Comments on: Not just Bitcoin: How will multiple digital currencies compete, succeed, and fail?

By: mikeriddell62

mikeriddell62 — Thu, 12 Dec 2013 14:14:00 +0000

I believe there is room for a social currency – one that is earned into existence – through community – for acts of good citizenship.

By: Ross Dawson

Ross Dawson — Sun, 01 Dec 2013 22:51:00 +0000

In reply to Ben Miller.

Hi Ben,

The mining and hosting are separate functions, in my understanding. At the moment every user stores the public blockchain. This is getting overly large, but there are viable ways to reduce its size. Processing power per se is not needed to allow the Bitcoin system to function, just storage and connectivity.

There’s a decent piece in this week’s The Economist on some of these issues. https://www.economist.com/news/technology-quarterly/21590766-virtual-currency-it-mathematically-elegant-increasingly-popular-and-highly The nub of it is that the system will need to evolve to continue functioning, but it has mechanisms to do so.

By: Ben Miller

Ben Miller — Sat, 30 Nov 2013 22:19:00 +0000

Hi Ross, interesting piece.

In my understanding, Bitcoin miners are hosting the computer power necessary to maintain the central ledger and associated transactions, and in return, they unlock new bitcoins every now and again (at a decreasing rate).

If this is so (i.e. hosting bitcoin relies on distributed server power), what will happen when there are no further bitcoins to be mined? Assume for argument’s sake that this currency has become very popular – driving the need for increased computer power to maintain the system – will miners be willing to host when there are no longer any incentives to do so?

It seems to me that the system of incentives is set up to go “in the wrong direction”, which if true would surely be a huge flaw. What do you think?

Ben