who pays for the cryptocurrency infrastructure, servers, support and power and so on
With all the new coins being created what puts a limit on the number of different coins that can be created?
This is currently a big problem with Bitcoin, because the fee for processing a transaction is ridiculous.
According to https://bitcoinfees.info/ you are looking at about $4.00 USD - that's regardless of the value you transfer, so if you pay $3.50 USD worth of bitcoin for a cup of coffee, you have to add on about $4.00 if you want that payment to go through within about an hour.
Clearly this is an untenable situation, and there are ideas for solving it, but... the solutions all at least erode some raison-d'etre of bitcoin I think it would be fair to say.With all the new coins being created what puts a limit on the number of different coins that can be created?
Natural selection, survival of the fittest.
What is behind Bitcoin? Behind most world currencies there is something of value. Gold in some cases, 'full faith and credit' in others. But there is something supporting the currency. Bitcoin has nothing except a volatile exchange rate.
So the operational costs of the infrastructure is not paid in the currency of that infrastructure. Interesting.
Wouldn't that then mean the transaction fee would be a security risk insofar as anonymity goes. Unless you paid cash of course. Can you do that?
I still think cryptocurrency is the preferred currency of seedy underworld activity like drugs, child porn and tax evasion all of which will eventually lead to government intervention. As we saw with China a month or two back. Cryptocurrency is very exposed to such intervention.
Along with everything I don't understand about it, what prevents that from happening? Apart from inertia due to lack of public outcry.
So the operational costs of the infrastructure is not paid in the currency of that infrastructure. Interesting.
I'd love to hear from those who have had a more experience than I do with Crypto, what lessons have you learnt so far?
1) Buy and HOLD.
2) Don't panic and sell on the dips, just use it as an opportunity to buy more.
3) Serious money can be made day/week/month trading the fluctuations. Buy on dips, sell on high, don't panic if it keeps dipping, but more.
4) If doing 3) then you stand to gain more percentage swings with the altcoins.
Sounds like a poor man's (in metaphor only) stock market where you don't actually invest into anything. Just ride the mystical Bitcoin wave.
Maybe this painting needs to be updated to include crypto-coins:
https://upload.wikimedia.org/wikipedia/commons/c/c6/Flora%27s_Malle-wagen_van_Hendrik_Pot_1640.jpg
Wagon of Fools by Hendrik Gerritsz Pot, 1637. Followed by Haarlem weavers who have abandoned their looms, blown by the wind and flying a flag emblazoned with tulips, Flora, goddess of flowers, her arms laden with tulips, rides to their destruction in the sea along with tipplers, money changers and the two-faced goddess Fortuna.
It is nominated in USD because, as stated above, USD is the current, most common trade currency in the world. In the past, it used to be the British pound, in the future, who knows? There are efforts made by some countries to establish a different reserve currency.
If CPU/GPU/ASICS catch up, the hashes can and do, grow more complex. Also, define no effort, there is no such thing as a free launch, and compare it with the cost of 'printing' a dollar (hint: There is no paper involved).
There are a few cryptocurrencies where the (main) proof of work does other useful work, such as Curecoin/Foldingcoin finding cures for cancer. Just imagine if there was actual motivation to make ASICs that cure cancer. (Albeit, from my understanding, the work involved is such that an ASIC would not have that much advantage over GPUs.)
At this stage the value of a bitcoin is largely dependent on the existence of someone willing to pay more. Why did it drop so much yesterday in just 3 hours? Why will the others match the growth that bitcoin has? I don't have any idea.
IIRC it bitcoin keeps on increasing the number of zeros a hash must have, making it exponentially harder to mine them. I think it is every four years that this happens.
One thing is for sure. This totally explains why we didn't come up with this like today in the 90s or 2000s. Imagine running things on linear PSUs or incandescents. Also everything was much slower back then as well.
Decreases don't happen a lot so far. But if a significant number of miners decide that it's not worth it -- that they're spending more on hardware and electricity than they are earning in bitcoin rewards -- and drop out, then the difficulty level will be decreased.
Bitcoin is a form of cash.
If it is to, one day, take over the role currently occupied by cash
[snippity, snip, snip]
Of course some people only hold it for a day. Others stuff it under their mattress for years. But you can calculate the amount of things that are bought using cash in a day and the amount of cash that is in circulation, and it turns out that the the latter is about seven times bigger than the former.
...
Given that there is a hard limit on the number of bitcoins that can ever be produced, the only way the total value of bitcoin can expand to accommodate growing usage is by the value of each bitcoin increasing.
...
One thing is for sure. This totally explains why we didn't come up with this like today in the 90s or 2000s. Imagine running things on linear PSUs or incandescents. Also everything was much slower back then as well.
Nothing to do with computer speed. If computers were slower then the bitcoin network would automatically lower the hash difficulty level. Bitcoin would have worked fine with Apple ]['s, if the internet existed.
The big reason bitcoin could not happen until at least 1995 or 2000 (and git too) is that earlier hash functions such as MD4 (1990) and MD5 (1992) were too rubbish to be trusted to not ever produce collisions, and not be reversable.
Don't even talk about the hash functions we had in 1980...
Dave's advice above to accumulate Bitcoin may pan out. But it is a pure speculation play at this point - you're picking red or black on a roulette wheel.
Dave's advice above to accumulate Bitcoin may pan out. But it is a pure speculation play at this point - you're picking red or black on a roulette wheel.
I was not speculating.
... if you want to be into crypto, then you have two options:
1) Buy and hold for the long term.
or
2) Day trade the volatility