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Bitcoin Mining’s Three Body Problem

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Re: Bitcoin Mining’s Three Body Problem

#91

Post by ramblerman »

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

That's a bit of a naive view. It's like saying, we don't need this expensive security vault in our bank, we could just store it all in a shed.

the proof of work is crucial to the proper functioning of bitcoin, and if the only miners were running on a raspberry pie anyone could come along and do a >50% attack stealing what they want.

Re: Bitcoin Mining’s Three Body Problem

#92

Post by eddieoz »

segfaultbuserr wrote: post #77

This is an interesting article, but IMHO, its discussions on Hacker News lacks depth. Almost all threads are debating about superficial Bitcoin issues that has already been talked endlessly, and none of the thread focused on the main thesis of this article: > Bitcoin mining is a complex phenomenon that connects hardware and software, the energy and financial markets. Invisible rules govern every aspect of it. The per…

It is a very interesting approach to the aspects which interferes directly to the mining environment. And I totally agree the discussions around this subject normally are superficial and around the market emotions.

Considering climate (weather) aspects is one of the strategic decisions about how to conduct the business in this case.

Re: Bitcoin Mining’s Three Body Problem

#93

Post by jayd16 »

jimmydorry wrote: post #75
perl4ever wrote: post #72

Earlier quoted context omitted.

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.

Nobody would be mining any crypto if their cost was exactly equal to their revenue. This fundamental misconception might be the reason why you can't convince anyone that crypto currency is a "virus".

Speculation is a thing. Not only could users be mining for zero profit, they could be mining at a loss but expecting speculative gains in the future.

It just takes some funding to do this. Its not out of the question.

Re: Bitcoin Mining’s Three Body Problem

#94

Post by jayd16 »

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.…

Or you could just continue to use fiat and credit.

Re: Bitcoin Mining’s Three Body Problem

#95

Post by pjc50 »

segfaultbuserr wrote: post #77

This is an interesting article, but IMHO, its discussions on Hacker News lacks depth. Almost all threads are debating about superficial Bitcoin issues that has already been talked endlessly, and none of the thread focused on the main thesis of this article: > Bitcoin mining is a complex phenomenon that connects hardware and software, the energy and financial markets. Invisible rules govern every aspect of it. The per…

It's a tremendous story - and all the details make explanatory sense. But I'm a little skeptical, because if the seasonal effects were big you would be able to see them in the overall hashrate graph at the bottom?

Re: Bitcoin Mining’s Three Body Problem

#96

Post by londons_explore »

pjc50 wrote: post #95
segfaultbuserr wrote: post #77

This is an interesting article, but IMHO, its discussions on Hacker News lacks depth. Almost all threads are debating about superficial Bitcoin issues that has already been talked endlessly, and none of the thread focused on the main thesis of this article: > Bitcoin mining is a complex phenomenon that connects hardware and software, the energy and financial markets. Invisible rules govern every aspect of it. The per…

It's a tremendous story - and all the details make explanatory sense. But I'm a little skeptical, because if the seasonal effects were big you would be able to see them in the overall hashrate graph at the bottom?

I suspect when there is very cheap electricity, income is much higher than the electricity costs, and money is ploughed into new hardware.

When electricity is expensive, it's still worth running the most of the equipment you already own, but it isn't worth buying more.

Hence, you wouldn't expect much seasonal variation in hashrate.

Re: Bitcoin Mining’s Three Body Problem

#97

Post by jayd16 »

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…

Doesn't the hashrate need to stay high for security reasons? If miner participation is low, can't bad actors dominate the system and produce false transaction?

If the hashrate ever collapses isn't the whole system at risk?

Re: Bitcoin Mining’s Three Body Problem

#98

Post by londons_explore »

contravariant wrote: post #43
thebean11 wrote: post #34

Earlier quoted context omitted.

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.

Well, efficient is hardly the right phrase. When it comes to heating using electricity then 100% efficiency is on the low side. A heat pump could be many times more efficient.

It is sad that "heat" and "efficiency" are defined like this...

"100% efficiency" should be the Carnot's theorem efficiency limit...

Re: Bitcoin Mining’s Three Body Problem

#99

Post by jayd16 »

jkhdigital wrote: post #28
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

Correction: pay $400/hr to gain a temporary majority in the block mining lottery. You can do a variety of things with that majority power, but “rewriting history” is a bit misleading. Yes, you can probably get the network to discard some previously accepted blocks, but this only allows you to invalidate your own transactions plus the transactions that depend on them. Furthermore, any blocks that were mined under high…

Wouldn't you be able to buy goods, reverse the transaction, and buy more goods? That seems pretty significant if BTC is supposed to be ubiquitous (large transactions don't raise eyebrows) and cheap to use (meaning cheap to hash and cheap to takeover).

Re: Bitcoin Mining’s Three Body Problem

#100

Post by redis_mlc »

srib wrote: post #82
season2episode3 wrote: post #6

Earlier quoted context omitted.

> 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.

> The environment argument against Bitcoin has been thoroughly debunked.

Nonsense, every bitcoin mined is unnecessary for the environment.

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