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Wikipedia (Gold): A total of 174,100 tonnes of gold have been mined in human history, according to GFMS as of 2012.2 This is roughly equivalent to 5.6 billion troy ounces or, in terms of volume, about 9261 m3, or a cube 21.0 m on a side. Since Bitcoin is often compared to gold, the total number of bitcoins matches the total amount of gold mined in human ...


12

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 significant portion of their bitcoin earnings. With the broader selection of things to spend bitcoins on, more people are shopping with bitcoins, yet, not necessarily ...


10

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.


7

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 goods or services (including traditional currencies) for Bitcoin can refuse to accept coins of the "wrong" protocol, while people who hold bitcoins can sell coins ...


5

I'm going to answer your questions directly although I know you've selected another answer. It's for all those who come across this question. How do we know that the algorithm cannot be modified to gain control over the expansion of the monetary base? These are part of the config settings of the Bitcoin protocol. It can be changed but all you would be ...


5

The mining difficulty directly reflects the amount of computing power that the Bitcoin network has. This is adjusted on a periodic basis so that the average block solution time is 10 minutes (Bitcoin clients recalculate the difficulty every 2016 blocks). The difficulty can go up or down depending on how much effort people are putting into mining. More ...


5

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 blockchain consensus mechanism is what effectively awards miners solving a very difficult hashing puzzle. The solution block groups a number of transactions ...


5

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 should die before then, the transaction goes through and they get their inheritance. If you are alive on December 31 2015, you would publish another transaction ...


5

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 innovations. Thus the value of a coin is worth more tomorrow than today thereby increasing its purchasing power. However, if this deflation is bad is highly ...


4

Some problems that come to mind with the fiat banking system are: Transactions are never really "final" (unless you use cash) since banks or credit cards can "charge back" or "reverse" them at any future time simply because they take the side of your counter-party, often without even listening to your side The justice system can take your money at any time. ...


4

Once upon a time someone used Bitcoin's ability to embed arbitrary text inside a transaction to put an ASCII Art Ben Bernanke into the blockchain. Referring to the fact that current blocks must still reference the Bernanke block as a "dependency" rounds out the joke.


4

The Chinese are intense savers and frugal. Their interest in Bitcoin will involve relatively small price corrections. Do you want to say the will be resistent to price drops (in the bubbles for example)? Yes. Bubbles will still happen, but the correction would be less severe because Chinese investors tend to buy-and-hold through the ups and ...


4

I like this question1 - we don't get many big picture questions. How could Bitcoin change the world? A mature digital cryptocurrency could reduce trade barriers and thus increase the rate of productivity dispersion throughout society. As money is a form of fungible authenticated information2, non-proprietary digital money gets to take advantage of the ...


4

Since the "ownership" of bitcoins is essentially tied to having knowledge of the private key for the address they are stored against, it's very difficult to prove that nobody knows the private key. However, it is possible to send bitcoins to an address with no private key, essentially destroying them. Details here: How to generate a valid bitcoin address ...


4

This is a tough question. I'd consider Bitcoin as being just deflationary. Why? Because, instead of thinking about mining as "adding new currency", you could consider that mining is just "enabling" more coins each block from the 21 million total coins. Everyone knows that ultimately there will be 21 million coins, just not all of them are spendable. ...


4

No. And that would be even more confusing. You would have to synchronize the split, and for historical prices you would need to know if they were old BTC or BTC after first split, second split etc... Just use mBTC, uBTC, satoshi, or even fractions of the smallest unit if need be.


4

When building consensus how much traffic and their equivalent of orphan blocks are accumulated? Once a consensus round starts, the amount of information that needs to be distributed is fixed, since new transactions cannot be introduced. If there's no reason a transaction shouldn't be included, then almost all honest nodes will ask that it be included. If ...


4

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, or some kind of calculated wealth index. But, if it were stable in comparison to e.g. the USD, it would not be stable in comparison to other currencies, or a ...


4

By destroying his coins ( sending them to an address noone has the private key for, like 1nnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnnn )


4

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 seashells. Or maybe when this happens, there's something better than Bitcoin available, so they all switch to that. Or maybe they just restart Bitcoin and ...


4

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 cryptocurrencies) was the ability to make a digital asset scarce without trusting a central authority. In the past, currencies (digital and otherwise) have required an ...


3

Is it correct? Does it mean that bitcoin has burnt some billions of dollar worth of resources? Yes, though I don't think the amount is in the billions yet. Likely hundreds of millions of dollars have gone into electricity and ASICs just to keep the Bitcoin network secure. Did someone address this economical and ethical problem? Bitcoins are currently ...


3

So first of all, 'anti-economical' is not a proper word and doesn't have a clear definition. But I'll try to answer the question: 1) It is true that in a perfect market for mining, the cost of mining should be equal to the mining revenues generated. But think of it: For most of bitcoin's history they weren't worth very much so even if at the time people ...


3

It hasn't been tried yet At this point to the best of my knowledge there is no crypto currency that uses either expiration of transaction outputs or expiration of addresses. Therefore there are no experimental results available to observe expiration's effect on velocity. It wouldn't affect velocity However, one might argue that any sensible period of ...


3

As Bitcoin is a digital-specie currency, if it replaced all fiat currencies it would be the equivalent of reverting to a (digital) gold standard and can be answered in much the same way. Firstly, a gold standard is deflationary. Explaining this again and again is tedious, so I'll summarise: People provide goods or services to others and receive IOUs for ...


3

This is a great question and it's something I spend a lot of time thinking about. In general, I'd say no one really knows at this point and it is difficult to make more than a few guesses. So let me have a try at that: Banks would lose much of their ability to control the monetary supply, interest rates and exchange rate. The financial sector would shrink ...


3

You should check this related question. In summary: 1) A "lost bitcoin" is any unspent BTC balance in an account for which the private key has been lost. Without the private key, that balance cannot be spent again. If you lose your wallet file, you are effectively losing all the private keys for the accounts (addresses) created by that wallet. It doesn't ...


3

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, some amount of inflation will occur. However, I'd expect the inflation rate to be low (if positive at all), and getting lower. Once all ~21 million bitcoins ...


3

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 and Y, with both have an ask one 500 USD and a bid on 400 USD. Then person A bids a higher price, lets say 470 (instead of 400), on exchange X. Person B asks a ...


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