Ethereum can’t compete with Bitcoin for PoW power. The guy behind the blog doesn’t believe in PoS and thinks it hasn’t been proven and doesn’t work. Clearly 1 year long ignorance of Nu
do you think ethereum is dying? i just sent my first ether transaction in ‘eth’ environment
They are facing at least the same PoW challenges as Bitcoin in the medium term. In the short term they are faced by 50% attacks as they only have relatively low PoW power compared to Bitcoin. As soon as a few big pools turn to Ethereum they might actually take over.
I don’t think it is dying yet, however I do see pressures pulling down its value. However the network itself is definitely interesting and useful and I suspect it or a clone of it will survive even when mining pools take over in some way.
I thought Etherum was supposed to be PoS.
yes, but in a later phase. it would started as a pow, and it did.
but now they don’t know how to get into pos?
why do people even still create PoW coins. PoW was a mistake. Satoshi fucked us so bad by not creating a PoW/PoS hybrid in the first place.
Just like Bitcoin was needed to give birth to distributed consensus mechanisms, Peercoin was needed to improve them…
I’m glad that Satoshi invented Bitcoin.
PoW(bitcoin) is an excellent mechamism for commodity, ie Gold simulation. Halving reward!
Primecoin does quite bad in PoW because scarcity not maintained very well, look at the XPM flood everyday, dosen’t SK know most miners care only FIAT income? High and continuous reward of XPM destroys FIAT price and value expectation. Less miners like XPM, so low hashrate always!
PoS system, if not combined with scarce resource, is very easily copied, and Network effect cannot save PoS. Eg, facebook acoount is free, is PPC price free? How many software developers in this world can duplicate PPC? A million?
We will see in a decade if Moore’s Law pushes up XPM difficulty as expected. XPM’s current price is still much higher than BTC prices in BTC’s early years.
Primecoin scarcity depends on the computing power of the Primecoin network. The reward is not based on block height like it is at Bitcoin.
If the Primecoin network did see an increase of the computing power like the Bitcoin network did, the reward would already be very low.
At Bitcoin the price increase attracted miners. The same might happen to Primecoin.
I tend to disagree. You can copy the source code, but not the communities and the support for it. And you can’t copy the history. The “PoS system” is more than just the code.
NuBits is an open source PoS system. I doubt it can easily be copied.
The same is true for other PoS systems.
…and then invented PPC
I think this is true. Look how much we were worried about Neucoin taking over Peercoin with their huge investor list and marketing budget. They recently released and have now crashed down to #40 on CMC. So history and reputation play a huge role in the success of a coin.
The problem with peercoin is that peercoin is not a business that might general millions…
So holding peercoins is not worth it unless peercoin has a huge price but it will never get a huge price since it does not cost energy to produce it.
But I am glad that peercoin exists.
It’s what matters most!
People sometimes think that distributed consensus mechanisms lead to trustless systems. In fact it reduces the required trust to a bare minimum: trust between the participants of a deal AND trust in the system which processes the deal: the coin, the blockchain, whatever you might call it.
The reputation of the system is important for the trust people have in it!
Bitcoin is being mined because it’s worth something. It’s not worth something, because it’s being mined!
The energy costs is not what makes Bitcoin expensive.
It’s the investment in mining hardware to turn the energy into Bitcoin that makes Bitcoin expensive!
There is a feedback loop between Bitcoin price and the hash rate that lead to the arms race ending at SHA256 ASICs. There still is an arms race for more energy efficient ASICS, but overall it has slowed down.
When I was mining some BTC in 2011 all you needed was a decent GPU.
In the very beginning all you needed was a CPU.
CPUs were replaced by GPUs.
GPUs were replaced by FPGAs.
FPGAs were replaced by ASICs.
ASICs were replaced by more (energy) efficient ASICs.
With each iteration the entry level to mining BTC increased. The required hardware became more and more efficient, expensive and specialized.
With my BTC mining GPU (Radeon 5850) I played games until last year.
I was talking about a feedback loop.
That arms race which was fueled by BTC price was leading to an increasing barrier (investment) to mine BTC. It was easier (and possibly cheaper) to just buy them.
That created demand for BTC, which increased the price, which in turn attracted more miners.
I’m sure the complete economical model is more complicated, but in an abstract way it worked like this.
What does that mean for Peercoin?
At the moment it’s easily possible to mine PPC or buy them. With a modern SHA256 miner and cheap electricity it shouldn’t matter (price per PPC) whether you buy them or mine them.
What happens if a lot of hash rate enters Peercoin’s PoW process (because miners move away from Bitcoin)?
The coinbase reward drops.
As a result it will be more expensive to mine them which leads to higher prices if people have demand for getting PPC and calculate how much mining them would cost.
I went in great detail regarding my take of the economical basics of how coins work.
You might ask: hat does that have to do with Ethereum?
This one might be cheaper to operate than Ethereum is: http://www.rootstock.io/
Why would you have demand for Ethereum and its PoW if you can have the same features, but the security is based on Bitcoin (in which a lot of people trust)?
Yes, this is what I said in my post here…
Bitcoin and Peercoin are competing for the same role. The main difference (besides PoW & PoS) is that Bitcoin started its life out trying to become the ultimate decentralized network for payments without requiring a significant enough fee to filter out spam transactions. As a result, Bitcoin’s blockchain became huge and only now are they starting to realize that payments may not be the best role for Bitcoin. At the same time, Peercoin was launched from the very beginning with only the backbone/gold role in mind and has remained uncorrupted and true to that purpose.
Peercoin is cheap right now, yes, but I don’t expect that to remain the case. If Bitcoin does succumb to its massive blockchain and PoW unsustainability issues, then large miners will start to jump ship. If they switch to mining Peercoin, then the mining reward will drop significantly, causing Peercoin to become rarer and more expensive, which will cause even more miners to jump ship. I believe that Peercoin can only succeed if Bitcoin eventually collapses. Until that happens, Bitcoin will reign supreme in this role.
On the other hand, Nu doesn’t need to wait for Bitcoin to fail first, as it’s not competing for the same role. Nu’s price stability gives it the potential to succeed now.
Miners will jump the ship due to economical reasons.
The next coinbase reward halving in the Bitcoin network will be an important event.
If the Bitcoin price before the halving is at less than double the price needed to achieve a positive ROI, mining will be affected from the halving.
I bet for some mining operations this is true and mining devices will be shut off.
But the halving has another effect.
If the demand for BTC (measured e.g. in BTC per day) remains constant, the halving will lead to increased BTC prices, because only approximately 1,800 BTC will be created per day after the halving (compared to 3,600 BTC daily now).
My prediction for the coinbase reward halving is that in the weeks after the halving it will increase the BTC price by 10% to 30% compared to the weeks before the halving. I expect some more drastic swings as well.
This won’t be enough to operate all miners with positive ROI. They will drop off the Bitcoin network and some of it might mine PPC afterwards.
The coinbase reward halving will increase the centralization of Bitcoin mining.
That is one of the reasons I’d like to see a successful Ethereum and not a rootstock that is dependent on Bitcoin.
Short-term to mid-term the economical situation might look better for rootstock than it does for Ethereum.
Long-term that creates the same dangerous dependency on the BTC price level Bitcoin might once suffer from.
If rootstock can offer similar features Ethereum does offer, but at a lower price, it’s bad for Ethereum and good for rootstock.
Rootstock might easily be ported to e.g. Peercoin reducing the costs for sustaining it by orders of magnitude - who knows.
Either way (with rootstock based on BTC or on PPC) it doesn’t look too good for Ethereum.
It looks like a train wreck waiting to happen.
But I think it will be years from now until it happens.
The Ethereum project is an interesting idea. Would be a pity to see it fail - and all that will be built on top of it.
The transition from PoW to PoS could reduce the costs for sustaining Ethereum by far.
Does anybody know where that’s placed on Ethereum’s agenda?
The start with PoW seems to be related with the time it would have taken to create a PoS system for Ethereum - they didn’t want to wait for that.
We saw no effect of halving on Litcoin’s price recently…
Well, that’s sort of what I meant, both technical and economic unsustainability.