Please help me understanding the maths behind Bitcoin, what am I missing?
31 sats \ 7 comments \ @n3bul4 17 Nov 2022 bitcoin
Is it possible that what could bring down bitcoin is not a 51% attack, regulations, or hostile states, and not environmental concerns or anything else but instead pure maths?
What if, as it is happening today, at any point in the future the price of bitcoin is too low to keep miners alive (financially)? Is this the point of no return? Can the Bitcoin network survive without miners?
Yes, CPU power increases over time. Energy price might be much lower in the future, and generally, costs should go down while Bitcoin price (should) goes up. But are we sure the maths behind Satoshi's "formula" is robust for the next 100+ years?
Please help me to understand. Thanks.
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125 sats \ 4 replies \ @Scroogey 17 Nov 2022
If the price sinks, some miners will stop mining. Not all of them at once, but some of those with higher energy costs. Now the revenue is shared among fewer miners, and those that remain become (barely) profitable again.
It's a self-correcting balance.
If the price falls, less energy is used to secure the network. But there will be miners, and they will profit.
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21 sats \ 0 replies \ @Hermit 17 Nov 2022
And with some miners stop mining the difficulty of the algorithm will decrease requiring even less energy.
Well said. Self-Correcting Balance. So beautiful.
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11 sats \ 2 replies \ @n3bul4 OP 17 Nov 2022
Thank you for the explanation.
Why if the price falls, less energy is used to secure the network?
Don't miners still need increasing power in relation to the increasing mining difficulty regardless of the number of miners in the network?
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21 sats \ 1 reply \ @Scroogey 17 Nov 2022
If price falls and some miners stop mining, the hash rate sinks. This causes the difficulty to adjust down, so the lower hash rate still produces one block every ten minutes on average.
Now less energy is used to secure the network, because some miners' gear is turned off.
When the price increases, hash rate and difficulty increase. When the price decreases, hash rate and difficulty decrease. Until equilibrium is reached again.
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1 sat \ 0 replies \ @n3bul4 OP 17 Nov 2022
I see, this makes perfect sense. Thank you so much for the explanation.
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21 sats \ 0 replies \ @sommerfeld 17 Nov 2022
But are we sure the maths behind Satoshi's "formula" is robust for the next 100+ years?
The truth is we are not. The ones who say they are sure are either lying or don't really understand it.
Although we are not sure, there is a high degree of confidence that it will work in the future.
To paraphrase Half Finney:
Every day that goes by and Bitcoin hasn't collapsed due to legal or technical problems, that brings new information to the market. It increases the chance of Bitcoin's eventual success [...]
This can also be seen as a manifestation of the Lindy Effect.
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0 sats \ 0 replies \ @01xCc 17 Nov 2022
просто тебе следует иметь 1 сатоши в личном кошельке который не смогут утебя отобрать. держи его и ты многое поймешь пока будешь его держать! просто сама мысль идет медленно! но она обязательно прийдет ,
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