Earlier quoted context omitted.
What the hell is AI token farming?
I think they mean serving inference workloads
How does that work? Isn't most bitcoin mining done on custom ASICs? I didn't think that the ASIC could be repurposed for inference.
Bitcoin miners are losing on every coin produced as difficulty drops
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Re: Bitcoin miners are losing on every coin produced as difficulty drops
#172The headline is dramatic but this is literally how bitcoin is designed to work. Miners leave, difficulty drops, costs go down, mining becomes profitable again. The interesting part isn’t the loss per coin, it’s how long the lag between unprofitable mining and difficulty adjustment keeps forced selling pressure on the market.
The headline is confusing the issue. Bitcoin miners are losing money because October's crash took Bitcoin from $126,000 to below $70,000, and the Iran war has pushed up oil and electricity prices. The minor difficulty drop is a result of that, as some Bitcoin miners drop out. It's not the cause.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#173[deleted]
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#174Earlier quoted context omitted.
There's a soft failure-mode for bitcoin where due to the alternating difficulty adjustment, you could end up with people only mining every other 2016-block adjustment. Let's call this cycle A and cycle B. If A is too hard, miners drop out, cycle B gets easier, miners flood back, cycle A gets harder. This results in the hard cycle getting longer and the easy cycle getting shorter. This isn't completely critical as the…
I thought the rate of mining was tied to the maximum transaction rate the network can support?
It's the other way around, and there's no obligation to even carry transactions when mining, although it's incentivised through fees.
Your mining rate is simply your hash rate vs the hash difficulty.
Conceptually, it's analoglous to rolling random numbers in (0,1) until you get to a number smaller than 1/X, where X is large.
How long it takes you to do that, isn't dependent on how many other people are also trying to do that, if you get 1 hit per hour, then lots of other people getting hits doesn't actually stop you getting your 1 hit per hour.
Now, that's not quite the whole truth, as there's a small amount of time needed for propagation of the previous chain, but with an average hit globally of ~10 minutes, that's not actually a big factor.
What could happen to incentivise people is increased fees if blocks get less common due to dropped miners, there'd be more competition to get into blocks if they start filling up.
That combined with the fixed costs such as depreciation as othes mentioned, keeps the risk of this form of failure to a minimum.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#175Earlier quoted context omitted.
There is a breakthrough on a more productive Po(useful)W: https://news.ycombinator.com/item?id=47430951
Isn't the whole point of PoW that the work done is otherwise useless? I mean: you invest money (in form of your hardware/electricity bill) to mine a block, and that ensures that whoever would like to fork the chain has to spend at least as much money to do it. If PoW can earn you extra money outside of the Bitcoin ecosystem (by making the work "useful") it lowers the cost of the 51% attack, potentially making it prof…
I understand that there was a problem finding a useful PoW from the computer science perspective, and that paper is showing a solution.
Now, it doesn't necessarily lower the cost of an attack because you can adjust the required output to a cost that is suitable.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#176Just waiting what quantum computing would do to crypto.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#177Shouldn't the price therefore go down? (Bitcoin should be an instrument the price of which correlates with the cost of the energy required to make new ones).
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#178Earlier quoted context omitted.
Except people wanting to do more than 15 transactions a minute. Or that to scale everyone would need to store a petabyte size blockchain.
https://en.wikipedia.org/wiki/Lightning_Network I have been paying for my VPN with lightning payments; it takes less than one second to go through.
How does this work? I read the wikipedia article but I don't understand how Lightning enforces the transaction.
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#179Earlier quoted context omitted.
Except people wanting to do more than 15 transactions a minute. Or that to scale everyone would need to store a petabyte size blockchain.
https://en.wikipedia.org/wiki/Lightning_Network I have been paying for my VPN with lightning payments; it takes less than one second to go through.
Lightning has mostly done this by being a lot more centralized in practice and one could argue... What's the point of it all in this case? Why not just use regular currency?
Re: Bitcoin miners are losing on every coin produced as difficulty drops
#180Earlier quoted context omitted.
Except for the inevitable and obvious fact that proof-of-work creates a self-sustaining primary incentive for energy waste more pernicious than has ever been seen in any other financial or commercial enterprise, obliterating any hope of having energy that is too cheap to meter.
Isn't this kind of the opposite? Mining Bitcoin requires both hardware and electricity, and the cheapest electricity is solar. There isn't any severe scarcity of the raw materials to make solar panels, or of sunlight, so Bitcoin miners can buy as many solar panels as they want and it would only increase the economies of scale for producing them for other purposes too. Solar has inconsistent output. There is none at n…
Or we could use all that "free solar energy" to benefit humanity through a million other more useful endeavors. Such as developing and deploying batteries.
One thing we do not lack is demand for more energy.