mikema63 wrote:Each mining reduces the number of bitcoins produced exponentially to prevent hyper-inflation, Its a nice touch I think since it simulates gold mining in an odd way and its difficult to fake.
Have you ever heard of the Silk Road, the Onion, or Tor? Some interesting goings on in there, very Agorist I would say.
I've done a bit more research and at the moment mining doesn't seem worth getting into for the reason you mentioned. The system self-adjusts bit-coin production according to the work being put in, the more machines mining the harder the difficulty in producing coins and of course the reverse is true. There are real world costs to mining, hardware and (substantial) electrical costs. It seems that at the moment there so many machines mining that the cost of producing coins is more than the value of coins being produced. The value of the coins isn't connected in anyway to the cost of making them but determined by market forces.
It seems fair to say that given the supply of bit coins is limited that the value of bitcoins in terms of other currencies will likely to continue to go up at least if the usage continues to grow. But that still doens't justify starting to mine now, because it would be cheaper to simply
buy bitcoins rather than make them if one is inclined to bet on a rise in bitcoin value.
Of couse existing miners who already have the hardware, might still have a rational to mine.
Bitcoins are epic genius, it takes a bit to grasp just how elegant and ingenious the system is and that maybe its only flaw, it is so, maybe too, techno-geek. There will be a some limit as to how many people in the world will be willing and able to participate in a currency that is somewhat incomprehensible (for the tech-illiterati) and is so tech dependant. Making bitcoin exchanges
requires tech-gadgets, internet connectivitly and a certain minimum technical literacy, that most people in the world don't have. In contrast other currencies can but don't
have to used online making them accessible to people who don't have iphones or broadband accounts.
Maybe the whole world will be wired in one day and then bitcoins could displace every other currency.
I have heard about Tor, actually I have been meaning to donate some of my webserver's bandwidth as a relay, but I don't actually use it much anymore. All that encryption slows up transfers and I don't care that much about the government or other finding out what i am looking at on the internet.
Silkroad and onion are new to me, they more US-centric perhaps.