid: 5rUhuLCDWUA2FStkKVRTWYEqY1mZhwpfVdRmYEvMRFRD1bqYAL
new08/21 id 5Sjf3LMuYPSeNnjLYXmAoHj5Z6TPCmwmfXD6XwDmg27dwfQ

Offline Empirical1.2

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The problem is those people treat Satoshi as a god when they should be adjusting his poorly conceived inflation schedule with a hardfork.

Bitcoiners are stupid but they're not that stupid.

I don't follow?  I don't think it is very easy to hardfork bitcoin, but do you think adjusting the inflation downwards would be that damaging?  It would put off the miners but the reduction in downward price pressure could easily make up for it.  Smooth out the blockreward differences...

I agree that mathematically Bitcoin would benefit from adjusting the inflation downwards but even though their flawed supply structure may prove to be their long-term downfall, changing their 21 million Bitcoin supply rules, would mean a transition from being viewed as a digital gold type money (pre-determined supply)  to one whose supply is controlled/altered by people and potentially a small group of people at that.

People assign value correctly to and adopt forms of money that require the least trust in people, (Because people can't be trusted & are 'short-termist' ) such as gold, silver and more recently Bitcoin. Altering the pre-determined supply rules would require you to trust people more going forward resulting in substantial value loss.

I think most Bitcoiners and crypto-currency holders understand some version of this general idea/concept and it's unlikely they would risk losing their digital gold status as Bitcoin's value is almost exclusively derived from the use of their tokens as money. (Unlike BTS whose shares now derive value from expectations surrounding the products and services based on it's blockchain like BitAssets.)
« Last Edit: April 19, 2015, 03:08:18 pm by Empirical1.2 »
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Offline CLains

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let us all be friendly, the loss for bitcoin is distressing, and the cold hard truth will ring in their ears clearly enough, we just need to provide them with the help and alternatives they need when they are ready

Offline gamey

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The problem is those people treat Satoshi as a god when they should be adjusting his poorly conceived inflation schedule with a hardfork.

Bitcoiners are stupid but they're not that stupid.

I don't follow?  I don't think it is very easy to hardfork bitcoin, but do you think adjusting the inflation downwards would be that damaging?  It would put off the miners but the reduction in downward price pressure could easily make up for it.  Smooth out the blockreward differences...
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Offline xeroc

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Imho satoahi did great with bitcoin1.0 .. and we are doing great wit bitcoin2.0 .. not "fair" to compare IMHO

Offline Empirical1.2

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The problem is those people treat Satoshi as a god when they should be adjusting his poorly conceived inflation schedule with a hardfork.

Bitcoiners are stupid but they're not that stupid.
If you want to take the island burn the boats

Offline gamey

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The problem is those people treat Satoshi as a god when they should be adjusting his poorly conceived inflation schedule with a hardfork.
I speak for myself and only myself.

Offline fuzzy

Im watching a meetup with Gavin Andresen, and hes saying stuff thats making me scratch my head:

"It seems like the big drop [from $1000] was when China said..."
He must know that because mining difficulty goes up with the price that miners are forced to sell to break even, therefore the price of $1000 was totally unsustainable given that it would require billions of $ from buyers to keep the price up.

Second bizarre thing he says:
"Mining centralization & decentralization will go in waves".
He compares mining to the evolution of computing from mainframes -> PCs -> phones connected to the cloud. When in reality the higher the price the more people are incentivized to make specialized ASICs. Its a one-way trajectory.

Here's where the China & mining discussion starts:
https://youtu.be/RIafZXRDH7w?t=18m08s

Its an eye opener that the Bitcoin Core developers seem to be so slow compared to whats going on here. It reinforces my view not to buy any Bitcoin until the block reward halving which is still a year away.

Speedy,  I hate to say it,  but this is why you are a bitshares holder.  Try to ignore the ridiculousness of bitcoin-centered thinking you hear. ..it will only frustrate you in its absurdity.
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