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Bitcoin Mining’s Three Body Problem

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Re: Bitcoin Mining’s Three Body Problem

#31

Post by wmf »

hn_acc_2 wrote: post #24
trixie_ wrote: post #18

Earlier quoted context omitted.

Right, I guess I feel less at risk of being the victim of a double spend and more at risk with rewriting history. Are there any reports of that? Like coins I've held on the chain for some time being stolen?

The value of your long-held coins will be almost nothing if the network is vulnerable to double spend. The potential losses are huge (especially for exchanges etc.) from double spend attacks, and the value of a cryptocurrency is very much dependent on users' confidence in its resistance to attacks.

Weirdly, this doesn't seem to be the case. Coins with no hashrate like BCH are still trading at pretty high prices. https://cointelegraph.com/news/bitcoin-cash-could-face-51-at...

Re: Bitcoin Mining’s Three Body Problem

#32

Post by mindcandy »

uryga wrote: post #8
trixie_ wrote: post #4

'Bitcoin is the product of hashpower. The industry wouldn’t exist without incentivizing miners to continuously invest in hardware and burning electricity to augment Bitcoin network’s settlement assurance' I think this is a common misconception. People don't need to continually invest in mining hardware to keep it going. The entire Bitcoin network could technically be run off a single Rasberry Pi. The network hash rat…

> At the end of the day your computer is no different from an expensive space heater. Might as well mine some crypto with it. i mean... it wouldn't be a space heater if it wasn't crunching pointless numbers...

The point of the numbers is to prove that you heated space. Seriously. It proves that you burned value that you know you are not getting back if you are caught falsifying records for the system. And, everyone knows its extremely hard to not get caught if you try. Therefore you can be trusted to sign records for the system because you are risk:reward tremendously more financially motivated to be a good actor than a bad one --including whatever nefarious scenarios you might imagine.

Re: Bitcoin Mining’s Three Body Problem

#33

Post by thebean11 »

hn_acc_2 wrote: post #19
trixie_ wrote: post #16

Earlier quoted context omitted.

It doesn't 'have' to be high. The hash rate could be 1/1000 of what it is today without any risk to 'settlement assurance'

https://www.crypto51.app/coins/BTC.html You could pay $384k to hire miners to 51% attack BTC right now (that is, if NiceHash had the capacity). If you cut the hash rate that much the cost would be only $400 or so. Does it sound like a secure trustless currency if anyone can pay $400 to gain 51% majority? EDIT: 51% attack != rewrite blockchain

Another caveat: pumping $384k/h into NiceHash would probably change the supply/demand dynamic drastically and increase the price.

Re: Bitcoin Mining’s Three Body Problem

#34

Post by thebean11 »

Klinky wrote: post #12
trixie_ wrote: post #9

Earlier quoted context omitted.

That is why I made the analogy to a space heater - because mining would be a free side benefit of something you actively use to keep warm. The environmental impact is also negligible if the power you're using is coming from solar or wind.

An idle computer clocks down and sips power. Going full bore mining coins results in significant power usage increases. We're talking 10 watts vs 100s of watts.

Right but if your goal is to heat your apartment (and your alternative heat source is also electric) running the computer is a pretty efficient heat source.

Re: Bitcoin Mining’s Three Body Problem

#35

Post by hn_acc_2 »

thebean11 wrote: post #33
hn_acc_2 wrote: post #19

Earlier quoted context omitted.

https://www.crypto51.app/coins/BTC.html You could pay $384k to hire miners to 51% attack BTC right now (that is, if NiceHash had the capacity). If you cut the hash rate that much the cost would be only $400 or so. Does it sound like a secure trustless currency if anyone can pay $400 to gain 51% majority? EDIT: 51% attack != rewrite blockchain

Another caveat: pumping $384k/h into NiceHash would probably change the supply/demand dynamic drastically and increase the price.

Definitely. I don't really think this hypothetical attack would be possible, I only bring it up to demonstrate the effect that lowering the hash rate would have on the cost of disrupting the network.

Re: Bitcoin Mining’s Three Body Problem

#36

Post by thebean11 »

trixie_ wrote: post #30
gridlockd wrote: post #20

Earlier quoted context omitted.

In order to maintain network stability at current prices of Bitcoin, a massive amount of hashrate is required. Those altcoins that have become worthless and are mined "just for fun" are only protected by the fact that they are worthless. Any attack would be a waste of resources. You could still attack them "just for fun" of course...

Not really. They are cemented into those blockchains. Unless you have a way to back write a blockchain.

That's kind of the point, you can back write a block chain with enough hash power. Just go back a few hundred blocks in the chain, and "fork" into an alternate chain. If your chain can catch up and become longer, you win.

This happens on a micro scale every day, when two people "solve" the next block at the same time. Inevitably, one of those forked chains gets longer and the other one is abandoned or "orphaned".

Re: Bitcoin Mining’s Three Body Problem

#37

Post by tdhttt »

trixie_ wrote: post #4

'Bitcoin is the product of hashpower. The industry wouldn’t exist without incentivizing miners to continuously invest in hardware and burning electricity to augment Bitcoin network’s settlement assurance' I think this is a common misconception. People don't need to continually invest in mining hardware to keep it going. The entire Bitcoin network could technically be run off a single Rasberry Pi. The network hash rat…

> The network hash rate is only so high because the ROI is there, but without it, people would still be mining.

Can you expand on that? What would be the incentive for the miners then? What happens when all blocks are mined?

Re: Bitcoin Mining’s Three Body Problem

#38

Post by hn_acc_2 »

wmf wrote: post #31
hn_acc_2 wrote: post #24

Earlier quoted context omitted.

The value of your long-held coins will be almost nothing if the network is vulnerable to double spend. The potential losses are huge (especially for exchanges etc.) from double spend attacks, and the value of a cryptocurrency is very much dependent on users' confidence in its resistance to attacks.

Weirdly, this doesn't seem to be the case. Coins with no hashrate like BCH are still trading at pretty high prices. https://cointelegraph.com/news/bitcoin-cash-could-face-51-at...

You're correct, and the market is always right after all.

However I am confident based on previous events that BCH prices will trend strongly downward when news of the next successful 51% attack is released.

Re: Bitcoin Mining’s Three Body Problem

#39

Post by erik_seaberg »

gridlockd wrote: post #25
trixie_ wrote: post #18

Earlier quoted context omitted.

Right, I guess I feel less at risk of being the victim of a double spend and more at risk with rewriting history. Are there any reports of that? Like coins I've held on the chain for some time being stolen?

If you're just holding coins you're "safe" in the sense that you will get to keep your account balance. However, if the network is unstable, then that balance will lose value in real terms or even become worthless.

If you sell something in return for coins, and the network could agree on a fork of history in which you never received those coins, not all your balance is safe. Either you trust the network operator(s) not to accept a fork, or you trust the implementation to make a winning fork infeasibly expensive (51% of all miners).

Re: Bitcoin Mining’s Three Body Problem

#40

Post by _7fvc »

This analysis misses altcoin mining. When mining adjusts on BTC, miners don't just turn off their rigs. They can go mine altcoins. This behavior introduces another dimension to mining economics. Miners are practical. They have to make money with their hardware and electricity. They can't afford to be ideological.

In the Bitcoin mining world (SHA256), miners like to have BCH, BSV and other alternatives. Altcoins allows them to diversify. That's why these chains will never die. They always have mining support.

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