Quote from: justusranvier on October 30, 2014, 07:02:44 PM

Quote from: tvbcof on October 30, 2014, 06:14:32 PM

Basic theory suggests that mining will always become unprofitable no matter what the various magnitudes of various parameters. We've seen in practice that this theory seems correct. What kind of sucks about this is that the value spikes have created conditions for more sha256 hashing power to develop than can be comfortably supported by transaction fees. At least when Bitcoin is used for buying trinkets.

The problem with this is that it could make economic sense for miners to attack Bitcoin, and this is particularly the case if they are going to throw in the towel on Bitcoin and consider their gear to be a write-off. Some combination of economics and corp/gov coercion could provoke such a decision.

Two things which could help offset this threat would be:

1) increase fees to increase the reward for properly supporting Bitcoin.

2) provide a profitable outlet for the hashing power in such a way that supports Bitcoin rather than considers it dead.

3) break mining pools into smaller pieces with more focused goals and in doing so reduce the potential for consolidated strategies to be implemented.

Sidechains seem to me to have the potential to promote all three of these desirable outcomes.

The problem isn't that Bitcoin is used for buying trinkets - the problem is that Bitcoin isn't being used enough for buying trinkets.

The economics of mining are going to stay fucked up until the transaction rate grows about three orders of magnitude.

We just have to find a way to get from here to that point - after that it will take care of itself.

well said, the problem isn't technical its adoption of the idea or cryptocurrency, everything flows from faith in Bitcoin.