It adjusts itself based on the total hashpower of the network. Satoshi explains:

The difficulty regulates the cost so if profits increase substantially and more miners enter the network the difficulty increases. If expected profits drop and miners leave the network the difficulty decreases.

This makes bitcoin a perfectly suitable apollitical value target for central banks.

edit: I suppose he doesn't mention the difficulty can decrease

wiki:

Yes, the difficulty for a miner to be awarded the Bitcoin payoff goes down because of less competition. I mentioned this. But the difficulty in discovering the hash code number for validating a new block keeps going up.

Here's the problem. Suppose the volume of transactions goes up but the market price of Bitcoins goes down (say due to speculation). Then mining profits go down, the number of miners declines, and at some point there may not be enough miners to support the volume of Bitcoin transactions. I see no reason why the profit incentive for mining will always be enough to provide adequate mining support for the volume of Bitcoin transactions.


PairTheBoard

There is only one type of "difficulty" it is is the adjustment of (the expected value of the) computation required to find a valid hash. If there are many miners the "difficulty" increases not because there are more miners to compete with, but because the algorithm adjusts. If there are less miners the algorithm adjusts to be easier.

If bitcoin isn't deemed useful it gets easier to mine.

Note the quote from Satoshi, it is the brilliance of the solution-the network self regulates. The problem you see, is actually the problem he solved.

It doesn't. It has adjusted downwards before and can do so again. Test my assertion and see what you come up with.

I already quoted the wiki stating the difficulty can go down.

To get an idea how many bitcoins are mined every day just track in this link

https://www.coindesk.com/price/
the Supply 16,791,200 now at this level.

Check after a day or week and divide by hours that passed. I think it is 1 new block per 10 min (ie 12.6 bitcoin) so that gives you an idea of what is going to take to mine one on your own if you invested 10k on some mini farm. Just estimate how many exist out there trying based on the power they consume from previous bitcoin links i gave.

Now it is 16,791,263 so 5 blocks or 12.5*5 (lol what was that 12.6 above haha) each added in 30 min.

If its 300 MW by now (https://en.wikipedia.org/wiki/Bitcoin_network#Mining was 167MW in 2015 ) then you have 300*10^6*0.5*3600(half hour) /63 (~coins mined)=2381 kwh to mine 1btc or cost of $300-350 in energy (still need to calculate the cost to build the system of course but its probably not a severe cost) . Still very lucrative unless i miscalculated something here .

It means you need to spend on avg 2400 KwH before you get a coin. So if you have a 1KW system you need to have it work for 100 days to get 1 coin but since you get only 12.5 or none it means 12.5 btc (one win) per 3.5 years if you have invested only 1 kW system. If you can go to 5kW by installing solar in your home it will work eventually. (check the above for errors as i did it quickly to get an idea). Prepare to get a visit from authorities for manufacturing drugs or whatever likely if you started using so much electricity though without your own source lol.

It is a definite hedge idea to installing solar in your home though! It actually proves a good side benefit of doing it. See what i mean here? Imagine a coin idea designed that forces people for self interest to go into a direction that benefits the planet because it not only requires specific technologies and breakthroughs there but also rewards useful computational effort that then in a nonlinear feedback methods further propel the qualities of the currency to the stratosphere completely demolishing wasteful random design capitalism forever. This is how it has to be designed. An exponential plan.

The difficulty regulates the supply. A (core) dev just told me there is no correlation.

It is the purpose of the retargeting. If the total miner power doubled the amount of bitcoin's mined per unit of time would increase accordingly. Instead, the difficulty adjusts to account for the increased (or decreased) hashpower and this creates a roughly stable and predictable supply schedule.

It is not unlike gold which is effectively moderated by the cost of digging deeper.

Could we think of a way to design a better coin that everyone can compete for and more computing power doesn’t necessarily give an edge or much of an edge? I don’t know if it’s possible but it would be a way to use less energy to create the network and eliminate server farms or at least negate their advantage.

Perhaps the traveling salesman problem would be a unique way to attempt this, at the end of X amount of time whoever has the shortest route computed wins the coins and a new map is drawn to set the next competition. During the competitions each shortest route is listed by the user who submitted it and if a new shortest route it published that user is put at the top of the list until the timer expires.

This would give the ability to change the transaction times to a set amount rather than the current average of 10 minutes or whatever it is for bitcoin and the ilk. I’m just thinking of ways to get the average joe in the mining competitions again while reducing power consumption, if there even is a way.

The miners have complete control over the price per transaction. If they want to charge 10 bitcoins per transaction, they can. Or 100 bitcoins per transaction. Or 1 million bitcoins per transaction. They decide what to charge.

There is an upper limit to the number of transactions per hour. It doesn't matter how many transactions per hour the users would like to make.

If you had the best GPU, your one PC would be about 6 billion times slower than the current network hash, so you could expect to take 100,000 years to find the next block.

In your scenario above is that, at the current difficulty, you will take a very long time to solve a block. So the difficulty would never be able to adjust. This could be a problem if, say, the bitcoin price crashed to something like $1. So many miners would drop out that the next block could never be found. This would need to be fixed by a fork.

Ah I missed that. Yes if the volume of transactions goes up a pool off backed up transactions starts to fill and a fee market is created. Probably the pool that is filled today going now will never fully clear ever again. The higher the average fees the lower the net cost or higher the profitability.

More miners come online, and the difficulty adjusts to suit.

If for some reason (not really possible) bitcoin became rapidly unpopular and the price dropped hard (not really possible when you have a rising fee market miner's would leave the network and the difficulty would eventually adjust lower.

Isn't it comparable in a way to the problem of a players boycott? When good players leave a site the profitability raises and so an equilibrium is observed.

I don't understand what you're saying. It looks like that would mean there's an upper limit to transaction volume for Bitcoins. If so, it would limit Bitcoin's value as a transaction medium - unless the volume limit is something beyond that required for all transactions in the world being done in Bitcoin. If there is such a transaction volume limit, what is it?


PairTheBoard

I always read about 7 tx/s. This random article says 3.3

https://arstechnica.com/tech-policy/...-skyrocketing/

Its helpful for dialogue to share definitions and be accurate in order to explain/understand. People can correct me if they feel I am wrong.

The fee market doesn't destroy bitcoin's value or utility as a medium of exchange. But it doesn't hurt it as an everyday coffee type money. It might be more accurate to say it is not a good "currency" because it doesn't circulate. It is a good inflation hedge, or as it matures it will be. It is a good savings devices but perhaps at this stage not a good money.

It certainly will always be used for exchange of value, but will more and more so serve higher value players like large settlement banks. It is destined to serve those that mean to send the most amount of value. A high fee of $30 would make it unusable for average people, but sending millions or billions for $30 is a dream scenario for institutions that might do that.

This is also why speculation pushing bitcoin's value higher is not as significant as the entities that are pulling the price up because they are waiting for a large enough market cap so they can use the settlement capability.

Lightning network, layer 2 technology, will enable basically any division of micropayments.

Based on the sentences which followed your claim that you don't understand what was saying, I am convinced that you actually understood what I was saying and even the implications of what I was saying.

It is a ****ty transaction medium because it can handle about 7 transactions per second maximum worldwide and those transactions are made at exorbitant costs. It is also a ****ty store of value for that and some other reasons (such as it having absolutely no utility and it not being even remotely like a commodity in any way shape or form*).

*it is the same as a commodity only in the same way as you could say that ashes from a crematorium is a commodity. The cost of the energy to run a crematorium have absolutely nothing to do with the broad market value of the ashes. Seriously, try to sell Gram-Gram's ashes and see where that gets you.

**** that wasn't a footnote.

Apologies for slight derail but I'm quite new to this game and think this may be the best place to ask.

What's the best platform for trading crypto and/or other high-risk stocks? And why?

Xbox

The Xbox online platform? Why this in particular?

What's this all about? Aren't micropayment transactions limited to 7 per second? Aren't they subject to large fees as well?

Whether it's "intrinsic" or not, the only justification for Bitcoin value is its utility as a transaction medium. If transactions are limited to 7 per second (with high fees to boot) it has only extremely limited utility as a transaction medium and thus only a very low market price for bitcoins is justified. And with a very low market price for bitcoins, even its use being touted above as a medium for high value transactions is extremely limited.

So when will we know its the right time to short the hell out of these things?


PairTheBoard

PlayStation is also good.

Imagine that you had just asked me where you'd like to lose money playing blackjack. My answer is the same.

Don't user transactions pile up, waiting to be included in the blockchain by verification in new blocks by the miners? So if users are making transactions faster than the 7 per second limit, the unverified transactions must keep piling up, with longer and longer wait times before being included in the blockchain. Eventually, the vast bulk of transactions would all exist in limbo, outside the blockchain for maybe years or decades until the miners and the blockchain become basically irrelevant. Bitcoin's whole reason for being, blockchain security, would become pointless.


PairTheBoard

Yes

I just want to gamble with skill.

Some thoughts:

The transactions per second limitation seems solvable, if not by BTC then by the myriad of other coins out there. Correct me if I'm wrong. A diversified wallet of many different coins is essential at this point.

Interesting to see that Buffet was widely reported today with an exceptionally negative comment on DC value (and perhaps related the market lost 10%). Coins will go to zero, he said. I'm not investing in something I don't understand, he said. Surely he should have settled on the latter and left it at that. The intrinsic value in digital currency isn't easy to grasp, but at least make a damn attempt in your position of influence.

My wife bought me a book yesterday: The Business Blockchain - Mougayar, with a forward by Buterin. Would appreciate any opinions.

Here's the correction you seek: It is a solution in search of a problem. We had the transactions per second thing solved quite a while before bitcoin was spawned.

I'm pretty sure you can get greater diversification by owning any set of assets other than cryptocurrencies.

I already explained the "intrinsic value" of the coins. It is extremely easy to grasp: They have the same intrinsic market value as your gram-gram's ashes.

My opinion is that it appears that your wife buys you things that she thinks that you will like. She is probably a keeper.

sigh
not troll
semi troll
troll
troll

real opinions pls

Brian is taking the "stupid deserves to be responded by stupid" to Billy Bob Thornton levels. A man who almost brought Angelina Jolie to suicide.