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From: "Ferdinando M. Ametrano" <ferdinando.ametrano@gmail.com>
Date: Tue, 28 Oct 2014 22:44:50 +0100
Message-ID: <CADfmNEke=i+WWfJH0d5e7x5mbvGVuujK-LDke=6PRR_d_Vuhig@mail.gmail.com>
To: Neil <kyuupichan@gmail.com>
Content-Type: multipart/alternative; boundary=089e0122930afbfee705068290cc
Cc: Bitcoin Development <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] Fwd: death by halving
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On Tue, Oct 28, 2014 at 10:34 PM, Neil <kyuupichan@gmail.com> wrote:

> Economically a halving is almost the same as a halving in price (as fees
> take up more of the pie, less so).
>
> Coincidentally the price has halved since early July to mid-October, and
> we've not even seen difficulty fall yet.
>
because mining profits are many times operational costs. This might change
because of competition, in that case halving in price will become
problematic.

It amazes me that basic economic considerations seems completely lost here,
especially when it comes to mining. We should have learned the lesson of
how a small error in the incentive structure has lead from "one CPU, one
vote" to an oligopoly which might easily become a monopoly in the near
future.

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<div dir=3D"ltr"><div class=3D"gmail_extra"><div class=3D"gmail_quote">On T=
ue, Oct 28, 2014 at 10:34 PM, Neil <span dir=3D"ltr">&lt;<a href=3D"mailto:=
kyuupichan@gmail.com" target=3D"_blank">kyuupichan@gmail.com</a>&gt;</span>=
 wrote:<br><blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 .8ex;bor=
der-left:1px #ccc solid;padding-left:1ex"><p>Economically a halving is almo=
st the same as a halving in price (as fees take up more of the pie, less so=
). </p>
<p>Coincidentally the price has halved since early July to mid-October, and=
 we&#39;ve not even seen difficulty fall yet.</p></blockquote><div>because =
mining profits are many times operational costs. This might change because =
of competition, in that case halving in price will become problematic.</div=
><div><br></div><div>It amazes me that basic economic considerations seems =
completely lost here, especially when it comes to mining. We should have le=
arned the lesson of how a small error in the incentive structure has lead f=
rom &quot;one CPU, one vote&quot; to an oligopoly which might easily become=
 a monopoly in the near future.</div></div></div></div>

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