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Article linked in the OP was pretty cool, went through a lot of reasons why bitcoin is hosed but the best of them are:
Can't say I'll miss it, given how fantastically wasteful the bitcoin mining system is in terms of energy. From Wikipedia: quote:As of 2015, even if all miners used energy efficient processors, the combined electricity consumption would be 1.46 terawatt-hours per year—equal to the consumption of about 135,000 American homes.
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Jan 18, 2016 08:23
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GrimGypsy posted:I think I know the answer to this, but is there any way for them to hit some giant reset button to revert back to a time when mining didn't require a small nation's electricity supply and an investment suitable to open your own restaurant? Not really. The issue with bitcoin mining is that it works kind of like a lottery. There's a "prize" -- currently 25 newly-minted bitcoins -- for every new block of transactions that gets created and added to the central record chain. All transaction fees in the block also go to the miner who created the block. Blocks aren't actually that hard to create in terms of processing power, but before a block can be submitted the miner has to find a magic number that results in a specific value when hashed together with the block. The difficulty of finding this magic number is periodically adjusted to keep the creation of blocks -- and the mining of new coins -- at a rate of about one every ten minutes. If there are, say, ten thousand mining GPUs on the network, difficulty is adjusted automatically to ensure that on average one of these mining GPUs will create a block and claim the reward every ten minutes, so every GPU has a one-ten-thousandth chance of getting the 25 BTC. If some insane man fires up a gigantic mining rig capable of doing the work of 90,000 GPUs on its own, new blocks will be created much faster, but the network will soon raise the difficulty of creating blocks to bring the rate back down to one every ten minutes. This means that everybody except the insane man with the giant mining rig is suddenly getting new bitcoins a tenth as often. The more expensive bitcoins get, the more people are attracted to the prospect of making big bucks by putting up a huge datacenter and filling it with mining rigs, and the more difficult bitcoin mining becomes -- until the chances an individual miner has of ever mining any bitcoins are basically nil. This has already happened. The article linked in the OP mentioned that 95% of bitcoin mining is controlled by a group of people that looks like this:  Everybody else is poo poo out of luck. The only reason these people are mining bitcoins so aggressively is that each new set of 25 BTC can be sold for $10,000-ish. Mining difficulty will only go down once the price of bitcoin lowers to the point that it's not worth it to mine them anymore.
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Jan 18, 2016 18:49
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