[kwlug-disc] Peak crypto?

[Evan Nordquist]

>
> As I understand it, at some point there will be no more new bitcoins
> in a mining operation.  Only fees for transations.


Every ~4 years the number of new bitcoin created per block is cut in half.
So for example in 2009 every "mined" block would pay the miner 50 bitcoin +
the transaction fees (pennies) that were optionally added to each
transaction by the sender.
In 2013, mining a block would give you 25 bitcoin plus the fees for the
transactions in that 10 minute block.
etc.
In 2017 it was 12.5 bitcoin (plus transaction fees) per block.
After the most recent halving event in mid 2020 we are now at 6.25 bitcoin
(plus transaction fees) per block.
In 2 years, it will drop in half again to 3.125 bitcoin per block.

This goes on cutting the new issuance in half every ~4 years  (it isn't
exactly 4 years, it is every 210,000 'blocks', and each block happens on
average, every 10 minutes) until in all the last 'halving event' when the
issuance stops altogether around the year 2140.  There will still be
transaction fees to the miners.


>
> *- Every year, it is exponentially harder to "mine" Bitcoin because of the
> way**the system works. *


The amount of bitcoin mined is cut in half every ~4 years, but the
*difficulty* of the hashing puzzles is directly proportional to the
computing power involved in mining.   If more miners join the contest, the
problems get proportionately harder, if miners leave the system as was the
case when China banned bitcoin mining and half of the computing power left
the network, the problems got, you guessed it, half as difficult to solve.
That drop of half of the hash power of China leaving has since been
recouped elsewhere and is back at all time highs (from more and more mining
rigs joining the battle for bitcoin).


> *That directly translates into custom ASIC rigs that last*
> *less than a year, then go to the landfill, as well as exponential growth
> in**power usage unnecessarily.*


I am using used miners (Antminer s9) from 2017, which are still profitable
today.
I pay 10 cents per kilowatt hour for electricity (my rigs are plugged in in
Manitoba on the family farm where electricity is 9 cents per kilowatt hour,
I pay 10 cents per kilowatt hour towards their power bill so that THEY are
making a profit off of me.
Not a get rich quick scheme at this rate, I pay $200 in electricity each
month, and I get $260 worth of bitcoin.  Passive income.  Better than what
any bank could give me as far as a place to park $200 a month.

I don't advocate for any other form of cryptocurrency.  From what I can
tell, the VAST majority are rug pull scams, that are not as decentralized
as they claim to be.  Many rely on AWS or other central points of failure.
I like bitcoin in that it has no CEO to get in a scandal, no executive team
to screw anything up.  It is just a bunch of nerds volunteering their
compute power to make nerd currency, that no one can change the issuance
schedule, or rewrite the rules.  Anyone can use it, anywhere in the world.

*Evan Nordquist*


On Wed, Jan 19, 2022 at 5:14 PM Khalid Baheyeldin <kb at 2bits.com> wrote:

> On Wed, Jan 19, 2022 at 5:58 PM Chris Frey <cdfrey at foursquare.net> wrote:
>
>> As I understand it, at some point there will be no more new bitcoins
>> in a mining operation.  Only fees for transations.
>>
>> Do you think this will reduce the gold rush behaviour?
>>
>
> No idea.
> I am no expert on Bitcoin, and have no data to say one way or the other.
> --
> Khalid M. Baheyeldin
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