Skip to main content
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 ...
Murch's user avatar
  • 76k
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 ...
Ugam Kamat's user avatar
  • 7,417
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 ...
Jestin's user avatar
  • 8,812
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 "...
RedGrittyBrick's user avatar
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 ...
bca-0353f40e's user avatar
  • 1,045
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.
Emil R's user avatar
  • 54
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
amaclin's user avatar
  • 6,780
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 ...
Jonathan Cross's user avatar
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 ...
chytrik's user avatar
  • 18.3k
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 ...
Ugam Kamat's user avatar
  • 7,417
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 ...
Ava Chow's user avatar
  • 70.9k
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 ...
RedGrittyBrick's user avatar
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 ...
Murch's user avatar
  • 76k
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 ...
David Schwartz's user avatar
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 ...
m1xolyd1an's user avatar
  • 5,666
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 ...
Murch's user avatar
  • 76k
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 ...
DO'R's user avatar
  • 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 ...
filtercoffee's user avatar
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 ...
Sz.'s user avatar
  • 121
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 ...
Martin Wickman's user avatar
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 ...
hapx101's user avatar
  • 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 ...
Highly Irregular's user avatar
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, ...
user79126's user avatar
  • 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 ...
Brannon's user avatar
  • 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 ...
Cedric Martens's user avatar
2 votes
Accepted

What is the advantage of a market-specific cryptocurrency?

Consumers have little need for vendor-specific coins I am not an economist, but a lot of vendor-specific crypto sounds like Trading Stamps, Coupons, or maybe even Company Scrip. These might be ...
GlenPeterson's user avatar
2 votes

Where exactly is the scarcity?

Units are arbitrary, as your illustrated with the gold example. Scarcity is not about how much there is of something. It's about how much there won't be of something. Let me paint another example. ...
Paul's user avatar
  • 301
2 votes

Is the 51% attack the only technical reason no country will adopt Bitcoin as a state currency?

If what you mean by adopt bitcoin as a state currency means replace their existing fiat currency; I believe there would a lot bigger problems to consider. If they did do that, it would essentially be ...
Matthew Cruz's user avatar
2 votes

What is the incentive to use bitcoin due to transaction fees?

There are two scenarios we could see as the block subsidy (inflation) halves every ~4 years: The number of fee-paying transactions increase per block whilst median next-block fee remains low/...
TGollowitsch's user avatar
2 votes

Who is the target audience?

This is probably going to be closed as a question of opinion, but here is an answer nonetheless: But if you can not change the total volume of the money, you can not get a stable currency... In ...
chytrik's user avatar
  • 18.3k

Only top scored, non community-wiki answers of a minimum length are eligible