# Some basic questions about Bitcoin **URL:** \ **Category:** Factual Questions\ **Created:** [December 19, 2017, 10:49pm UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897 "2017-12-19T22:49:36Z")\ **Posts on this page:** 10\ **Page:** 3
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [December 27, 2017, 3:03pm UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/41 "2017-12-27T15:03:24Z")
Kinda. I’d argue it’s sorta like the relationship between high speed impact physics versus ordinary more sedate physics. To be sure, the underlying reality is the same. But the factors that matter most and the kinds of predictions we can make about, say, planetary orbits, are very different from those we can make about planetary collisions. Most of the time multiple dozen suppliers, multiple million demanders, attitudinal inertia, physical logistics, and such dominates the basic economics to determine what apples cost at the grocery store. But there are corners of the economic envelope where all that stuff, though still operational, is locally and temporarily overwhelmed by mania of crowds. One of the challenges of modern commerce, and modern finance even more so, is that the more we speed up the processes and reduce the influence of those inertial factors, the more unstable the total system becomes and the more room there is for the formal kind of chaos to drive the result. The feedback loop between stochastic chaos and human emotion is a frightful thing indeed. ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [December 27, 2017, 3:15pm UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/42 "2017-12-27T15:15:00Z")
Less “basic” question: Is Bitcoin mining the sort of search algorithm that might get a O(√N) speedup with a quantum computer? (I realize that even if that’s true in theory, it may be near-impossible in practice since the entanglement would have to persist throughout the involved SHA-256 algorithm. — ???) ---
**Author:** ![Hari\_Seldon](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hari_seldon/32/5173_2.png) [@Hari\_Seldon](https://boards.straightdope.com/u/Hari_Seldon)\ **Post date:** [December 27, 2017, 4:15pm UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/43 "2017-12-27T16:15:19Z")
If you want to read more about, there is a series of articles on it in the Jan. Scientific American. I read it carefully and am still somewhat confused, but also somewhat better informed. It was mentioned that the energy outlays on all that bitcoin mining were extraordinary. One thing not mentioned is the possible impact of quantum computing. This could impact it in two possible ways. Although they didn’t mention the encryption method, it was suggested that it was a trapdoor method. The only two I am aware of, based on the difficulty of factoring a large number and the discrete logarithm problem over an elliptic curve, could be solved quickly by quantum computing. And it seems to me that the problem a miner must solve is the sort that would be quite amenable to the kind of massively parallel computing possible in a quantum computer. Either of these developments could lead to serious problems, ISTM. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [December 27, 2017, 4:18pm UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/44 "2017-12-27T16:18:29Z")
> [@Chronos](#): > > The creator of bitcoin is known only by a pseudonym; his or her real identity is unknown. And at first, the value of bitcoin was very low, because the only people who did anything with it were doing so more or less on a lark, just as a toy. Eventually, though, the number of users grew to include those who took it seriously. > . What launched it out of being a novelty is the criminal element on the dark web. Silk Road and whatnot. [https://www.dailytelegraph.com.au/news/opinion/how-bitcoin-and-cryptocurrencies-finance-the-dark-webs-underbelly/news-story/8124ce61dcd1764cd2ccb874ed62a5ce](https://www.dailytelegraph.com.au/news/opinion/how-bitcoin-and-cryptocurrencies-finance-the-dark-webs-underbelly/news-story/8124ce61dcd1764cd2ccb874ed62a5ce) Then people started speculating in it. ---
**Author:** ![SCSimmons](https://avatars.discourse-cdn.com/v4/letter/s/e495f1/32.png) [@SCSimmons](https://boards.straightdope.com/u/SCSimmons)\ **Post date:** [December 28, 2017, 5:16am UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/45 "2017-12-28T05:16:43Z")
> [@DPRK](#): > > That’s right. E.g, one guy paid for a large pizza (in dollars) and had it delivered to another guy, who paid the first guy 20000 bitcoins. Why did they bother? For kicks. I’ll bet his friends yank his chain nowadays. “Really? _Domino’s_?!” OTOH, without somebody getting the ball rolling, bitcoin would never have gotten to where it is today. So it was sort of an investment, presuming he had other bitcoins he held onto. ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [December 28, 2017, 1:32pm UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/46 "2017-12-28T13:32:07Z")
[Regarding](https://www.cnbc.com/2017/12/21/no-bitcoin-is-likely-not-going-to-consume-all-the-worlds-energy-in-2020.html) the guesstimate of how much electricity is used in mining a Bitcoin: “All of that analysis is based on a single estimate of bitcoin’s power consumption that is highly questionable, …” ---
**Author:** ![MrFloppy](https://avatars.discourse-cdn.com/v4/letter/m/43a26b/32.png) [@MrFloppy](https://boards.straightdope.com/u/MrFloppy)\ **Post date:** [December 29, 2017, 4:32pm UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/47 "2017-12-29T16:32:38Z")
> [@Fiendish\_Astronaut](#): > > I know it’s already been alluded to above but Im interested in exploring this 21m limit to the numbers of possible Bitcoins. As the Bitcoin approaches and then finally hits this limit what will happen? If Bitcoin mining helps to verify the ledger will Bitcoin crash? I presume there’s an attempt to head this problem off (if it is a problem) - what are the proposed solutions? Miners earn bitcoins in two ways - the reward (which is new bitcoins), and a percentage of the transactions. If I send bitcoin to you, I am charged a small ‘mining’ fee. When a miner grabs his ~1000 transactions to verify in a single block on the blockchain, he will, if he successfully solves the proof of work, receive a percentage from all 1000 transactions in that block - as well as his 12.5 newly created coins. Once all the bitcoins are mined - around the year 2040, the miner’s only reward will be from the transaction fees. Whether or not that will result in a profitable endeavor remains to be seen. ---
**Author:** ![LSLGuy](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lslguy/32/5813_2.png) [@LSLGuy](https://boards.straightdope.com/u/LSLGuy)\ **Post date:** [December 29, 2017, 4:44pm UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/48 "2017-12-29T16:44:36Z")
> [@MrFloppy](#): > > … > Once all the bitcoins are mined - around the year 2040, the miner’s only reward will be from the transaction fees. Whether or not that will result in a profitable endeavor remains to be seen. I understand the computational complexity of mining gets more difficult as the number of bitcoins grow. That was a deliberate feature to provide a slow wind-down of new production as the limit is approached rather than there being a brick wall stoppage of new production as the limit is reached. So far, so good. Does the computational complexity of transaction verification scale up over time? Or is it constant? If it scales up, then on what basis? Number of coins created to date, number of coins actively in circulation now, number of transactions in all history, something else? ---
**Author:** ![septimus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/septimus/32/410_2.png) [@septimus](https://boards.straightdope.com/u/septimus)\ **Post date:** [December 29, 2017, 5:02pm UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/49 "2017-12-29T17:02:57Z")
My understanding is that there is no transaction “verification” per se. There is a simple integrity check. And the transaction is encrypted with public/private keys such that only the owner of a bitcoin can spend it, and only his payee can receive. No? > [@MrFloppy](#): > > If I send bitcoin to you, I am charged a small ‘mining’ fee. My understanding is that tipping is voluntary. But eventually payers who don’t tip will not have their transactions processed. But again, I could be all baffled-up. :smack: ---
**Author:** ![Spectralist](https://avatars.discourse-cdn.com/v4/letter/s/ecccb3/32.png) [@Spectralist](https://boards.straightdope.com/u/Spectralist)\ **Post date:** [December 30, 2017, 4:56am UTC](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897/50 "2017-12-30T04:56:15Z")
The transaction fee is not technically compulsory but it is my understanding that no transactions that don’t add a generous transaction fee end up included in blocks any more. Which was one of the reasons Steam gave recently when they stopped accepting bitcoin. Here’s a chart of the transaction fees over time to illustrate > **[Bitcoin Avg. Transaction Fee Chart](https://bitinfocharts.com/comparison/bitcoin-transactionfees.html)** > > Bitcoin Average transaction fee, USD Chart Between May and Nov of 2017 it was bouncing around between 2.5 & 7.5 USD but since then has been jumping around hitting peaks of $55 and troughs of $5. > [@LSLGuy](#): > > I understand the computational complexity of mining gets more difficult as the number of bitcoins grow. That was a deliberate feature to provide a slow wind-down of new production as the limit is approached rather than there being a brick wall stoppage of new production as the limit is reached. So far, so good. > > Does the computational complexity of transaction verification scale up over time? Or is it constant? > > If it scales up, then on what basis? Number of coins created to date, number of coins actively in circulation now, number of transactions in all history, something else? The difficulty increases(or decreases) based on how quickly the blocks are currently being discovered in order to try and maintain a block discovery every 10 minutes. If all the big mining pools were to shut down tomorrow bitcoin would become unusable as the difficulty is high enough that a bunch of personal computers are probably never going to find enough blocks to adjust the difficulty, 2016 blocks, and as such each new block would take an enormous amount of time, years probably, if ever. This is a problem both because as I mentioned before the network can be crippled if it loses too much hashing power too quickly and because it means the network can always consume more power but that increase in power serves literally no purpose. To the network at least, it obviously increases the likelihood that the person adding that power will win any given block. If the hashing armsrace had never happened the bitcoin network would be exactly as useful as it currently is but consume a minute fraction of the power. The blockchain is unfathomably wasteful. [Previous page](https://boards.straightdope.com/t/some-basic-questions-about-bitcoin/804897.md?page=2)