A Bitcoin Transaction Takes Thousands of Times More Energy Than a Credit Card Swipe
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Yup, miners would set the fees but would compete with each other to solve blocks. Inevitably monopolies and cartels would form.
I don't think Satoshi had in mind the formation of huge server farms mining Bitcoin. But new disruptive technologies come up often enough to fill the void.
I don't think Satoshi had in mind the formation of huge server farms mining Bitcoin. But new disruptive technologies come up often enough to fill the void.
You never heard of Silk Road? It doesn't have to be heroin though, you can buy cheap medicine on the black market with bitcoin from other countries. Lots of lower class retired/uninsured people could do it...
As for traveling with large amount of money, bitcoin is still the best (see Chinese capital control for example), on a piece of paper you could carry literally millions.
And no I didn't confuse mining rewards. This is the calculation for cost, at least in times when bitcoin mining is not profitable (because the miner is forced to sell all the coins). When mining makes money for the miner, he can keep the extra coins for holding/hoarding purposes.
I was being facetious.
It's probably the hardest to trace. People are still being caught with large amounts of gold on planes though. Granny Smith can buy gold and carry it out but I doubt she'd know how to work Bitcoin.
Here are my calculations from https://blockchain.info/stats:
Fees for last 24 hours: 209.93255137 BTC
Transactions for last 24 hours: 260546
209.93255137 / 260546 = 0.0008 BTC / transaction * 1,237.62 USD = $0.997 / transaction
See, you assume miners only mine for fees. That is a huge miscalculation. Miners mine for coins, if they get fees too, even better.* If bitcoin was 80 bucks, pretty much all of the miners would go bankrupt, or very few could stay in the business of mining, specially on the mining fees alone. There is a mining equilibrium too: the higher the price of bitcoin, the more people can afford to mine, but all the fees and coins spread out among more people, bringing down the possible profits for everyone. Supply and demand as you said.
Now let's say my huge rigs can mine 1 coin per day and my cost of electricity, computers, storage rental,etc is $1000 a day. So as long as BTC is 1200 bucks, I can save 1/6 of a coin, because I think it is going higher. Even if it goes back to 1K, I gambled with house money, so to speak. Let's see what happens if price drops to $900. Suddenly I am losing 100 bucks a day, but I have coins saved, so for a while those extra coins saved from higher prices will reimburse my loses. Price doesn't move and I finally run out of those extra coins. Now I have to make a decision if I am going to close down my operation, because I could just buy coins on the market, and save 100 bucks a day. For a while I stay up, but price drops to $800, and now I am losing 200 bucks per day, and it doesn't look like price will recover. Not to mention I have a huge sunk cost of hundreds of computers that might or might not paid off yet...
The point is, miner fees don't pay for mining, bitcoin's high price does.
*"The transaction fees themselves don't add up to very much when compared to the actual block reward, usually."
http://bitcoin.stackexchange.com/questions/48587/btc-transaction-cost-vs-fees
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But let's take your 1 dollar fee per transaction. Isn't that still bigly high? You buy something for $5 and 20% of it is transaction cost.
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From the above link:
"The mining subsidy slowly fades away, however. Every 4 years, the amount of new bitcoins created in a block gets cut in half. At a certain point, either there will be more transactions paying fees, more fees in the same amount of transactions, or mining will become less expensive (or some combination of the three)."
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Bitcoin certainly has first-mover advantage. And because of that, most of the application work being done in this space is based on bitcoin. It seems like it will be hard to unseat it, but anything can happen. Suppose bitcoin wins the cryptocurrency war, does that necessarily mean it will be much higher in price? Is there a case where bitcoin wins the war, but its price becomes a fraction of where it is now?
I have just posted a scenario in the other thread where a large retailer issues its own crypto, taking away bitcoin's first mover's advantage, and adding a huge possible user base from day one. Government regulations can also effectively limit its usage to criminal activities.
Anything that can not be copyright protected and is cheap to produce will be copied and produced, thus keeping its value down. A new coin's production cost is pretty much zero in the beginning. Litecoin was made in a few hours by altering some of bitcoin's code. If one comes up with a couple of advanced features (what bitcoin badly needs), those are easier to implement in a new coin than trying to achieve agreement among bitcoiners.
There are many bitcoin-supporters who don't necessarily think bitcoin should be trying to achieve the same level of "spending-usage" as a CC or good ole' cash. It's nice to be able to spend on food, electronics, and other mundane stuff (lookup gyft.com), even if getting a discount most times, but it's really "not necessary".
Bitcoin (imho) should be used when the alternative method is "not ideal", such as when purchasing stuff anonymously, yea, darknet stuff, even clearnet sells things that you would not want to use a CC for, online gambling, money-transfer across continents because westernUnion fees are outrageous and bitcoin is instant, and most importantly, as a store of value (google Venezuela and bitcoin). Imagine, having the ability to have your own personal swiss-account and you don't have to rely on some bank's authorities which sometimes fail in their duty to protect your privacy when a powerful state demands their records be turned over.
But no one is going to change anyone's opinion on bitcoin. The good news is that there's a lot of volatility on the value of bitcoin and last time it was trading at this level $1,250/btc, it crashed all the way to less than $200/btc. Bitcoin-naysayers should be shorting big right about now.
Bitcoin (imho) should be used when the alternative method is "not ideal", such as when purchasing stuff anonymously, yea, darknet stuff, even clearnet sells things that you would not want to use a CC for, online gambling, money-transfer across continents because westernUnion fees are outrageous and bitcoin is instant, and most importantly, as a store of value (google Venezuela and bitcoin). Imagine, having the ability to have your own personal swiss-account and you don't have to rely on some bank's authorities which sometimes fail in their duty to protect your privacy when a powerful state demands their records be turned over.
But no one is going to change anyone's opinion on bitcoin. The good news is that there's a lot of volatility on the value of bitcoin and last time it was trading at this level $1,250/btc, it crashed all the way to less than $200/btc. Bitcoin-naysayers should be shorting big right about now.
Bitcoin Unlimited is trying very hard....
Yes, I cannot edit my post as it should be "There are some... not There are many on the first sentence".
Bitcoin is like being your own swiss bank, and having the ability to have as many swiss accounts in that bank. When you "spend" (transfer) bitcoin to someone else, you do so by signing a transaction with your private key and broadcasting it on the bitcoin network. On the traditional banking, this would be similar to the swift-network, I believe. It doesn't make sense to me to buy a can of coke using my swiss-account, even if I have the ability to do so.
Bitcoin is like gold, as it is a store of value. This is like a ponzi-scheme as some have pointed out that the value is based on the willing participants and not on intrinsic such as govt military, health of gdp, etc. Still, the market is currently saying 1 bitcoin is worth close to an ounce of gold. Same example, does it make sense to buy a stick of gum with a piece of gold, just because you can?