patnor1011
first let me say that you have already impressed me immensely with your selfless contribution to GRF by your IC thread alone, so please forgive me that I must strongly disagree with you on this one, not on the risk taking - decision making part, but on specifically Bitcoin being a great investment
but it is considering its performance in last 8 years or that anyone should consider getting in to the Bitcoin mining game at this point in time....
never said that, I merely pointed out that if anyone wants that it is still possible. I suggested that people should try altcoins mining.
then again I may just be misinformed, and your knowledge on subject is obviously superior, so if you don`t mind, could you educate me a bit?
I cant claim to have any vast or superior knowledge I am just offering my subjective observations based on that I was and I still am "in the game"
1. when using top tier specialized mining gear - what are average power consumption? for example kWh/BTC. What are average time spent to mine one BTC per one device?
there are quite few devices available and latest one is antminer s9 which does consume roughly 1300W. To get 1 btc with just 1 device will take quite a time at this moment. Google bitcoin mining calculator and play with numbers.
2. Do I understand correctly that for any transaction via BTC to be verified (accepted) the current blockchain must be solved by some miner and proven to be correct (excuse me if I am rambling in terminology - in laymans terms - for transaction to be complete some miner (or many miners together) somewhere must verify it?)?
correct, while it was easier and cheaper not so long ago due to increase of difficulty and rather dramatic increase of price cost in usd rose so it is no longer viable to send small transactions. There can be some alternative coin used for that but considering cost and time involved of transfering rather large amount of money bitcoin is far superior to any bank or money transaction service
3. To motivate miners to do their work and keep system going by mining (or verifying transactions) it genereates new BTC as reward, but to combat possible inflation each new BTC is much harder to mine?
I do not think inflation is the term. I would rather say that difficulty is being increased or lowered in relation to number of miners and devices coming online. It is designed to keep mining going at steady predetermined pace.
4. For system to have any integrity there must be many unrelated miners, all agreeing on current blockchains being correct?
correct
5. Irregardless on how many BTC are being transferred there is the same amount of work involved in proofing of transaction?
Nope.
If there is more transactions involved they are not included to current block if it is already full but go to next one. There is certain maximum block size and the more transactions the bigger block is until default maximum size is reached, all following transactions go to following block. That is why system got bit slower than it used to be and that is why there are talks about increasing block sizes. If there will be consensus reached within community then this will happen.
6. How many BTC transactions are happening in world currently on average (transactions per hour, amount of BTC changing hands per hour)?
I cant answer that but it can be found online, there are quite a lot of sites which offer that kind of data
7. What are current wait-times for a transaction to be completed/verified? Are there any projections for future wait-times if system grows? How does it compares cost-vise and time-vise to the traditional money circulation (bank transfer, paypal etc.)?
well at this moment time processing your transaction depend on amount of fee you agree to pay for it. basic minimum fee mean it will take longer until your transaction gets processed. Larger fee mean priority and speed. To transfer larger amount of money bitcoin is far superior to any bank out there be it itme-wise or cost-wise. There are alt coins which offer much faster and cheaper transaction than bitcoin
8. What happens when (not if) work of proving the transaction far outweighs value of BTC being awarded for said work? Is there any plan of action or consensus in BTC mining community on this question?
as far as I understand it and from what I observed mining is business nobody mine bitcoins for the sake of it but rather to make money. therefore miners behave like nomads and move on chasing fast money. that mean that if there is alt coin which offers better return for mining power some amount of miners switch to that coin. That result in some slowdown but it also result in difficulty decrease therefore coin gets more attractive to mine again. Quite large segment of miners simply move with the wind. If you follow recent development in bitcoin community there are talks already in implementing some changes to address any possible future problems but due to bitcoin being decentralized it simply take more time to reach consensus or majority to define new path. Most obvious case was recent hard fork where few big miners attempted to implement what they thought is the best and result was creation of bitcoin cash altcoin. I am not going to mention other hard forks. Btc cash and all subsequent forks were just attempts of plain money grab - attempts to take away some of bitcoin value in my opinion. They suited mostly creators and did not added much for community or to make it all better for majority. BTC cash was totally miner focused hard fork
9. What happens when due to diminishing returns of mining there is concentration of mining power in few mayor players, say mining farms in politically sensitive regions like China or Russia - does that not threaten system integrity?
I do not think so. Most of the mining is already concentrated in china. BTC is decentralized in a sense that every full node carry ledger of all transactions so there is very little chance that system would be compromised by single player or single country. It may create some temporary problems but they can be solved as it already happened few times. Price is volatile and suspect to stuff like that but as it grows any problem encountered causes smaller ripples in a pond.
10. What happens if there is a disagreement on blockchain integrity, must every user check for solution themselves (as I understand it is much quicker and easier to check that chain is correct than to solve for a new one, but still...)?
Well that happens and it is dealt with quite seamlessly. Sometimes you mine on a block which gets orphaned that mean miner will not get the reward and any transaction included in that block get reversed. No big deal.
11. What happens if, due to a lack of miners, wait times surpass threshold to be useful in daily transactions or there is cost-of-transaction implemented that is greater than traditional money transfer costs?
I do believe bitcoin foundation already work on solution but due to number of people and entities involved it will take some time till consensus and decision are reached. I would say that there is big incentive never to prevent something like that to happen.
12. Do you really think that a system of exchange of values (currency) can exist on global scale in our civilized world where there is no way of accountability? I mean there is cash, of course, but most civilized nations in the world regulate cash deals very strictly, and with very good reasons. So basically, what happens if by some miracle BTC is officially universaly recognized and must come in to the fold of global economy, who is accountable, who can prevent or investigate criminal transactions, or even more prosaic, how are taxation implemented?
But there is accountability, it is called blockchain and it is a bulletproof solution to eradicate manipulation, fraud and many other problems which plague banking sector. It being slowly regulated and taxation is no issue here as you are required by law to declare income yourself. Try not to do it but it will be you who will suffer consequences. Investigating criminal transactions is also not that unthinkable we all seen succesfull prosecution of criminals using crypto's quite often. Same is happening with traditional banking. Some cases are harder to solve but it is happening. I know that there are stories in news about how criminals or North Koreans do use bitcoin and how bad it is but that is rather funny considering that number one choice of currency used in illicit trade by criminals and for all other nefarious purposes is still us dollar. It is still all the big banks who launder most of the money gained by criminals and not some crypto exchange.
Also I must strongly disagree that BTC is or can be used for store of value, I would bet that >90% of current BTC owners are treating it as short term investment hoping to cash in on price changes, it makes the global BTC market very very unstable...
I dont know. Why would they not cashed in whet it went from cents to 1000$? 4000? 10000? 20000? I would not say they are in for short term. Quite the opposite.
For Bitcoin to have any inherent value besides the speculative hype there must be some usefulness it offers to the world, a greater good if you will. It would be the case if BTC could become the one main cryptocurrency of the future, but as it stands, I just don`t see it happening. I mean, yes, it was the first (major) one, it basically introduced the world to the technology of blockchain and to the idea of cryptocurrency. But do you really mean to tell me that the old man Satoshi made it perfect in every way on his first try, and that there is no room for improvement? How long till there comes along some better-designed one, one that really can enter our daily lives, easing money circulation as we know it. I bet there is a lot of very bright minds working on it this very moment, and I would be very suprised if there already wouldn`t be plans made for a block-Dollar or chain-Euro; That is for shure, technology is here to stay, and we will use it one way or other, but I for one just can`t see BTC being around for much longer with all of it`s inherent flaws... and when
any other cryptocurrency starts gaining significant ground - BTC will crash and burn, there is no value to it, it is just how the phenomenon of currency works...
Well I have no idea. The way I see it btc will be something like gold standard exactly because it was first. Of course, there are better functioning alternatives out there even right now but it is hard to see people abandoning gold simply because silver is more useful. People used gold for millennia and still refuse to abandon it. As for bitcoin flaws there is bitcoin foundation which works slowly but it is there exactly to find a way to make it better.
tl;dr:
BitCoin, cryptocurrency, dollar, euro, any of the currency has no inherent value at all, just ask any German in 1923 or any Zimbabwean in 2008; Money (currency) by it self is no more valuable than paper that it is printed on... So recognize Bitcoin for what it is = it is a tool (just like any currency) for exchanging values, if it is the best tool (best designed) for the job, then it is here to stay and there is a chance that BTC will hold some of their value, BUT if there is
any room for improvement, well lets just hope that there is some gold to e-scrap in them antminers
I am in it exactly for that reason. The value. Why not to get some if there is still chance or time to have it? Do not we do exactly the same with everything? Working for money, collecting stuff, buying stuff to sell it higher... And at the end of the day it helps gold bugs too as antminers and similar machines get outdated pretty regularly so that gold from them will be there for grabs too