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Bitcoin Mining’s Three Body Problem

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Re: Bitcoin Mining’s Three Body Problem

#81

Post by lukifer »

_7fvc wrote: post #40

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 allow…

They'll die if they can't make enough returns to pay for the electricity (and I'd be happy if we helped make that a reality through a tax on carbon and/or POW mining itself).

Re: Bitcoin Mining’s Three Body Problem

#82

Post by srib »

season2episode3 wrote: post #6
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. Or, you know, you could just turn the computer off while you're not actively using it. It saves you money and does a small little good thing for the environment too.

That argument, unfortunately, is a slippery slope. One could list a gazillion things that are good for the environment. The environment argument against Bitcoin has been thoroughly debunked.

There are several valid points of criticism against Bitcoin. I wish more effort is put into it to criticize it along those fronts.

Re: Bitcoin Mining’s Three Body Problem

#83

Post by brian_cloutier »

AgentME wrote: post #60
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?

A double spend is generally what people mean by "rewriting history". A 51% attack only lets people steal money by taking back recent transactions and sending them elsewhere. Transactions that have been received a long time ago are generally safe. (An attacker can reach further back in time if they run the 51% attack longer or with even more hashpower.)

This is not quite right.

51% lets you rewrite arbitrarily-deep history, limited only by how much time you're willing to spend on the attack. You have more hash strength than the rest of the network combined! You pick some ancient block and start building blocks off of it, and the very definition of a 51% attack is that your new fork will eventually outgrow the "real" fork.

Double spends are possible well before 51%. Even a 10% attacker has the ability to (sometimes) double-spend. A 10% attacker can try to double-spend transactions and has a certain chance of being able to. The chance of success decreases exponentially, the deeper in the chain the target transaction is. However, for a high-enough value transaction, attempting to double spend it can have a higher EV than the mining revenue you lose out on by mining honestly.

Re: Bitcoin Mining’s Three Body Problem

#84

Post by wmf »

taywrobel wrote: post #61
lalaland1125 wrote: post #59

Earlier quoted context omitted.

Proof of stake is as equally expensive as proof of work. The trick is that both of based on burning money, proof of work burns by using CPU cycles while proof of stake burns through lost interest. http://www.truthcoin.info/blog/pow-cheapest/ gives a nice discussion of how this works.

The problem is that the claim that nothing is as cheap as proof of work as made in that article is only applicable if you think cryptocurrencies have value in a way that is comparable to tangible goods in reality, like the electricity they burn to have proof of work. I don’t. Your “lost interest“ on a currency that has nothing beyond speculative value is literally worthless to me. The increased energy production and…

You can have whatever values you want, but it remains a fact that cryptocurrencies can be sold for real money and they can be lent at interest using "DeFi" so forgone interest is a real thing that can be calculated.

Re: Bitcoin Mining’s Three Body Problem

#85

Post by wmf »

perl4ever wrote: post #72
spir wrote: post #54

Mining revenue is the network cost of running the Bitcoin network. What if you ran a business that spends billions per year on network cost, then somebody told you they could reduce it by 98% and make it a flat cost, forever. That's proof of stake. Ethereum launches the first phase of proof of stake this year. When Ethereum v1.5 launches in ~18 to 24 months, Ethereum's network cost will undergo such a transformation.…

To bring $1 worth of US currency into existence, it only costs a fraction of that amount. But to bring $1 worth of bitcoin into existence, it costs $1. So, it seems obvious to me hash based currency is a virus that is many orders of magnitude less efficient, but many people seem impossible to convince of this.

You're probably using mainstream economics while coiners are using crackpot Austrian economics. Of course you can't convince them.

Re: Bitcoin Mining’s Three Body Problem

#86

Post by [deleted] »

a1369209993 wrote: post #64
trixie_ wrote: post #26

Earlier quoted context omitted.

There's a big difference between rewriting all history and rewriting a portion of it during an attack which costs 400k per hour. Also people may misinterpret 'rewriting history' as the ability to to change coins sent from A -> B to A -> C. Which it is not. Not saying an attack still isn't bad, but let's be clear what the extent of the damage could and could not be.

1: It's actually, under your proposal, "rewriting a portion of [history] during an attack which costs 400 [ not 400 thousand] [dollars] per hour". 2: If you are A (and regardless of whether you're also C) and you sent money to B during the 400$/hr (less than a high-profile lawyer, and probably faster to boot) attack, then yes, changing coins sent from A -> B to A -> C is exactly what you can do.

[deleted]

Re: Bitcoin Mining’s Three Body Problem

#87

Post by Drakar1903 »

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.

Let's not get hung up on details, if you have the resources to consider 51%ing Bitcoin for presumably nefarious purposes, you're probably a government/big finance/oligarch actor and you're probably not penny pinching.

Re: Bitcoin Mining’s Three Body Problem

#88

Post by Drakar1903 »

brian_cloutier wrote: post #15
trixie_ wrote: post #13

Earlier quoted context omitted.

Not saying this isn't a possibility, but you'd think in the last 5 years of thousands of altcoins this sort of thing must of happened at least once? I guess the interest has to be there to attack it? Though if the interest was there more people would be mining it. Something like that.

It... has happened. Multiple times. Bitcoin Gold: https://cointelegraph.com/news/bitcoin-gold-blockchain-hit-b... Vertcoin: https://www.coindesk.com/the-vertcoin-cryptocurrency-just-go... Ethereum Classic: https://cointelegraph.com/news/ethereum-classic-51-attack-th... Google is happy to show you more.

I keep wondering what pushes people to stay in the ecosystem of the forked chain that quote unquote lost the fight.

Re: Bitcoin Mining’s Three Body Problem

#89

Post by [deleted] »

season2episode3 wrote: post #6
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. Or, you know, you could just turn the computer off while you're not actively using it. It saves you money and does a small little good thing for the environment too.

[deleted]

Re: Bitcoin Mining’s Three Body Problem

#90

Post by roenxi »

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 entire Bitcoin network could technically be run off a single Rasberry Pi.

But can that be done practically? At some point you lose the ability to tell which of the forks is 'Bitcoin' and which are 'pretender' altcoins.

I can imagine a future where you run a chain for 6 months on a Pi then someone turns up with an ASIC and writes a new 6 month history and calls it Bitcoin instead. The risks of shenanigans would be huge.

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