16

When developing Bitcoin, Satoshi had already come with the idea that no more than 21 million of them will ever be made. However, there was an unsolved issue: how to accomodate all bitcoins in case it was actually used as a worldwide currency? Comparing to the current (2008?) world's M1 supply, it was determined that 8 decimal places was enough to cover the ...


15

A single Bitcoin is currently divisible up to 8 decimal places (giving you 21*10^14 units of money, or about 2.1 quadrillion units), nothing stops it from being divided further with small protocol change. In order to change the limit of Bitcoins created, one needs to change the protocol and force most of the Bitcoin network to adopt the change, which can be ...


15

Bitcoin is really a little strange because it doesn't know if it is a currency or a commodity. And this is why this question has many answers and is a popular item of discussion. If Bitcoin were just a commodity, the thing to do is to hoard it. There are lots of commodities that are almost totally hoarded. For example: emeralds or works of art. Now if ...


10

Your question is equivalent to asking, "Does SHA256d have a trapdoor?" SHA256d is a well studied algorithm. It's believed not to have a trapdoor. If the creator of bitcoin has a way to break SHA256d, stealing all our bitcoins would be the least of our worries.


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.


10

If you are running Bitcoin Core, you can see the total amount in circulation using the RPC call gettxoutsetinfo (in the Bitcoin-Qt debug console, or using bitcoin-cli if you run bitcoind). At the time of writing, the output is: { "height": 517245, ... "total_amount": 16965398.58586455 } which means there are currently ~17 million BTC in circulation. ...


9

Miners (who will no longer be mining, but will be validating transactions in the blockchain) will earn transaction fees. What those fees amount to or are to be interpreted as are hypothetical at this point, but might be imagined to be a transaction cost that ensures the security of the ledger.


8

Why do we mine? We need to all agree on who owns which coins. If your idea of who owns what is different than mine then how can we trade? To achieve this, the Bitcoin protocol keeps its ledger of all transactions in a series of blocks, with each block recording a collection of transactions. Since we don't have a central authority to declare which blocks ...


8

What you are describing there is a client that is a hybrid of Bitcoin and something else. For instance there is nothing to stop you starting ManishCoin and writing a ManishBitcoinSuperClient. If you can get enough people to believe in ManishCoin then it becomes a useful currency.


8

This is the announcement of Bitcoin: http://www.metzdowd.com/pipermail/cryptography/2009-January/014994.html Total circulation will be 21,000,000 coins. It'll be distributed to network nodes when they make blocks, with the amount cut in half every 4 years. first 4 years: 10,500,000 coins next 4 years: 5,250,000 coins next 4 years: 2,625,000 ...


8

EDA (Emergency Difficulty Adjustment): Median Time Past of the current block and the Median Time Past of 6 blocks before has to be greater than 12 hours. If so, it gets 20% easier to create proof of work. In other words, miners can find blocks 20% easier. Source: Jimmy Song As EDA is one way (difficulty down), miners abuse it. They stop mining, and ...


7

A short term increase in the gradient on the graph can be caused by a large and fast relative increase in hashing speed of the total network. Within a short time, the difficulty adjusts and prevents it having a substantial long term impact. The steep gradient on this difficulty graph between 13GH/s and around 20GH/s is an increase of around 50% in hashpower ...


7

The popular intuition is typically correct in well-saturated markets, but Bitcoin is not yet a well-saturated market. Though the supply of Bitcoin is currently increasing the demand is increasing dramatically faster. This is because we are during the initial adoption curve of a new technology and new demand is created as individuals discover the new tech. ...


6

It`s a geometric series with the base 1/2. After half of the remaining coins are mined, rate is decreased until half of remaining coins since the drop are mined. The rate is convergent, that is, it approaches a finite number and doesn't go on until infinity (like say, 1, 1/2, 1/3... 1/n would). This makes it so that there will never be more than certain ...


6

XRP are internally represented as an integer number of millionths of a ripple. No term has yet been accepted for naming these units, but some people have (I think jokingly) referred to them as "Jeds". Update: It looks like they will be officially referred to as drops as you suggested. A transaction costs 10 drops. There are a million drops in a ripple.


6

The new FinCEN regulations are quite clear that the term "create" includes currencies that people "obtain by their own computing or manufacturing effort". A final type of convertible virtual currency activity involves a de-centralized convertible virtual currency (1) that has no central repository and no single administrator, and (2) that persons may ...


6

As I understand it, this is by consensus, i.e. all the nodes in the network agree on this protocol. No. The network doesn't vote to change itself. Read this: What can an attacker with 51% of hash power do? Arguably, you could try to get a change to the bitcoin client implemented through astroturfing. Here's how you'd increase monetary inflation. Find this ...


6

There are 3 places where GetBlockValue is called. One is on incoming blocks, one is on blocks we're mining, and one is an error message. This is the one for incoming blocks: if (vtx[0].GetValueOut() > GetBlockValue(pindex->nHeight, nFees)) return state.DoS(100, error("ConnectBlock() : coinbase pays too much (actual=%"PRI64d" vs limit=%"PRI64d")", ...


5

Currently, only three-letter currencies that exist as IOUs can be created as a custom currency. And if someone else uses that same three-letter identifier for something else, each account can only transact in one of those conflicting currencies. So you could use "XBR" to mean people owe each other beers and you could use the ripple system to track how many ...


5

Some time in around year 2100, blocks will only be worth 0.00000001 BTC or less. But a long time before this, miners will earn their bitcoins by the transaction fee. And when blocks no longer can generate bitcoins, then the miners will earn their bitcoins only from the transaction fee (versus earning 99.99% from the fee). Miners can still generate blocks, ...


5

If the transaction fees from miners are not sufficient to maintain the security of the ledger, than the network will self-destruct. But, with the cap being so-far away (who knows how many years) by then computing power should be sufficient to ensure the sanctity of the network with very very minimal costs (low power costs), it wouldn't surprise me if bitcoin ...


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

The first transaction in every block is called the coinbase transaction, it is a special transaction that pays the miner their reward. This transaction adheres to different rules than the rest: it has no inputs, but has output(s). The coinbase transaction outputs are allowed to be equal to or less than the block subsidy (newly minted coins) + all ...


5

If you want the total amount of BTC created, you simply need to iterate through the coinbase transactions (first tx in every block) and add up the output. You will then need to subtract the transaction fees for that block to avoid double counting those. If you want a somewhat accurate money supply, you will need to do the above, and then also subtract any ...


4

Build in a reliable entropy function to take account of natural decrement in value over time. All value degrades in nature, and this is the fundamental problem with money in that it can be hoarded without cost. Not sure how this would be implemented, it does dig at the root of the basic theory of money and value but that is what we are attempting to achieve ...


4

Key points in bold. Hoarding doesn't need to be prevented. At least, not yet. See this answer for a solid argument: How does hoarding hurt Bitcoin? Bitcoin attracts hoarding by design. To change that would turn it into something else. As Bitcoin matures, I expect that it will remain a problem that speculative trading brings instability to the market, ...


4

GDP (and most other stats you would think to use for this) can't be accurately determined by the network without trusting someone. The network can only see the movement of BTC; it has no information about non-BTC currencies, goods, or services. For GDP, some centralized organization would need to figure out the the real amount of spending in the BTC economy. ...


4

Fiat currencies can only exist as debt. If you have them, and they're not in your physical possession, it can only mean that someone owes them to you. This is the same way it works outside the Ripple system. If you have $1,000, and you don't have physical bills, then someone (most likely your bank) owes you that $1,000. The Ripple system uses gateways whose ...


4

Not everybody needs to agree (that would probably never happen!) for there to be a change in the protocol (which would be needed to cause inflation), but it's not based on just a majority of hashpower either. It's really a vast majority of users that need to agree; if just 51% of users decided to change the protocol, it's entirely possible that it would ...


4

Basically, yes. But it doesn't have any dramatic effect and it's almost certainly over by now. When Bitcoin was first released, it was not generally known that it was possible to mine efficiently using GPUs (video cards). It's possible that the Bitcoin creators and early developers knew this and withheld the information, giving them a tremendous mining ...


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