Bitcoin's mining difficulty has increased by 41.9% over the last 30 days • Hacker News Board

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#231

Post by CyberDildonics » Tue, Dec 22, 2015, 4:05 PM UTC

davidgerard wrote: post #199

BlackFly wrote: post #167

Earlier quoted context omitted.

Actually that 1% normally will go to paying the electricity bills for the bank back end systems and the fraud analysis algorithms. On top of that they need to pay for fraud insurance. The power spent on bitcoin is not analogous to these costs, it is equivalent. The question is, is bitcoin more cost effective at preventing specific types of fraud?

Evidently not the types that actually happen in the Bitcoin space, all of which have as their root cause "no chargebacks": if someone picks your pocket from the other side of the planet, you have no recourse.

Like the president of Moldova who laundered a billion dollars out of the country?

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#232

Post by CyberDildonics » Tue, Dec 22, 2015, 4:15 PM UTC

gritzko wrote: post #105

CyberDildonics wrote: post #87

Earlier quoted context omitted.

> How would bitcoin's power consumption stack up if it were tasked with servicing tens of millions of transactions per second? It would stay almost the same since the hashing power is not connected to the number of transactions. Also by the way, no one does tens of millions of transactions per second, visa does something like 40,000 at their absolute peak.

No, no, no. The amount of power wasted by BitCoin indirectly depends on the monetary turnover of the system. Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done. Hence, the power wasted is proportional to the turnover of the system. Otherwise, it does not work. Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people b…

You seem adamant about something that you clearly do not understand.

> Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done.

Then why hasn't it been done? The answer is that bitcoin doesn't even remotely work like this. You would have to sign a transaction, then double spend it to yourself, then BY CHANCE mine enough blocks to satisfy the person giving you whatever you are buying before they see the double spend.

That is not going to happen. Someone receiving a million dollars will not give over a briefcase of cash the second they see the transaction, and that's the only way something like this would work. If you are taking money out of an exchange, the exchange would never even credit your account, let alone send you money. They would see the double spend transaction and if by some chance (0.015625%) you managed to mine the next 6 blocks or so, they would just wait longer since there is a double spend out there. By the time they might actually send you money, the chances of you mining all the blocks up until that time is practically zero. So you would then be gambling your million dollars against enormous odds.

You might not want to believe that bitcoin works, and it might seem counter intuitive that the proof of work is important and useful, but this isn't about how you wish the world works, it is about how the world ACTUALLY works, and that is why bitcoin actually works.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#233

Post by CyberDildonics » Tue, Dec 22, 2015, 4:18 PM UTC

woah wrote: post #134

CyberDildonics wrote: post #85

Earlier quoted context omitted.

It does specifically because it increases the barrier to entry. This means the likelyhood of an attack is lower and the cost of an attack is higher. If your Rasberry PI ledger had a market cap of multiple billions of dollars, the likelyhood of an attack that would either steal people's money or shut it down would be pretty much %100.

increases the barrier to entry === centralization

There are many shades of grey. It creates some centralization, thought incentives of the miners are still aligned with the incentives of the people using the currency.

You seem to be implying total centralization, which is not at all true.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#234

Post by scotty79 » Tue, Dec 22, 2015, 4:50 PM UTC

gritzko wrote: post #105

CyberDildonics wrote: post #87

Earlier quoted context omitted.

> How would bitcoin's power consumption stack up if it were tasked with servicing tens of millions of transactions per second? It would stay almost the same since the hashing power is not connected to the number of transactions. Also by the way, no one does tens of millions of transactions per second, visa does something like 40,000 at their absolute peak.

No, no, no. The amount of power wasted by BitCoin indirectly depends on the monetary turnover of the system. Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done. Hence, the power wasted is proportional to the turnover of the system. Otherwise, it does not work. Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people b…

> Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people buy food.

So basically they are paying bunch of people to live and consume without doing anything useful. How much power wasted is that? How do you know how much wasted day of human life costs?

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#235

Post by bryanbuckley » Tue, Dec 22, 2015, 4:58 PM UTC

mootothemax wrote: post #219

fla wrote: post #216

Earlier quoted context omitted.

Yes but in practice you can't convert that much BTC into USD that quickly.

>Yes but in practice you can't convert that much BTC into USD that quickly. Would they even need to convert BTC into USD? Even ignoring the obvious opportunities for shorting an entire economy? I mean, I'm kinda curious to know what effects they could cause by e.g. choosing to mine zero-block transactions for a few days.

I thought miners already try to mine zero block transactions first, then add in fee transactions? apparently you can chew through the nonce really fast..

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#236

Post by gritzko » Tue, Dec 22, 2015, 4:59 PM UTC

CyberDildonics wrote: post #232

gritzko wrote: post #105

Earlier quoted context omitted.

No, no, no. The amount of power wasted by BitCoin indirectly depends on the monetary turnover of the system. Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done. Hence, the power wasted is proportional to the turnover of the system. Otherwise, it does not work. Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people b…

You seem adamant about something that you clearly do not understand. > Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done. Then why hasn't it been done? The answer is that bitcoin doesn't even remotely work like this. You would have to sign a transaction, then double spend it to yourself, then BY CHANCE mine enough blocks to satisfy the person giving you whatever…

You are focusing on a single scenario of an individual double-spender. Why don't you consider some other scenario, e.g. a hacker getting control of a major BitCoin mining facility to disrupt things just for a laugh? I've seen a lot of that happening. There are tens of possible scenarios. Mining capacity is highly centralized these days and that trend will likely develop further (see the subj). The mental model of "one malicious node against all the honest nodes" is totally bogus.

So far, my observation is that BitCoin can't run cheaply on the reasons already mentioned. I will only buy your argument if you'll show me a graph of power consumption vs turnover and it will happen to be sub-linear.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#237

Post by jgalt212 » Tue, Dec 22, 2015, 5:04 PM UTC

ikeboy wrote: post #227

jgalt212 wrote: post #218

Earlier quoted context omitted.

Bitcoin is not anonymous. The entire ledger history is exposed. Through network analysis you can figure out who the original anonymous holder is. And as soon as that holder tries to convert to a fiat currency their identity will be exposed. It's precisely because Bitcoin is way more traceable than cash, the US government has not tried to shut it down despite a lot illegal activity being paid for via bitcoin. As soon…

This is wrong. Plenty of people have converted to fiat and not been caught, there are ways of mixing coins.

Actually, we're both wrong. Just because you have not been caught does not mean there hasn't been loss of anonymity. And if you mix enough coins you can decrease the chances of being pinpointed exactly as the source, but you cannot definitively remove yourself from the bucket of suspects.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#238

Post by gritzko » Tue, Dec 22, 2015, 5:08 PM UTC

scotty79 wrote: post #234

gritzko wrote: post #105

Earlier quoted context omitted.

No, no, no. The amount of power wasted by BitCoin indirectly depends on the monetary turnover of the system. Because if somebody can spend $1mln to perform 51% attack and move around $1bln, that will likely be done. Hence, the power wasted is proportional to the turnover of the system. Otherwise, it does not work. Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people b…

> Also, when a bank charges me 1% for a wire transfer, they pay salaries from that money and some people buy food. So basically they are paying bunch of people to live and consume without doing anything useful. How much power wasted is that? How do you know how much wasted day of human life costs?

I just had some issues with my Dutch bank because they totally switch to the model of "mobile client + internet + paper letter once a year". They deprecate walk-in procedures. They close branches. I did not visit them for 5 years and I would not visit them for another 5, but something happened, so I had to.

My Russian bank is mobile+internet from day 1. They have no branches. They don't even have their own ATMs.

I am not sure what is the current trend in US, but my personal experience certainly contradicts your thesis.

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#239

Post by saurik » Tue, Dec 22, 2015, 5:09 PM UTC

iofj wrote: post #137

sowbug wrote: post #82

Earlier quoted context omitted.

Malice isn't enough. The only special power of a 50% miner is to consistently resolve double-spend attempts in its favor. If this happened, it would surely lower the value of Bitcoin. This, an attacker must be not just malicious but also irrational enough to forfeit the $800,000 in Bitcoin that it creates daily by virtue of its 50% control of the network. (6 blocks/hour x 24 hours/day x 25 bitcoin/block x $450/bitcoi…

Not true. A malicious 50% miner can cancel any transaction it wants, not just fix doublespend. Assuming the transaction was sufficiently recent (the more hash power they have the more such a transaction can be in the past). So they can "unspend" their own bitcoins, as follows : use 51% of your hash power to create a parallel blockchain, which is not published. Include all transactions, except the one you used to buy…

The attack you just described is semantically identical to a "double spend".

Re: Bitcoin's mining difficulty has increased by 41.9% over the last 30 days

#240

Post by ikeboy » Tue, Dec 22, 2015, 5:15 PM UTC

jgalt212 wrote: post #237

ikeboy wrote: post #227

Earlier quoted context omitted.

This is wrong. Plenty of people have converted to fiat and not been caught, there are ways of mixing coins.

Actually, we're both wrong. Just because you have not been caught does not mean there hasn't been loss of anonymity. And if you mix enough coins you can decrease the chances of being pinpointed exactly as the source, but you cannot definitively remove yourself from the bucket of suspects.

>And if you mix enough coins you can decrease the chances of being pinpointed exactly as the source, but you cannot definitively remove yourself from the bucket of suspects.

Not in my understanding. I have some coins X that are tainted. I send them to you, Y. You, Y, happen to have other coins completely unrelated to the address I sent my X coins to, and you send them to me at address Z. There's no blockchain link between X and Z.

I suppose physically tracking you down, assuming you keep logs, could hurt me, but if I trust you not to keep logs then I'm safe after you delete the logs.