Quote from: fc_flumpker on May 13, 2013, 02:00:46 PM

Sorry if this is covered elsewhere. But with an allowance of only one search per minute, I gave up trying to find it.

I seek assistance in trying to understand how bitcoin can last. My main concern is what happens as difficulty increases, transaction load increases, and the computational power needed to confirm transactions increases. We're beyond the point where CPU based mining is feasible. GPU mining is only possible in pools. ASICs are coming online that have more power, but when will that end?

It seems there will come a point in the future when only pools of $25,000 ASICs will be able to get anything done - and at what return? After many hours of reading on the topic, I'm left with the following questions:

1. Am I wrong that if no one is mining, no transactions get confirmed and nothing moves?
2. If the computing power is owned by only a few who can afford it, the integrity of the project is lost, isn't it?
3. Am I completely misunderstanding the way this works?

Yes, it can last.

The first thing you have to understand is Bitcoin is an experiment. A lot of what will happen with it is simply unknown. Being experimental isn't necessarily a depressing negative. The http protocol now used everywhere was experimental too. Bitcoin is a new model so it can't help being experimental. What Bitcoin has in its favor, though, are three very powerful assets: populist support, alliance with free markets, and very smart people working for its success.

Answering your questions:

1. Correct. As long as Bitcoin exists there must be someone mining.
2. Not necessarily. The composition of miners may change, but there will still be many of them. Also technology historically gets cheaper over time.
3. No you have a pretty good understanding.

You also have to understand Bitcoin is no longer alone. There are viable alt-coins now with the same desirable features as Bitcoin (anonymity, irreversibility etc.) like Litecoin which uses the Scrypt algorithm that made cpu mining again effective, and Novacoin. Movement toward overly centralized outcomes can move the market to support more decentralized versions.