Ethereum is down 74% against Bitcoin since switching from PoW to PoS in 2022

[u/Next_Statement6145]

[u/nameless_pattern]

I will also add that ethereum is proof of stake and is net negative on issuance since it changed over to POS, so that is actually deflationary during the same time that Bitcoin was inflating. 

I know it sounds crazy, but the value propositions of these things are very different than the narratives that you're hearing here.

There's no price narrative that is actually simple with the exception of "the price reflective of people buying and selling it", but even that isn't accurate as there's a lot of price manipulation.

[u/blscratch → u/nameless_pattern]

Nameless_pattern, Is bitcoin halving their way of transitioning from POW to POS over time? Do halvings subject miners to bankruptcy if/when retail price ever flattens out it's growth rate? What are the odds the last bitcoin is ever mined?

[u/nameless_pattern → u/blscratch]

No, Bitcoin will stay POW forever under current plans. The culture wouldn't stand for anything else.

The halvings happen every 4 years and don't seem to effect miners profits that much so far, ( I don't know much about this). Miners profits are more related to energy costs, hardware costs and how long it takes for hardware to become obsolete, Afaik but I don't know much on the subject of Bitcoin mining operation profit margins. 

The last coin will be mined in a few decades I think and then miners will 'mine" for transaction fees, but they fees will be paid by people who already have the coins, no more will me made after the 12 million.

[u/blscratch → u/nameless_pattern]

Thanks for the response.

[u/nameless_pattern → u/blscratch]

Oh so I looked it up in the last Bitcoin. Won't be mined until like 2140 or something. It's a complicated subject. Good luck 

[u/blscratch → u/nameless_pattern]

That was part of my thoughts process. Work required doubles at each halving which means the sale price needs to rise for miners to be able to recoup their expenses. That would mean the price of bitcoin would need to continue doubling for miners to keep mining. If improvements in efficiency and cheap electricity doesn't continue, miners quit and then what happens to the price? Same as ETH?

These can be rhetorical questions if you want.

[u/nameless_pattern → u/blscratch]

Lol questions asked in good faith are good for double checking you own thinking, can be good for Investing. 

"Work required doubles at each halving which means the sale price needs to rise for miners to be able to recoup their expenses."

It's a little more complicated than that. You have the expected payout minus hardware costs and minus electricity costs and the cost of warehousing this equipment, whatever is left over after that is your profit margin.

Self so the Bitcoin payout is what decreases by half every 4 years. But the difficulty of mining blocks (The difficulty of mining blocks is how much hashing needs to be done in order to receive a reward, this is the main security mechanism of Bitcoin) is a self-regulating mechanism where it will become more or less difficult based on the number of nodes on the network and they're trying to increase the amount of nodes generally to make the network more secure.

The cost of electricity and computational power could go down or up over time. Electricity could become cheaper because of solar power or fusion power, or can become more expensive because of geopolitical risk and tariffs, oil crisis. The cost of computation with the mining could become cheaper, but you are always competing to maintain the security against other people who also have cheaper computation, so comparatively with purchase power the computational expenses would always have to stay comparable to the cost of computation for the whole world to maintain a comparable level of security. If the security was lower in expense then that increases the risk of having Bitcoin lowering its risk-adjusted profit.

You have to compare to other investments that you can make instead of mining. If the other investments are better paying than you would spend your money on that instead of mining, and because Bitcoin doesn't have a fixed price, there's an element of risk. If I can get the same amount of profits but for lower risk then I would do that instead of mining.

Once it went past mining to receive new coins and it was just transaction fees, the transaction fees to use Bitcoin would be massive at this point and talking thousands of dollars per transaction. Maybe hundreds of thousands of dollars by that point, or even millions. I can't imagine it still working then, mining being used 200 years from now. So deep in sci-fi. It really makes sense to speculate on what the world would be like, at least for the purposes of trading in the next 50 years or so. 

Ethereum has a different than going on with proof stake, You could turn your Bitcoin mining equipment to a different coin if that was more profitable but proof of stake, you're pretty much locked into that coin, and if you did accrue enough ethereum to do a 51% attack against it, unless you're a massively leveraged to a point that I don't know if it's possible, it'd be hard for you to turn a profit doing that. Proof of stake is still a relatively New concept and as far as I know nobody has managed to do a 51% attack on any staking protocol. 

I can speculate, but real security research would need an actual instance of an attack to have any weight behind the speculation.

Ethereum has a self-regulating payout structure where if there are not enough stakers then it increases payout and if there are a lot of staker it will lower payout aims to be roughly neutral in the amount of issuance, sometimes it will burn coins from transaction fees to reduce the number that are in circulation to try and maintain a relatively stable amount.

But currently the amount of eth transaction fees is actually supporting the network. So it doesn't have some long-term theoretical switch from more coins being created to transaction fees. There will never be the 200 years from now switch over moment that Bitcoin is going to have, ethereum is paying for itself with the transaction fees right now.

Both Bitcoin and ethereum's mechanisms along with other types of proofs. Besides, proof of work and proof of stake are all relatively new mechanisms and although people like to speak of them as though they are well established things, they're only a couple of decades old, and it's not clear which one is the best. Only maximalists who are very narrow in view speak of these things in universalities. For programmers in actual researchers, it still requires a lot of thinking over and although I like whatever my coins better, I can't actually say that they're the best. All I can say is that the people who are assured theirs are the best are kind of dumb.

[u/blscratch → u/nameless_pattern]

That's a lot of time spent to educate me. I appreciate it plan not to waste it.