The problem I see is less in the amount of mining power but the ability to join the next X amount of blocks. I might be wrong but it seams to me like buying a subway ticket knowing i'll be able to get on the train only later this week.

...which is something commuters do regularly to save money, whereas travelers may not. I think the number of ASICs working on bitcoins by the time it succeeds will have us in the megatransfers per second range easily. Question remains what bandwidth does bitcoin need, and at what point if any does a litecoin fill the gap?

Can the developers shape and mold the overall cc economy and thereby act as the Federal Reserve Board does for the us.

Stuff the Fed does for the US economy:
Sets interest rate (a bank may borrow money from the Fed at x%)
Sets reserve requirement (a bank must have x% holdings in federal reserve notes)
Plays the market, talks to legislature, analyzes macroeconomy, reacts to changes in economic climate, deals openly in bond sector in conjunction with the treasury (printer of federal reserve notes), according to the orders placed by acts of congress and executive authorities.

Are there isometries that apply to cc econ?

The interest rate is akin to transaction fees, which is why having a wallet program running is akin to being your own bank. You are also you're own Fed in that the setting of the transaction fee is akin to setting the interest rate. The network is like a competitive consortium of banking agents who compete by processing the more profitable transactions more rapidly than the less profitable transactions.

The reserve requirement is confusing and could have a lot of parallels. The reserve requirement is a result of money checking. Money is created when a person goes to the bank and deposits a paycheck. If the reserve requirement is 20%, then the money supply grows by the remainder percentage of the paycheck. When the Fed makes a change to this number, banks transact large sums of notes, and fluctuations known as money supply inflation and deflation can be well tamed.

There is a physical cryptocurrency note: it is a string of entropic information. The reserve requirement is that 100% of the string must be verified against a chain of blocks of such strings which contain the history since the creation of the string's integral value quantua, that is, when it was first mined. The popular term for such a string is a hash, since it is the result of math known as hashing.

100% reserve requirement is hefty compared to the yankee dollar.

If you receive 51% of someone's federal reserve note, you can take it to the bank and exchange it for 100%. Plus, the guy left holding the 49% is out of luck. 49% of a federal reserve note is worth 0%. The physical bitcoin, that string of entropic information with integral value quanta and ownership vectors, is hefty compared to the yankee dollar.

The Fed might be interested in profiting from the ordeal... they could provide a fairly trustworthy proof-of-burn, where you send them federal reserve notes, and they send you bitcoins with the USD serial numbers encrypted in the hash. That's kind of futuristic, but most futurists have some sort of digital cash in the works.  I can almost go to 7-11 and get bitcoins.  Seems like they have a whole wall of digital currency.

The number of miners has absolutely no effect on transactions. You can have 1M times the number of miners we have today, or 1M times the hashing power, and transactions will still be limited to 10 minutes per block, and ~500KB of transactions in every block. I believe the hard limit on block size is 5MB. So, if Bitcoin gets popular and hits that limit, we'll have only two options:

1) Increase the block size. This sin't something the developers do. This is something, like with all proposed changes currently happening with Bitcoin, someone (anyone) can propose on the developer's site, other people can discuss and argue about until they figure something out to settle on, and then developers, or anyone, really, can write code to increase the block size, and submit it to the same site. After the actual code itself is discussed and argued about, and no bugs are found, THEN the developers can include it in their next release of Bitcoin-QT, as can everyone else who makes Bitcoin wallets, and typically they pic some date way in the future to make the switch. Basically, everybody will be running Bitcoin clients that have code embeded in it that will do nothing until X date, and as soon as X hits, will start to run the code, causing a "hard fork" (older clients will not be compatible with the new fork). last few times it was a few months to a year that X was set in advance.

2) Bypass the block chain completely when making transactions. This is essentially what all the exchanges to when people trade money. No bitcoin transfer actually hits the blockchain when it's traded - it's all done on their own local software. The only time something is written to the blockchain is when someone deposits or withdraws bitcoin. Similar services will likely pop up that let you deposit bitcoin, and then use the online wallet or a credit card of sorts to spend it, with all transactions being recorded only on the service provider's accounting books. Then, at the end of every day, they will just make one big transaction, sending the coins everywhere they need to go.

10000 transactions per seconds? Could u give me the link, plz?

Right. I thought "the system can process around the 10k transactions per second" was about the present time.

Great post very informative.  Thank you!

Didnt know anarchism is a sexual preference  

Don't want to offend anyone in general, tried to be funny.

Rassah, jace, thanks for the great posts!


All these manual actions... I dont know enough but I would say that this should be decided as some kind of a future plan and automate it. If somebody decides to clog the blockchain, this can happen tomorrow... Today, when there is a reward in action, do miners ignore transactions?

Lets say that somone/(get ready for consperacy in 3 2 1)some government decides to play with lots of transactions to test the system's capabilities. There should be a way to submit the block size change (securely) without a need to actually upgrade the wallets.

I still believe that this is some kind of vulnerability of the system.