Quote from: datz on May 11, 2013, 06:51:41 AM

..Bitcoin is fatalally flawed in that mining and verifying the block chain wastes resources. If mining ever became unprofitable it would taper off..

Quote from: datz on May 12, 2013, 05:03:17 AM

Bitcoin mining is the problem with Bitcoin.

This is what I can't overlook, and therefore I can't take the rest of the content in your posts seriously.

Mining is a brilliant solution for controlled currency issuance. The tapering geometric progression in the block reward and encryption of block headers with the Merkle root of a current transaction set is also brilliant. As a package Bitcoin is doing so well that difficulty is now 10 million, an extraordinary value to reach in just 4.5 years. The only time mining was unprofitable was in 2009 when Satoshi kept the faith and Bitcoin alive until wider participation really kicked off in 2010. It has not looked back since.

Block verification by mining nodes is massively reduced by using pools.

If you think mining will taper off then you cannot deny that difficulty will have to fall. But there is no sign of this happening. Difficulty could only fall if the fx rate fell to catastrophic lows. The fall from $266 to $50 had a negligible effect on the next difficulty (probably even if it were sustained, not brief).

The fees market for block space is comatose because it is dwarfed by the block reward, however, once blocks average 20 MB each then the fees market will start working properly. By the time blocks are 100+ MB the block reward will be a sideshow. Why would most/all people stop mining when a solved block could yield the equivalent of $100,000? Answer: they will keep mining.

If you are worried about electricity costs then ASICs use less electricity per hash than the prior technologies. A future generation of ASICs could be made with reversible gates which means that electricity use will be negligible and fans obsolete. http://web.cecs.pdx.edu/~mperkows/CLASS_VHDL_99/tran888/lecture003-reversible-logic.pdf
"Power dissipation of reversible circuit, under ideal physical circumstances, is zero."

Bitcoin in a nutshell: