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One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

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Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#141

Post by paulie_a »

wmf wrote: post #113
jen729w wrote: post #105

Earlier quoted context omitted.

Let’s say some party/group gets 51%. Now they “own” the blockchain. Doesn’t its value drop to 0, thereby making the whole effort pointless? I’m not going to buy BTC (or whatever) from that system, therefore the owners take no cash from it. Yeah they have all the BTC, but so what? Everyone loses. What am I missing?

The movie plot here is to secretly get 51% of the hashrate, cash out a billion-dollar fraud, then walk away. In reality it's unlikely to happen.

If that were possible, it would be a one time thing I am guessing. But it's possible to short bitcoin now I believe. So ruining the network/reputation could be profitable?

I am speculating and don't know for sure.

Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#142

Post by trhway »

zeroxfe wrote: post #136
trhway wrote: post #132

Earlier quoted context omitted.

>And this burns an incredible amount of electricity. And all for what? Just to show proof of work. No. PoW is just an old name from the 199x spam fighting. The point here is planet-scale consensus, not "proof of work". One way to achieve distributed consensus in untrusted non-static environment is to randomly choose master for a given block. Imagine that everybody just throws a dice, and whoever gets 6 becomes that m…

> Now, if somebody could come up with more energy efficient way to achieve that consensus at such a scale... A handful of the top cryptos are using some variant of proof-of-stake (like dPoS, dBFT, etc.), all of which are energy efficient. Ethereum is currently experimenting with PoS in Casper.

PoS basically increases energy efficiency by decreasing the degree of randomness and skewing the dice in favor of stakeholders to the degree depending on their stakes (at the limit you'd have just one entity verifying all the transactions, a very energy efficient situation we have today with fiat). In general PoS looks like a reasonable trade-off, and we're to see whether it gets accepted.

Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#143

Post by imtringued »

asudghionbio wrote: post #130
undersuit wrote: post #115

Earlier quoted context omitted.

I think you're being too harsh. Right now silicon use is of course wrapped up in a loop of value derived from the coins being mined having value, but that completely disregards the actual value of the blockchains. An excellent quote I found is: "how to recycle what will soon or later be a HUGE obsolete distributed supercomputer dedicated to SHA-256."

>that completely disregards the actual value of the blockchains It doesn't. I just think the value of blockchains is near zero. I have yet to hear of any problem that isn't better solved with a normal database.

There is one problem that the blockchain solves.

It can make a large hostile network with extremely high computation resources act like a single computer with the performance of a 10 year old desktop.

Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#144

Post by KaoruAoiShiho »

amalag wrote: post #98
HN15718653 wrote: post #48

As a cryptocurrency-confused individual, I read articles like this and wonder how I'm supposed to assign any meaning to the "value" being created here, and by blockchain PoW in general. So this company is buying a bunch of wafers... He's converting the value of the wafers into value on blockchain, I guess? Because I can't help but interpret these things as "some people are wasting a lot of electricity, and you should…

PoW will go away. Noone will entrust their wealth to miners. There are plenty of other ways to achieve consensus and coins are moving away from PoW. But we are still not done with the Bitcoin bubble.

I have a feeling PoS will not be seen as credible as PoW.

Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#145

Post by paulddraper »

blackrock wrote: post #129

The amount of waste of Bitcoin Mining is incredible. It is all about virtual digital mining, which is to race to find the first hash, that has X number of zeros in the front of it. And this burns an incredible amount of electricity. And all for what? Just to show proof of work. Can't there be a more useful usage of cryptocurrency mining to show proof of work? Something that is more relevant to humanity. Like protein…

Same is true of gold, diamonds, ivory, other items whose rarity makes them precious.

Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#146

Post by oh-kumudo »

paulddraper wrote: post #145
blackrock wrote: post #129

The amount of waste of Bitcoin Mining is incredible. It is all about virtual digital mining, which is to race to find the first hash, that has X number of zeros in the front of it. And this burns an incredible amount of electricity. And all for what? Just to show proof of work. Can't there be a more useful usage of cryptocurrency mining to show proof of work? Something that is more relevant to humanity. Like protein…

Same is true of gold, diamonds, ivory, other items whose rarity makes them precious.

Unlike Gold, bitcoin's rarity is artificial, comparison of Bitcoin to high-end artworks might be a more proper one.

Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#147

Post by ActsJuvenile »

zeroxfe wrote: post #136
trhway wrote: post #132

Earlier quoted context omitted.

>And this burns an incredible amount of electricity. And all for what? Just to show proof of work. No. PoW is just an old name from the 199x spam fighting. The point here is planet-scale consensus, not "proof of work". One way to achieve distributed consensus in untrusted non-static environment is to randomly choose master for a given block. Imagine that everybody just throws a dice, and whoever gets 6 becomes that m…

> Now, if somebody could come up with more energy efficient way to achieve that consensus at such a scale... A handful of the top cryptos are using some variant of proof-of-stake (like dPoS, dBFT, etc.), all of which are energy efficient. Ethereum is currently experimenting with PoS in Casper.

Ah PoS, the "Rich get richer" algorithm.

Ethereum's PoS implementation requires lock up of balances in stake accounts, so it removes any incentive to do transactions.

I believe that ETH PoS will calcify the economic strata, kill all transaction volume, and have the opposite of network effect.

Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#148

Post by oh-kumudo »

rpearl wrote: post #138
trhway wrote: post #132

Earlier quoted context omitted.

>And this burns an incredible amount of electricity. And all for what? Just to show proof of work. No. PoW is just an old name from the 199x spam fighting. The point here is planet-scale consensus, not "proof of work". One way to achieve distributed consensus in untrusted non-static environment is to randomly choose master for a given block. Imagine that everybody just throws a dice, and whoever gets 6 becomes that m…

a cheaper way to achieve this is to have a centralized currency and mature financial infrastructure.

But...government and banks are evil, cried my inner libertarian self /s

Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#149

Post by lalaland1125 »

blackrock wrote: post #129

The amount of waste of Bitcoin Mining is incredible. It is all about virtual digital mining, which is to race to find the first hash, that has X number of zeros in the front of it. And this burns an incredible amount of electricity. And all for what? Just to show proof of work. Can't there be a more useful usage of cryptocurrency mining to show proof of work? Something that is more relevant to humanity. Like protein…

It is impossible to create a "useful" PoW. The issue comes down to incentives. As bitcoin is a decentralized, trust-less system, there needs to be constant and powerful incentives to prevent miners from cheating (by creating forks, or executing any number of other attacks).

The current main incentive against cheating is that miners will lose their invested PoW (compute time + electricity) if they cheat and get their block thrown out. However, with a useful PoW, this calculus changes. Now, the PoW is no longer "wasted" when the miner cheats and gets caught as the PoW is now useful for something besides mining. This means that attacks are much cheaper and much more likely to happen.

One interesting part about this is that you can consider PoW usefulness on a sliding scale. The more useful the PoW, the more vulnerable your coin is to attack. Thus, you can probably get away with a "useful" PoW if it isn't actually very useful. This is one of the reasons why most "useful" PoW schemes focus on something which is pretty much useless (such as finding weird primes and whatnot).

Re: One Bitcoin miner is buying 20,000 16nm wafers from TSMC per month

#150

Post by bigiain »

Ologn wrote: post #118
gambiting wrote: post #88

Earlier quoted context omitted.

Why are banknotes worth anything? They are just pieces of paper with some ink on them, after all. They are "worth" something, because people are willing to do work or trade you stuff for them. The same with mining bitcoin - instead of printing banknotes, you make a "thing" that you can then trade for services and objects, because people want to have that "thing"(this part is crucial). Most importantly, people are wil…

> Why are banknotes worth anything? Until 1971 dollars were worth something because they could be converted into one of the thousands of tons of gold bars the US stores at Fort Knox (and elsewhere). Then a magic wand was waved over the printing presses at the US Treasury and they began to attain value for no reason. This magic has now spread to Bitcoin, Ethereum, and even cryptocoins like Dogecoin, whose creator has…

So there's apparently 1.65 billion US dollars in unnamed bank accounts behind Tether...

Cough - yeah, right...

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