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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 ...
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  • 62.5k
12 votes
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What are some of the proposed ideas to why the Bitcoin dropped to sub $400 in the end of summer 2014?

Some possible reasons I read: Merchant adoption through payment processors While merchant adoption is growing, it is currently mostly through payment processors, hardly any merchants keep a ...
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  • 62.5k
10 votes

Who issues bitcoins and how?

the protocol allows a miner when he creates a block to send himself 25 BTC which do not have a proper source (input). that's how those 25 BTC are created, they're bitcoins that come from nowhere.
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8 votes

Is Bitcoin's Economic Majority those who already own coins or those who will buy or keep coins?

Each entity's weight in the economic majority is closely related to its ability to devalue the coins in the protocol version they are against. People (and their proxies) who are willing to offer ...
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6 votes
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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 ...
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  • 6,898
5 votes

Who issues bitcoins and how?

No one entity overseas the issuance of block rewards. This is one of several revolutionary concepts behind Bitcoin. (There is absolutely no Federal Reserve.) The Bitcoin Protocol and its distributed ...
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  • 2,917
5 votes
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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 ...
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  • 7,619
4 votes

How could a large owner of Bitcoin give back to the Bitcoin community in an equal way?

By destroying his coins ( sending them to an address noone has the private key for, like 1nnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn )
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4 votes
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Is there a way to make a crypto-currency stable by design? How?

There is a few problems with giving a crypto-currency a stable value algorithmically: Stability compared to what? The algorithm would have to be specifically pegged to either an asset, a currency, ...
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  • 62.5k
4 votes

What will be happen if 21 million of bitcoins become the property of one?

It's entirely up to the people living at this hypothetical future point. There's no current rule about what happens. Maybe when this happens, people are tired of Bitcoin, so they go back to trading ...
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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 ...
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  • 8,724
3 votes
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How efficient are bitcoin markets?

First, to clear things up, it isn't up to the exchange to quote a certain price/rate. It's all up to the users of that exchange what they ask/bid for a bitcoin. For example there are two exchanges, X ...
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  • 1,418
3 votes
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How are new bitcoins created without monetary inflation?

Bitcoins are created at a predetermined rate. Until this rate drops to 0 (around the year 2140), the supply of bitcoins is increasing. If this isn't offset by destroyed/lost coins and increased demand,...
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  • 4,327
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 ...
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3 votes

Are loans with enforced repayment possible on the blockchain?

What do you mean by "loans with interest"? If you mean guaranteeing being payed back the principal plus some interest that is not possible since that depends on the external world (i.e. it is ...
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  • 131
3 votes
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Are loans with enforced repayment possible on the blockchain?

Script is employed to encode the rules under which a Transaction Output may be spent. E.g. the most common Script requires just proof of control over an address. Thusly, scripts cannot determine ...
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  • 62.5k
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 ...
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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 ...
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  • 62.5k
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
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  • 6,532
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.
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  • 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 ...
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  • 17.2k
3 votes
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"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 ...
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  • 6,898
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 ...
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  • 60.6k
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 ...
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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 ...
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  • 62.5k
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 ...
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2 votes

Why was 21 million picked as the number of bitcoins to be created?

I suspect it has something to do with the M1 USD supply at the time Satoshi was developing Bitcoin. If you look at the decade prior to the white paper, inclusive of the quantitative easing period ...
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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 ...
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  • 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 ...
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  • 121
2 votes

What is the most reliable way to calculate the amount of fiat value that has been transferred into the bitcoin economy?

I'm pretty sure you'll never get an accurate number. I'm not even clear what you mean by transferred into the bitcoin economy. If I bought $100 worth of bitcoins 3 years ago, do we count that as $100 ...
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