With the billions I meant the current market-cap of Bitcoin alone. I think that about 500,000 coins are lost, and still 11,500,000 BTC in circulation. Makes: 11,5 ml x 750 USD = 8.6 billion. The BTC-network itself is about 7900 TeraHash. With an average price of 10 USD/GigaHash, it's about: 79 Million USD, which needs to be replaced each 6 months (in this crazy arms race). You cannot re-tool to all Crypto's. There are two groups, each with their own hardware, which cannot be re-tooled anymore (technically or economically) between the 2 groups, but can within a group: a) the SHA-256 crypto's. Like BTC, PPC, Namecoin. b) the Scrypt crypto's: Like Litecoin, feathercoin, and a huge number of copycats. For SHA-256 you need expensive ASIC-hardware. For Scrypt you need PC's with several GPU's from AMD. Professionals are on the ASIC's and BTC. Hope it helps.....
Thanks for your response. For the re-tooling, while what you say may be true for the actual mining process (reliant on specialized hardware towards the tail end that is heavily optimized for a particular hashing method), for the transaction networks themselves, it is not overly complex to accommodate multiple hashing methods (please correct me if I am wrong) and thus unlimited numbers of cryptocurrencies. This is what I meant, as the mining is a process where, given BTC's design, the majority of the coins are discovered early on in the process, so the other considerations, such as the infrastructure itself for using the coin, is far more relevant in the long run. Mining is important for early adopters/hoarders/speculators. The price itself is built purely on speculation, and there is still a discovery process going on with regard to the implications world-wide for BTC (and eventually, others) as a mechanism of commerce. Commodities either serve a practical purpose and/or are a store of value. Gold is inherently limited in that they ain't making any more of it (like land), but this is not the case with BTC. So, imo, BTC will need to rely on other use cases to remain valuable, and what you said about the infrastructure will become far more relevant in time, similar to how email is popular because of the widespread adoption. This is why I bring up the point about generically built infrastructure applicable to a variety of cryptocurrencies (not the actual mining process itself). And, in my view, the actual value of BTC if it is only seen as a commodity and not a currency, can be heavily argued in both directions, thus speculation will likely run wild going forward until the true value is ascertained. In short, BTC needs to provide unique value that cannot be easily copied, if it is not adopted as a currency. These responses on Quora are interesting to read, detailing that BTC, in the eyes of China, is seen as a commodity, instead of a currency. Thus, speculation will likely remain very wild for quite some time: http://www.quora.com/China/How-will...term-and-long-term-value/answer/Joseph-Wang-9 http://www.quora.com/China/What-is-...n-China/answer/Joseph-Wang-9?srid=FmS&share=1
While its true that another cryptocoin may come and dominate it, it would probably take a while for it to happen and you could get in early on it. Also yes there would probably be only 2 or 3 coins that would be relevant in the future. It may be bitcoin but you have to remember there are some flaws in the code that may never be possible to change which may lead to its demise. For example litecoin is just harder and more expensive to create an asic for it so less total mining domination by a few players, zerocoin leaves no paper trail so it may be more useful for hiding funds in offshore accounts. Either way it looks like the bitcoin infrastructure is being quickly built up and lets forget about the which coin will dominate and continue to look for reasons why cryptocoins will become mainstream. Since all coins that will become popular must essentially be decentralized and not backed by 1 organization that neans the starting market cap will be zero dollars so you can get in regardless and wait for the ride up. If you agree with the fact that cryptocoins will have a masive marketcap in the future, then just buy a stake in the top 3 coins and keep adjusting it if new coins come into the top 3. Aldo does anyone know if it is theoretically possible for everyone to agree to a source code change that will do a 10-1 split of bitcoins? I believe if price goes to 20 or 30,000 it may have negative implications as it would make each satoshi actually worth something making it hard to use for tiny transactions. I heard the source code will change the miners fee to something else rather than the current 0.0001 btc. This is good that the fee can be changed or it would cost a few dollars per transaction if btc were to cost 20,000 a coin. In order for market cap to reach 500 billion, each btc would have to be worth like 50,000 usd. Does anyone want to make comparisons between btc and gold because I see them as being very similar and a good reason why ppl may opt to hoard btc rather than gold due to its security and low storage costs.
Sure, but who is to say my coin is not going to be the established 3-4?? Look up Megacoin, where was it 8-10 months ago and where is it now, and a fat German lawless guy started (most likely) it...
A few million VC capital dollars??? Come on, new coins are being started on the fly, in bathrooms and basements. Of course I am exaggerating, but the point is, if I just want to make a copycat, that doesn't make much effort since the source code is open source.... It is really just willingness and a little programming resource and if you lack that you can always hire guys to do the work for you. I think what they are missing is distribution. If someone finally premines only a little (or a lot) and distributes most of it, there would be another good candidate for the madness.... Let's say a popular website with 1 million posters, there you go, immediately 1 million possible users. BTC has only 2-300K users right now... You mean like for CCs??? ------------------------ Prediction: In 5 years, no virtual coin will be worth more than $100. That is 2 zeros only...
Well, this crypto currency phenomenon has 3 faces: 1) a currency 2) a commodity 3) a protocol (as a decentralized P2P financial transaction network). And this makes it so hard to understand and grab. It's useful (and thereby valuable) is so many aspects. Currently BTC has more commodity aspects than that it is a currency, so China made a wise decision for now. I'm only 8 months in this crypto-world and still learning. But your question about: "are the 2 hashing methods interchangeable within the network" then answer is no I don't think so. But you can build currencies on-top of each other as an extra layer of features. That's what Zero-coin does as well as Mastercoin. And no: Gold is not really limited, as there is a huge quantity in sea-water. They only cannot mine it yet. BTC itself is limited for 100% by Math (as long as they don't change the protocol, which they won't). Other coins have their own fixed quantity limits. I don't agree with your quote: "Mining is important for early adopters/hoarders/speculators". Instead: Mining is important for a robust and safe network, Mining is an part of the protocol, Miners are essential to verify each and every transaction, that every coin is a real-coin and not double-spend. Miners are needed and they are rewarded with a lot of coins in the beginning, in time get less and less, but instead get more and more transaction fees when the coin matures.
Yes sure.... it takes a few PC's to corrupt it with a 51% attack... then you have a dead coin, worth nothing at all... You simply don't understand that you need HUGE computer power with thousands of Miners to create a stable and valuable coin. Please do your homework...
Practically speaking, there is a limit to the amount of mined gold, perhaps similar to BTC in and of itself, but point taken. Potential cryptocurrencies are unlimited, however, and was just trying to make the point that gold cannot be cloned as easily. Ok, this point makes sense from what I am reading now. I stand corrected. Practically speaking, what happens when there are very few coins left to mine? What will be the incentive to continue mining at that point, particularly at ever-increasing complexity? If this process is necessary for maintaining security of the transaction process, will there be an issue if mining drops off?
Why does a cryptocurrency need miners? To rain in the goldbugs! They only understand easy analogies... dumb as rocks.