The evolution of the Bitcoin mining

The evolution of the Bitcoin mining

The arrival of technologies that promise to lead the mining of bitcoins to another level has awakened fears in some members of the community bitcoiner. And it is understandable, since we are moving at high speed in an unexplored territory.

.The same word “mining”, in relation to a digital currency, we would have sounded a little less than to delirium just four years ago. But in the absence of a detailed map of the territory, we have a compass. Our compass is the science of monetary union, and to her aferraremos to distinguish – to the extent possible – the true from the false.

With regard to the consequences of mining with ASICs (which will be ubiquitous in the near future), here is one of the many questions that have been raised in the Bitcoin forum, followed by our response:

The technological leap that the new phone Butterfly Labs, which are sold at such low prices, do not generate a tremendous fall in the price of bitcoin? (It is assumed that the easier it is to generate a bitcoin, the lower your price, no?)

In the first place, the price of bitcoin depends both on the mining of bitcoins Since the gold price of gold mining: this is, very little. The price of gold is not increased by a factor of almost 10 in the course of ten years by an increase in the difficulty to extract gold, but by a rise in demand for gold as an asset shelter. And vice versa, the price of gold had not fallen before by a decrease of the difficulty to remove it.

bitcoin Chart price difficulty hash rate Spanish
top Chart: price of the BTC and its relationship with the difficulty.
Bottom Chart: USD obtained in 24 hs. to an average of 100 MHash/s.
What moves the price is not the difficulty or ease to get bitcoins through mining, but the demand for bitcoins. It happens that the incentive to undermine (and thus the computational power provided to the network) tends to follow the price and that they be confused the causal relationship between difficulty and price. But it is important to distinguish which of the two is the engine.

Evolution of the hardware for mining
development of the hardware for mining on the
other hand, the miners are progressing more or less all together: CPU to GPU, of GPU to FPGA FPGA, ASIC. So the mining can be more efficient in set (or by considering each miner isolated), but the efficiency of each miner in relation to the others does not improve with technological innovation. Undermine with ASICs will be more efficient, yes, but it’s going to be in the same measure for all of those who undermine with ASICs.

Finally, it must be borne in mind that approximates the first decrease to half the prize in bitcoins by block found – an event that will be repeated every 4 years. In other words: Each time will be distributed less bitcoins among miners. And although this is not necessarily a prerequisite for the future price, is one of the reasons why people are about (demand!) to Bitcoin: utility and scarcity.

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