[Cryptography] What has Bitcoin achieved?

James A. Donald jamesd at echeque.com
Mon Jun 23 18:21:18 EDT 2014


On 2014-06-21 00:31, ianG wrote:
> On 20/06/2014 06:37 am, James A. Donald wrote:
>> On 2014-06-06 21:19, ianG wrote:
>>> Bitcoin payments are hugely expensive, it's just that the payer doesn't
>>> pay that price.  Instead, it's spread across the buyer's fee and an
>>> inflation tax.  If the system were static, the fees would amount to
>>> maybe $30-60, about the same as banks internationally.  Part of the
>>> problem is that the mining rewards are incentivised upwards, a race to
>>> the most expensive.  When the mining rewards stop there will be
>>> interesting times/effects, because all that hardware has to be paid for
>>> somehow.
>>
>> That seems plausible to me, but I would like to see the basis for that
>> estimate.
>
>
> Take a block.  Calculate the amount of money spent on the mining of that
> block, which you can use 25BTC as a proxy for.  Divide that by the
> number of transactions in the block.
>
> The result varies.  When BTC was in the 1000 range, it was up to 60 per
> transaction.  These days it seemed to be around 30.
>
> Shortly after Ken posted the paper showing this, blockchain.info stopped
> showing some of the info, ... oh, but it's back now:
>
>    http://blockchain.info/stats
>
> Cost per Transaction:  $41.68. And a graph:
>
>    http://blockchain.info/charts/cost-per-transaction

For cost so defined to be comparable to other concepts of cost, need to 
assume that mining is only moderately profitable, which appears to be 
true, and that the cost of mining is largely the cost of massively 
replicating and validating transactions, which is not true, but becoming 
increasingly true.

Not a workable system.

We need blockchain money system that is more scalable - transactions are 
only moderately replicated and moderately duplicate stored, and in which 
authority more reliably corresponds to ownership of the money, rather 
than ownership of computing power.




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