20
votes
Accepted
Can bitcoin protocol be changed to add economic incentives to validating nodes?
I don't think it is possible. There are a few problems to incentivizing the operation of nodes.
When you pay people to run nodes, people running multiple nodes provide less value but earn more for ...
- 72.7k
6
votes
Accepted
Inheritance and Bitcoins
nlocktime transactions are probably the closest thing you have at a protocol level.
Essentially, you can make a signed transaction that pays a bunch of your relatives on January 1st 2016. If you ...
- 7,749
6
votes
Accepted
Will cryptocurrencies that have a finite supply (like 21m btc) cause deflation?
Yes, cryptocurrencies that have finite supply are bound to create deflation. This is because the same finite supply of coins will represent an increased economic output that results from technological ...
- 7,348
4
votes
If cryptocurrencies have no intrinsic value, how do they originate?
You seem to have a misunderstanding:
anyone could create an infinite quantity of their own cryptocurrency right now
This is not accurate. The breakthrough that enabled Bitcoin (and other ...
- 8,822
4
votes
Are bitcoins with more confirmations more valuable?
Not really. A 0.2 BTC "bitcoin"† with ten million confirmations has no more value than a 0.2 BTC "bitcoin" with one million confirmations.
The exception might be that a "...
- 25.2k
4
votes
Impact of mining technology on global bitcoin energy usage?
Your thought experiment gives you the correct answer: efficiency has nothing to do with energy usage. Once everyone gets the most efficient hardware, difficulty will adjust and you'll be getting the ...
- 1,014
3
votes
Can an altcoin be worth less than 1 satoshi (0.00000001 BTC)?
Can an altcoin be worth less than 1 satoshi (0.00000001 BTC)?
Yes
Is this a reasonable position?
No
- 6,708
3
votes
Halving reward, price effects?
Will Bitcoin switch to a faster block rhythm?
No, the Blockchain will not change the number of blocks produced. That would require the difficulty retargeting rules to be changed, but the difficulty ...
- 72.7k
3
votes
Why was 21 million picked as the number of bitcoins to be created?
42 is the Answer to Life, the Universe, and Everything.
Bitcoin block rewards are cut in half every 4 years. Half of 42 is 21.
Nearly every person can understand what x "million" means, but ...
- 1,410
3
votes
How to get paid providing full node services?
Presently, you cannot.
According to BitNodes, as of this writing there are over 5000 full nodes on the network, all of them providing this service for free. This certainly seems to be sufficient for ...
- 23k
3
votes
Should USD savers be concerned about the rising popularity of cryptocurrencies?
Considering that the US dollar has lost 90% of its purchasing power over the last 100 years you should be worried regardless of cryptocurrencies.
- 54
3
votes
How can loans work with bitcoin?
In Fiat Interest and Inflation cancel each other and promote borrowing and thats a healthy thing, but bitcoin economy a borrower has to fight against deflation and interest, if interest rate gets ...
- 18k
3
votes
Accepted
"stable-coins": A formal definition?
Lets tackle them one by one:
1) Is this definition true?
Not entirely. Stable coin need not be pegged only to fiat currencies. We can also peg a stable coin to exchange traded commodities like ...
- 7,348
3
votes
Who is paying for the running costs of Bitcoin?
The people operating the mining hardware do. Mining hardware consumes electricity, so people who run the hardware receive an electricity bill from their electricity provider. They pay the bill using ...
- 68.5k
3
votes
Who is paying for the running costs of Bitcoin?
Who is paying for the running costs of Bitcoin?
The primary costs are almost entirely paid by miners.
Anyone else who runs any other sort of node (wallet etc) is likely to be also contributing by ...
- 25.2k
3
votes
Can dust outputs become an economic problem?
"Dust" refers to UTXOs whose cost of spending is a significant portion of their total value. In Bitcoin Core's source code, "dust" specifically refers to UTXOs that are smaller ...
- 72.7k
3
votes
Can bitcoin protocol be changed to add economic incentives to validating nodes?
I think you've got your reasoning backwards. The reason we want more people to run nodes is because people only run nodes if they get value out of it, so more people running nodes means more people ...
- 51.4k
2
votes
Why is mining difficulty increasing?
A bit more info, the difficulty adjustment is a scripted algorithm in the Bitcoin core code. It runs after every 2016 blocks and compares the actual time it took to add those blocks with 20160 minutes ...
- 21
2
votes
Why are fiat Currencies inflationary and Bitcoin deflationary?
Fiat currencies are inflationary by design, so that people don't hoard currency. The more your money loses value every year, the less likely you are to keep it sitting in a bank. This availability of ...
- 21
2
votes
Why did Bitcoin first start to gain economic value?
TL;DR: It was not its creator who did that. Bitcoin's economic significance was gained similarly to any other money; but here, it started with pizza...
Let me answer by refuting the most persistently ...
- 121
2
votes
Will people not spending their Bitcoin cause Bitcoin to fail?
I beg to differ. If you go to https://blockchain.info/, and look at the 'latest transactions', you'll see numerous transactions taking place continuously. Also, there is a quite a bit of discussion ...
- 707
2
votes
Would free energy cause a market collapse?
Although this question might be "too broad" or "off-topic", I'll give you an answer and it's no.
By removing the cost of electricity, hardware expenditure becomes the ceiling for hashrates. Surely ...
- 5,596
2
votes
Bitcoin boom and bust - Inherent instability of Bitcoin
and they eventually generate Bitcoin faster than the market demands.
This assumption doesn't apply, unfortunately. The production rate of Bitcoin is self-regulating and does not correspond to the ...
- 72.7k
2
votes
Accepted
Why does bitcoin have a value?
Like any other asset that has a market price, it's all a matter of supply and demand.
The supply side is relatively trivial, the protocol allows for a fixed amount (25 bitcoins at the time of writing)...
- 831
2
votes
Accepted
Why bitcoin is not inflationary?
If one could simply "print more" Bitcoins, then it would quickly lose its value (this is the definition of inflation btw) because of increased supply. This is the main reason why, for instance, the ...
- 218
2
votes
Can an altcoin be worth less than 1 satoshi (0.00000001 BTC)?
Altcoin can be valued much lower than 1 satoshi. Sprouts is ranked 152 on Market Cap and 496 on 24 Hour Transaction. But its value is 8.027e-09 BTC as on 13th of September. It was valued higher and it ...
- 21
2
votes
Accepted
Will I double my money after a bitcoin hard fork?
No, it doesn't mean free money.
When a cryptocurrency forks into 2 separate cryptocurrencies, then the market sets the value for each.
Much of the value of Bitcoin is based on several things, such ...
- 10.9k
2
votes
Accepted
Should USD savers be concerned about the rising popularity of cryptocurrencies?
Let's compare the total size of circulating BTC to US dollars. According to coinmarketcap.com, the total value of all Bitcoin is 250 billion as measured in US dollars. Throw in Ethereum, Bitcoin Cash, ...
- 146
2
votes
Mining = Printing money
Is mining gold creating money? It's called mining because work goes into it. The money that comes out of it is remuneration. When the FED increases (er, eases) money into our system it's done by ...
- 189
2
votes
What is the advantage of a market-specific cryptocurrency?
Why is there more than one fast-food service? Why is there more than one internet browser? The competitive altcoin economy encourages other coins to surge with better implementations. Bitcoin has very ...
- 947
Only top scored, non community-wiki answers of a minimum length are eligible