Cryptocurrency mining using integrated photonics • Hacker News Board

Re: Cryptocurrency mining using integrated photonics

#61

Post by tromp » Fri, Oct 01, 2021, 3:41 PM UTC

mistrial9 wrote: post #37

tromp wrote: post #35

Earlier quoted context omitted.

The difficulty D defines the expected number of double SHA256 hashes E[H] = 2^32 * D that must be computed on average per block to meet the difficulty target, which according to the average efficiency of mining ASICs implies an average amount of energy to be used.

first of all, difficulty D is a float, and there are no floats in the actual computation. Second, a float is not a number of hashes. bzzzzt edit- In plain English, this explanation is incorrect because it relies on floating point number D. Difficulty D is a convenience representation as float of the ratio of two very large integers; one of those large integers is the fixed MAX Target. The other vary large integer is…

Indeed; as [1] says:

    What is the formula for difficulty?
    difficulty = difficulty_1_target / current_target
    (target is a 256 bit number)

I simply used the fact that the difficulty_1_target (the MAX Target as you call it) needs an expected 2^32 double SHA256 hashes to meet.

[1] https://en.bitcoin.it/wiki/Difficulty

Re: Cryptocurrency mining using integrated photonics

#62

Post by tsimionescu » Fri, Oct 01, 2021, 3:48 PM UTC

kybernetikos wrote: post #58

tsimionescu wrote: post #48

Earlier quoted context omitted.

Yes, much better to give such control to an algorithm and protocol written and controlled by a handful of engineers and mining pool owners. And make no mistake: in a state that allows or encourages financial institutions to discriminate, you will eventually be discriminated against with Bitcoin as well. The state may not have caught up to the technology yet, but social problems can't be fixed with technology.

> social problems can't be fixed with technology. Do you think that 'social problems can't be caused by technology'? Because if social problems can be caused by technology then surely they can solve them too.

Yes, I also think social problems can't be caused by technology. Technology is neutral - if we're using it to do harm, it's harmful. If we're using it to help, it helps.

Note that this is not 'guns don't kill people, people kill people'. Guns do kill people, so they must be regulated. The gun violence problem in the USA is not the fault of guns, it's the fault of the way US society chooses to regulate access to guns.

Re: Cryptocurrency mining using integrated photonics

#63

Post by mistrial9 » Fri, Oct 01, 2021, 4:01 PM UTC

tromp wrote: post #61

mistrial9 wrote: post #37

Earlier quoted context omitted.

first of all, difficulty D is a float, and there are no floats in the actual computation. Second, a float is not a number of hashes. bzzzzt edit- In plain English, this explanation is incorrect because it relies on floating point number D. Difficulty D is a convenience representation as float of the ratio of two very large integers; one of those large integers is the fixed MAX Target. The other vary large integer is…

Indeed; as [1] says: What is the formula for difficulty? difficulty = difficulty_1_target / current_target (target is a 256 bit number) I simply used the fact that the difficulty_1_target (the MAX Target as you call it) needs an expected 2^32 double SHA256 hashes to meet. [1] https://en.bitcoin.it/wiki/Difficulty

> expected 2^32 double SHA256 hashes

yes, expected by.. some approximation of the current hardware to find the solution.. We are not at the answer yet

Re: Cryptocurrency mining using integrated photonics

#64

Post by jlokier » Fri, Oct 01, 2021, 4:13 PM UTC

mistrial9 wrote: post #33

HNews people - multiple, lengthy comments here claim that "due to competitive pressures" the "total energy used to mine will be the same" no matter how hashes are calculated. The challenge problem in BTC is to find a number below a threshhold that fits a pattern. The threshhold changes in a two week regime. Finding the number is not prescribed, only the threshhold. Where is the required energy use here? Please illumi…

- The total mining income is determined by how much blockchain users are willing to pay for blockchain services. It's determined by market demand for transactions on the blockchain, in a grand auction competing with other users.

- There are two markets - competition between blockchain users offering fees in their grand auction, and competition between miners. These are strongly decoupled from each other by the difficulty threshold update algorithm. So the total mining income, offered by users and paid to miners, is independent of hashrate, number of miners, or mining technology. Miners don't change the total mining income, they can just compete to get a share of it.

- Finding the hash number requires a brute force algorithm. There are shortcuts to do it significantly faster, but it is assumed there is no mathematical shortcut which avoids the brute force property. (Brute force means a particular mathematical property of the search algorithm, it does not say how fast or what kind of technology.)

- No matter what technology is used to find the number, it requires some energy, and in proof-of-work, due to the brute force property, the rate of energy consumed is proportional to the hashrate.

- The required total hashrate automatically adjusts, via the difficulty threshold, so that a miner with X% of the total hashrate gets X% of the total network mining fees, no matter what technology they use.

- A miner with X% of the total hashrate can spend anywhere from 0% to X% of the total network mining fees and remain profitable, depending on how energy efficient their rigs are. No more than X%; that would make a loss, so they would stop.

- A miner with access to more energy efficient mining technology (lower rate of energy consumed per hash) will seek to maximise their profit by obtaining more mining rigs, if they can get them. When that technology is widely available, everyone will want it. The effect is to push up the total hashrate for everyone.

- When the total network hashrate goes up, miners without the new technology cease to be profitable (they are spending the same but their X% has reduced due to the total hashrate increase, so they receive insufficient payment), and those have to stop mining unless they can get the new technology. Only miners with the new technology can afford to participate.

- Therefore the network rapidly converges on the new technology.

- The total spent on mining costs must be between 0 and the total mining income.

- When the total spend on mining costs is much below the total mining income, and the new technology is widely available, someone sees a market opportunity and buys a mining rig. It works this way because the network has converged on the new technology, so it's a roughly level playing field to join.

- This raises the hashrate, and pushes up the total mining costs, without changing the total mining income. This keeps happening and converges towards an equilibrium where the total costs are close to the total mining income. As long as there's someone seeing an opportunity to get a little for themselves.

- Because much of mining costs is energy cost, the miner equilibrium is eventually reached when the total spend on energy is close to the total mining income.

- Therefore, total energy consumption is roughly determined by the amount of energy that can be purchased for the total mining income.

- As mentioned at the start, total mining income (before costs) is decoupled from all this mining business. So rolling out new mining technology doesn't change how much total income is available to spent on the whole blockchain mining network, and competitive self-interest among miners means most of that spend goes to energy.

Re: Cryptocurrency mining using integrated photonics

#65

Post by tromp » Fri, Oct 01, 2021, 4:14 PM UTC

mistrial9 wrote: post #63

tromp wrote: post #61

Earlier quoted context omitted.

Indeed; as [1] says: What is the formula for difficulty? difficulty = difficulty_1_target / current_target (target is a 256 bit number) I simply used the fact that the difficulty_1_target (the MAX Target as you call it) needs an expected 2^32 double SHA256 hashes to meet. [1] https://en.bitcoin.it/wiki/Difficulty

> expected 2^32 double SHA256 hashes yes, expected by.. some approximation of the current hardware to find the solution.. We are not at the answer yet

Nothing to do with hardware. Quoting again from that bitcoin wiki page:

    The highest possible target (difficulty 1) is defined as 0x1d00ffff, which gives us a hex target of
    0x00ffff * 2**(8*(0x1d - 3)) = 0x00000000FFFF0000000000000000000000000000000000000000000000000000

As you can see a random hash has a chance of close to 2^-32 to satisfy that target.

Re: Cryptocurrency mining using integrated photonics

#66

Post by mistrial9 » Fri, Oct 01, 2021, 4:21 PM UTC

jlokier wrote: post #64

mistrial9 wrote: post #33

HNews people - multiple, lengthy comments here claim that "due to competitive pressures" the "total energy used to mine will be the same" no matter how hashes are calculated. The challenge problem in BTC is to find a number below a threshhold that fits a pattern. The threshhold changes in a two week regime. Finding the number is not prescribed, only the threshhold. Where is the required energy use here? Please illumi…

- The total mining income is determined by how much blockchain users are willing to pay for blockchain services. It's determined by market demand for transactions on the blockchain, in a grand auction competing with other users. - There are two markets - competition between blockchain users offering fees in their grand auction, and competition between miners. These are strongly decoupled from each other by the diffic…

interesting! I will research on this and reply (it might take a few days)

Re: Cryptocurrency mining using integrated photonics

#67

Post by jlokier » Fri, Oct 01, 2021, 4:47 PM UTC

mistrial9 wrote: post #52

colechristensen wrote: post #40

Earlier quoted context omitted.

The amount of mining being done would be driven by the price of mining (fixed + recurring) and the reward for mining. If you make mining cheaper you just get more mining, lowering energy usage per unit mining will increase the mining done to balance the reward. Actually lowering total energy usage would require lowering total reward or raising the price of energy.

this is a sort of economic framing, but also, not the question

It's hard to figure out what you really want to know, after many commenters have tried to explain why replacement mining technology doesn't reduce overall energy consumption, which was your broader line of questoning.

So I will focus on this one part:

> Where is the required energy use here?

Fundamentally, the hash calculation is designed so that energy consumption is proportional to required hashrate - regardless of hashing technology.

The required hashrate is reactive. It's governed by the difficulty adjustment algorithm which reacts to economic competition on the blockchain as well as economic competition among miners, so as to create two decoupled markets with money nonetheless flowing between them, which incentivises miners to spend most of the fees offered by blockchain users on energy, regardless of how efficient the mining technology is per hash.

So the required hashrate always adjusts until most of the mining fees offered by blockchain users gets spent on energy.

If your question is, essentially, "why any energy at all", the answer is that calculating things using zero energy isn't possible. If your question is "why can't we come up with a way to calculate these numbers that's so efficient the system won't increase the difficulty to fully compensate", that might be possible, but it would require the brute-force algorithm assumption to be broken. That is a type of breaking cryptography. The cryptography is designed so that it uses energy proportional to the hashrate on any type of computer. There is no known way around that. People try, of course; the incentives are very high for them to succeed.

Merely building a faster computer won't do it. A photonic computer, for example, doesn't challenge this assumption at all. A computer a trillion times more energy efficient would not challenge this assumption either. My limited understanding tells me even a quantum computer doesn't challenge this assumption, because SHA256 hashing is not amenable to Shor's algorithm, and Grover's algorithm only divides the bit-difficulty in half, which the difficulty threshold adjustment would automatically compensate for.

However, switching away from proof-of-work does change this assumption, and that's how to reduce the energy consumption.

> this is a sort of economic framing, but also, not the question

You cannot ignore the economic framing - it is a key technical part of the proof-of-work design.

It is such an important and powerful effect, it has a technical name, cryptoeconomic incentive, and it's treated as a critical technical factor in all major blockchain designs.

Although you can see it as a statistical or human effect, it is a strong and predictable effect. It is almost analogous to statistical mechanics, where we can calculate the properties of physical substances from underlying "random" individual behaviours, because the statistical ensemble behaves in a predictable way.

Re: Cryptocurrency mining using integrated photonics

#68

Post by goohle » Fri, Oct 01, 2021, 4:50 PM UTC

incrudible wrote: post #20

tsimionescu wrote: post #18

Earlier quoted context omitted.

Using PoW crypto at all creates massive waste for no productive use. In a world struggling to avoid catastrophic climate changes, it is completely irresponsible, and should be stopped instantly. Not to mention, crypto currencies are worse than traditional currencies in every way: much more wasteful than the whole global banking system for a tiny tiny tiny fraction of a percentage of the number of transactions, much m…

Proof of work is wasteful in the same sense that having banks is wasteful. Imagine what it takes to operate a banking institution. It's not just electricity. It would be "efficient" to just write the word "bank" on a shack and then have one or two workers "guard" over all the deposits. Unfortunately, nobody would be willing to use such a bank. Actual banks that people use need to spend a lot of money just on maintain…

"No office", app-only banks exists. One such bank is popular in my country.

Re: Cryptocurrency mining using integrated photonics

#69

Post by colechristensen » Fri, Oct 01, 2021, 4:55 PM UTC

mistrial9 wrote: post #52

colechristensen wrote: post #40

Earlier quoted context omitted.

The amount of mining being done would be driven by the price of mining (fixed + recurring) and the reward for mining. If you make mining cheaper you just get more mining, lowering energy usage per unit mining will increase the mining done to balance the reward. Actually lowering total energy usage would require lowering total reward or raising the price of energy.

this is a sort of economic framing, but also, not the question

The energy usage comes from the economics, and can’t be escaped. The growth of the global hashrate is driven by the profit margin between the mining cost and reward and growing overall mining costs drive btc prices higher.

Re: Cryptocurrency mining using integrated photonics

#70

Post by MinorTom » Fri, Oct 01, 2021, 5:06 PM UTC

reginold wrote: post #56

jlokier wrote: post #24

Heh. I worked on a type of photonic PoW in 2019 (but it wasn't silicon photonics). - It's faster and lower power for the hash rate. It's worth it. But not as fast and low power as hoped. - It's a great advantage for the early adopter who can mine that bit faster than everyone else for a short time. That was the motivation for the project. - Contrary to the title of the article, making hashing faster for less energy d…

Appreciate your thoughtful explanation and context. The shortcut on "whenever you see a headline about low energy PoW" is useful, I had been wondering about that. One thought - has there been anything on something like "Proof of Capability of Work"? ie "Yes, I have all this compute power potential, but I'm not using it". Oh shit did I just back into what you mean by VDF? Basically Proof of Sitting Around? I'm gonna h…

> "Proof of Capability of Work"

I'm not an expert on this, but:

Practicality aside this is either still really wasteful (lot's of unused compute sitting around in some datacenter) or really susceptible to attacks (e.g. "proof of the capability to rent a lot of AWS servers for a few seconds - everybody can do that, and somebody will")