[Cryptography] Another Bitcoin issue (maybe) (was: BitCoin bug reported)

[Jeffrey I Schiller]

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I?ve been playing with Bitcoin myself. When I first looked at it when
it came out, I was convinced it would not scale because of the ever
growing size of the blockchain (on my system it is currently around
20Gb). But then again, I though that .COM wouldn?t scale either. :-)

So disks are getting bigger and we are seeing ?light weight? wallets
(aka they depend on other peers instead of having their own copy of
the blockchain). I don?t believe this will be a long term problem.

However, I am concerned about mining and the diminishing
rewards. Today, as has been said here, a tremendous amount of mining
is going on. However the block reward is 25 BTC (~$15,000) so there is
real motivation to use hardware and really go all out to do mining.

However when the block rewards go away (years from now) it doesn?t
make sense to me to spend a lot of effort mining for the tiny
transaction fees. I know the theory is that the transaction fees will
motivate miners. Really?

Here is what I fear may happen. When the reward goes away, so will the
miners. So the protocol will adapt by reducing the work factor
required to create a block. At some point it will stabilize. But what
of all of that idle mining hardware? I wonder if someone could
purchase enough of it to capture the blockchain and have their way
with us? The security of Bitcoin is dependent on no one entity being
able to do more work then the rest of the network... but will this
remain a valid assumption?

- -Jeff


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