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Bitcoin Mining’s Three Body Problem

aniccaresearch.tech

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Re: Bitcoin Mining’s Three Body Problem

#101

Post by [deleted] »

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.

[deleted]

Re: Bitcoin Mining’s Three Body Problem

#103

Post by spyder »

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…

And there are altcoins without mining.

Re: Bitcoin Mining’s Three Body Problem

#104

Post by isoprophlex »

Fantastically written article, very to the point without too much flourish, and very in depth as others have noted.

This bit is funny imo:

But in late 2019, the National Development and Reform Commission (NDRC) removed mining from a list of activities to be eliminated. Note that the NDRC also oversees the energy industry. Massive amounts of hydropower squandered during flood season is a longstanding issue. The officials are beginning to realize that Bitcoin mining is a highly effective way of transforming excess local capacity into a global digital commodity.

One point of view would be that speculation and greed of bitcoin hodl-er fanboys is subsidizing China's renewables industry...

Re: Bitcoin Mining’s Three Body Problem

#105

Post by kevingadd »

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

This has been false for probably a decade or more. Pretty much any modern processor has dramatically lower power consumption when not under load through a combination of things like clock adjustment, powering off cores, and even dynamically adjusting voltage. This is part of why smartphones have battery life measured in dozens of hours instead of 1-4 hours.

Re: Bitcoin Mining’s Three Body Problem

#106

Post by garmaine »

kcolford wrote: post #46
srl wrote: post #41

Earlier quoted context omitted.

Wait... isn't it worse than that? If I buy enough hashpower to have a measurable effect on the price, shouldn't the price be driven down, by the increased supply? Thus an ASIC farm is worse than a raspberry pi, at least as far as the effect on price goes. (But, isn't there some majority attack? So maybe I want an ASIC farm as a way to protect my investment...)

No because the supply is fixed in time

The supply is fixed in number of blocks, not time.

Re: Bitcoin Mining’s Three Body Problem

#107

Post by keymone »

CalmStorm wrote: post #23
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.

The other common misconception is that the price of bitcoin is determined by the hashrate. It is actually the other way around, a higher price drives up the hashrate, because a higher price means more demand for bitcoin. Some founders of altcoins apparently don't understand this and try to buy hashpower to artificially increase the hashrate, hoping to increase the price of their coins. If there is no demand for their…

Hashrate determines the difficulty to attack, aka security. Security influences the price.

Re: Bitcoin Mining’s Three Body Problem

#108

Post by jkhdigital »

jayd16 wrote: post #99
jkhdigital wrote: post #28

Earlier quoted context omitted.

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).

Depends entirely on the policies of the merchant from which you’re buying goods. I have to admit, I had to read a couple dozen research papers about (theoretical) attacks on Bitcoin before I really understood the nuances. I’m expecting main chain transactions to be relatively expensive, but off-chain solutions can still be cheap. Yes, this requires some trust of a third party, but for small transactions that’s probably unavoidable. Not all transactions are created equal, and trustless settlement is expensive.

Re: Bitcoin Mining’s Three Body Problem

#109

Post by qes »

trixie_ wrote: post #14
Klinky wrote: post #12

Earlier quoted context omitted.

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.

Small space heaters run at 750 watts on the low setting.

A single Bitcoin miner runs at 1500w on its only setting and sounds like a small aircraft preparing for takeoff.

Re: Bitcoin Mining’s Three Body Problem

#110

Post by qes »

a1369209993 wrote: post #67
Dylan16807 wrote: post #66

Earlier quoted context omitted.

Though that's also assuming people don't do anything about the blatant attack.

True, but if such a attack only costs 400$/hr there's going to quite a lot of them to do things about.

It's almost like if it were true that if it only cost $400/hr to 51% attack the BTC chain, we would actually see it happening much more often.
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