Quote:
Originally Posted by Wayne 962
Right - sorry, I didn't mean to simplify the cost of mining, although to most people they don't know what's involved. I guess in some ways, the analogies to actual physical gold mining are similar. In the "old days", when the gold veins were near the surface, one might have thought that mining gold was easier than today. Today's gold veins are further down in the Earth and harder to reach (I imagine). However, the mining equipment has gotten more advanced so that you can mine more gold for less investment in equipment. Pretty close to the Bitcoin formula.
I think perhaps from a climate change and energy usage perspective, once someone who actually knows anything or has any power to do anything in politics realizes all of the energy being wasted on mining Bitcoin (and other crypto currencies), there will be some type of legislation put in place to stop their use.
But Chris, I think you agree it's on a path to get more and more expensive and at some point, the system will fall apart?
-Wayne
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Good analogy and I agree with your correlation to gold mining.
That said, the result of the increasing complexity and cost of mining would be limiting the total amount available. Compared to fiat currency where you can print more, and it devalues it when you do, once the cost of mining becomes untenable, you’ve set the maximum available until tech improves.
Shouldnt Limited supply of new coins lead to increased valuation rather than a crash?
It could crash though.... just like the dollar, if we all lose faith in its value.
We get two things out of this though. Blockchain (which has great implications to data lineage and traceability) and compute efficiency.