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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

#211

Post by haakon »

z3c0 wrote: post #136
ziml77 wrote: post #130

Earlier quoted context omitted.

But even of you do see the use, why not proof of stake rather than proof of work?

I'll throw "proof-of-useful-work" into the ring. Reallocating at least a portion of BTCs verification onto existing energy costs could go a long way. Not suggesting it would be easy or that the entire network would be able to agree on what tasks to use, just that it's a theoretical option.

It's also not simply a matter of agreeing on what tasks to use. The task has to be computationally difficult to perform, but computationally trivial to verify. It must also be verifiable with only the context of the blockchain (no "oracle" that can make claims about real-world events).

Primecoin exist(ed?) and used the search for Mersenne prime numbers as its proof-of-work. That was 13 years ago and is still the only example I know of "proof-of-useful-work", and it would not be difficult to find sour voices challenging its usefulness.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#213

Post by patrulek »

red_admiral wrote: post #83
acidphreak2k wrote: post #44

Earlier quoted context omitted.

Up to a point; once it was over $12k or so, it was cheaper to mine them than to buy them. But yeah, I guess in retrospect I could have just dumped ~$450k into buying BTC when it was at $3,000 and made 3x what I ended up making, but there were other considerations for why I did it at the time. The mining was co-located with my cannabis grow/operations, and in many ways the mining was started secondary to that, even th…

> The [bitcoin] mining was co-located with my cannabis grow/operations HN quote of the day!

So its true what they were saying about bitcoin. It is used by criminals.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#214

Post by eru »

groundzeros2015 wrote: post #113
eru wrote: post #110

Earlier quoted context omitted.

I think the comment you replied to meant that the other coins are also dropping in price, when bitcoin drops.

Yes, but the coins with less participation require less power to compete. To make a market argument that there is an equilibrium of players across all coins, implies there are actual individuals finding opportunities and switching coins when they get out of sync.

Miners already switch between coins, yes.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#215

Post by oblio »

ptero wrote: post #201
oblio wrote: post #196

Earlier quoted context omitted.

Isn't it hard to use in practice? Liveness, inbound liquidity, moving funds between L1 and L2, don't all of those lead to massive use of hubs, this denying the entire premise of decentralization?

Very easy. If the merchant supports it, it is extremely easy; equivalent to pointing your phone at a reader to pay with GooglePay. Between people -- a QR or similar.

This doesn't answer my main concern. How do most people use Lightning? Do they operate on their own or use a big hub?

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#216

Post by Thorrez »

hn_throwaway_99 wrote: post #203
Thorrez wrote: post #183

Earlier quoted context omitted.

While I don't disagree in general, there are a couple gaps in your reasoning that weaken the argument: Adoption doesn't necessarily correlate completely with price. Price can increase without much adoption, due to speculation. In theory, adoption could also increase without much price increase. Electricity isn't the only requirement for mining. Hardware is also required. Miners can't simply use lots of additional ele…

> In theory, adoption could also increase without much price increase. Not really. A fundamental purpose for any currency is to act as a "store of value". There is no way for bitcoin to represent a store of value (i.e. value commensurate to real-world goods) for a larger and larger portion of society without the price skyrocketing, especially since Bitcoin is inherently deflationary with a max number of coins. Regard…

>The entire idea behind POW is that the total amount of work must be in direct relationship to the total value of the coins in the network, or else coordinated attacks become possible.

The total amount of work must be in direct relationship to the amount an attacker can gain from executing a 51% attack. It's not clear to me that if bitcoin doubles in price, an attacker can gain double the amount from a 51% attack. A 51% attack doesn't allow direct theft of other people's bitcoins. It allows double spend attacks, denial of service attacks, and through those, the ability to tank the price of bitcoin.

>Just think about how your "If it's using Europe levels of electricity at time X, then after a block reward decrease, it'll use Europe/2 amount of electricity" sentence doesn't make any sense, because eventually in 2140 or so there will be no block rewards, so according to your logic no electricity at all would be required to run the network.

It's possible for a block reward to be larger than necessary for security. In that case it can go through several halvings that purely improve efficiency without putting the network at risk. Yes, at some point, with a sufficiently large number of halvings, the network would be at risk, but that doesn't mean we can't have some efficiency gains before that happens. Your previous comment referred to bitcoin using more electricity than Argentina. That's a statement about how much electricity it's currently using, not a statement about how much electricity it needs to use to get the necessary amount of security. It might be possible to decrease the electricity usage while remaining sufficiently secure.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#217

Post by Lerc »

MBCook wrote: post #200
Lerc wrote: post #123

Earlier quoted context omitted.

The difference is that the quantity of what is being supplied is a factor with supply of oil/gold/grain/etc. For mining it is just necessary that it happens. The amount of work in mining is way higher than is required to prevent another party from being able to overwhelm the Blockchain. It is that high because of the subsidy of the mining reward means if Bitcoin has a high value the reward is worth a lot. This is fac…

> The amount of work in mining is way higher than is required to prevent another party from being able to overwhelm the Blockchain. Isn’t that exactly the point? Bitcoin incentivized wasting resources . It is, according to your own comment, unnecessary to use so much computing to keep bitcoin going. But it’s being used.

The level to be secure is much lower that.

If Bitcoin were worth much less the network would still be secure even though the mining reward would only be enough to pay for a fraction of the current processing.

If Bitcoin does not double in value every four years, the mining reward will reduce in real world terms.

Claiming the mining resources required will be at the current level or higher perpetually requires also making the claim that you think that the value will increase exponentially forever.

Nothing increases exponentially forever.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#218

Post by wafflemaker »

KetoManx64 wrote: post #161
kibwen wrote: post #133

Earlier 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.

Now compare it to the annual energy use for the creation/printing of money and funding of infinite wars due to the Federal Reserve having the ability to print money out of thin air at the cost of future generations.

>Federal Reserve having the ability to print money out of thin air at the cost of future generations.

As a non-American, it's hard not to notice that it's not future generations. It's everyone using dollars.

And since your country will be invaded if you try not using dollars to trade oil, and everyone needs oil (transport, food/fertilizers, medicine synthesis), then it's literally the whole world paying.

Which incentives USA to print money, because they only shoulder a small part of that burden.

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#219

Post by KellyCriterion »

kristjansson wrote: post #193
KellyCriterion wrote: post #163

Earlier quoted context omitted.

Remembering: WTF was quite popular 20 years ago! :) Regarding this story: I guess for most private participants, physical delivery is not possible/excluded

Your guess would be wrong. If you’re trading physically settled commodity futures, and don’t close before the settlement date, you are now the owner of a large quantity of your commodity of choice. It just happened today: https://www.reddit.com/r/wallstreetbets/comments/1siq4m2/any...

Not sure if this is true - there is this Bloomberg evergreen from 2015:

https://www.bloomberg.com/news/articles/2015-11-03/that-time...

How did she not get to buy oil while the reddit guy got it delivered?

And down in your reddit thread someone says: > This is fake but this has happened before years(decades?) ago, hence why brokers added to t&c that they will close out unrolled contracts on your behalf so retards playing oil futes and cfds don't end up having barrels of oil shipped to their nearest port <

Re: Bitcoin miners are losing on every coin produced as difficulty drops

#220

Post by z3c0 »

haakon wrote: post #211
z3c0 wrote: post #136

Earlier quoted context omitted.

I'll throw "proof-of-useful-work" into the ring. Reallocating at least a portion of BTCs verification onto existing energy costs could go a long way. Not suggesting it would be easy or that the entire network would be able to agree on what tasks to use, just that it's a theoretical option.

It's also not simply a matter of agreeing on what tasks to use. The task has to be computationally difficult to perform, but computationally trivial to verify. It must also be verifiable with only the context of the blockchain (no "oracle" that can make claims about real-world events). Primecoin exist(ed?) and used the search for Mersenne prime numbers as its proof-of-work. That was 13 years ago and is still the only…

Well, this list of known PoUW might be of interest: https://www.sciencedirect.com/science/article/pii/S209672092...

While they don't have that many in the wild, the number of implementations it lists is still more than I expected. There's also the Monero 51% takeover, which was purportedly done using a PoUW technique to garner more hashing power.

https://qubic.org/blog-detail/historic-takeover-complete-qub...

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