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Inside One of the World's Largest Bitcoin Mines

thecoinsman.com

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Re: Inside One of the World's Largest Bitcoin Mines

#31

Post by nmjohn »

bunderbunder wrote: post #19
maxmcd wrote: post #6

Earlier quoted context omitted.

More inefficient than producing and maintaining paper currency? Than mining actual gold? They really are just throwing tons of electricity and hardware at "nothing", but if this kind of activity helps replace the current inefficient systems of currency, then I'm all for it.

The vast majority of fiat currency in circulation isn't in the form of banknotes or coins. (Gold isn't really a currency anymore, so let's ignore that one.) It exists electronically. In a fractional-reserve system, it's also mostly created by its users, but that happens as a by-product of normal economic activity. And it takes a lot less computer work per economic transaction for a fractional-reserve system to create…

You are completely ignoring the issue. Just because a majority of money exists electronically doesn't mean a lot of money isn't spent on paper and metal versions.

The United States alone spends tens of millions of dollars a year on producing pennies - beyond the face value of the pennies.

So the entirety spent on mining bitcoin is not too far off from what one country spends just on minting pennies.

Re: Inside One of the World's Largest Bitcoin Mines

#32

Post by nmjohn »

jacquesm wrote: post #23

The scale of this is impressive regardless of whether or not you're a bitcoin believer (I'm neutral, if it works long term, great, if not something better will come along). This bit in particular is impressive: "The mine operators told me that each warehouse took fifteen days to construct, and an additional ten days to fill up with hardware and get it all hashing away. The concrete was still drying on some of the bui…

> I wonder who supplied the chips that do the mining and how much energy that facility uses.

Probably part of the reason this is in china - close to the factories where the majority are produced. The owner could walk into a chip manufacturer and make a much better offer than the cost of exporting and packing them to ship internationally.

Re: Inside One of the World's Largest Bitcoin Mines

#33

Post by jordigh »

qnr wrote: post #22
CatsoCatsoCatso wrote: post #3

This just strikes me as a colossal waste of energy & time. I understand that there may be good profit in doing it, but that doesn't shirk off any of my feelings.

I blame Satoshi for choosing the unfortunate word "mining" as the name of the technical process that confirms bitcoin transactions. I feel it is responsible for a big part of the scammy reputation Bitcoin has today. If only it was called something like "transaction security auditing" or "ledger integrity verification" so that people would take it more seriously for what it really is.

I call it "accounting". Some day, when bitcoins can no longer be mined, all of the "miners" will just be accountants collecting accounting fees and ensuring the integrity of the blockchain.

Re: Inside One of the World's Largest Bitcoin Mines

#35

Post by gwern »

> They keep the machines cool with an evaporative cooling system. Its basically a durable paper product that looks like the wavy corrugated part on the inside of cardboard. Water is pumped to the top and flows down, and the fans blowing outwards on the other side create negative air pressure, drawing fresh air through the holes and cooling it.

The cardboard cooling system looks pretty interesting, but I wonder how durable it is: cardboard which is constantly wet doesn't sound like it'll last too long.

Re: Inside One of the World's Largest Bitcoin Mines

#36

Post by chaostheory »

CatsoCatsoCatso wrote: post #3

This just strikes me as a colossal waste of energy & time. I understand that there may be good profit in doing it, but that doesn't shirk off any of my feelings.

It'd be less of a waste if it was at least running some solar panels

Re: Inside One of the World's Largest Bitcoin Mines

#37

Post by pat2man »

billyhoffman wrote: post #29
lutusp wrote: post #20

Earlier quoted context omitted.

> Given the application of new primes is far less than, say, sending humans to live on the mars ... Yes, but researching primes is way, way less expensive than sending humans to the Red Planet. It's all about cost versus benefit. As one example, some mathematicians think the Riemann Zeta function might reveal something basic about primes, and if so, it would be well worth our time spent studying it, and primes in gen…

I get what you are saying. And I think primes research may be a good thing. But to say, all the heat and power and physical hardware waste of Bitcoin/altcoin mining is offset even somewhat by the helping primes research is kind of silly. I could say that my handling and use of physical dollar bills could help microbiologists understand how organisms can spread. Technically true, but of dubious value at best.

Well it all depends on whether someone out there is trying to solve prime numbers on a computer already. If so we kill two birds with one stone.

Re: Inside One of the World's Largest Bitcoin Mines

#38

Post by thedaveoflife »

CatsoCatsoCatso wrote: post #3

This just strikes me as a colossal waste of energy & time. I understand that there may be good profit in doing it, but that doesn't shirk off any of my feelings.

Would you say that mining gold/diamonds is also a colossal waste of time and energy?

Re: Inside One of the World's Largest Bitcoin Mines

#39

Post by danielweber »

jacquesm wrote: post #18
tveita wrote: post #14

Earlier quoted context omitted.

Yes? Going either by volume or number of transaction, Bitcoin transactions are currently ludicrously expensive, though this is somewhat hidden by subsidizing the miners. I don't know why you mention paper currencies and gold when most money today is transferred electronically, in a far more efficient way than Bitcoins.

I'm not sure if by the time you factor in all the costs of banking (including bail-outs) bitcoin is still ludicrously expensive. And one block will include a whole slew of transactions, that's fixed overhead with economies of scale built in.

Purely in an accounting sense, the bailouts are not a negative, since the government made money on Wall Street bailouts.

(If you wish to say they encourage unhealthy behavior, that's another argument.)

Re: Inside One of the World's Largest Bitcoin Mines

#40

Post by [deleted] »

joosters wrote: post #26
bdonlan wrote: post #21

Earlier quoted context omitted.

The problem with this is that mining isn't just about reporting hash rates, it's a critical part of the Byzantine failure tolerant consensus algorithm that was bitcoin's key contribution. If miners had a lower duty cycle as you suggest, any dishonest miner could execute a majority attack with little resistance, absent some other kind of mitigation. While proofs of work are wasteful, the only alternative I know of is…

You could keep the blockchain and run with vastly reduced difficulty, but with one alteration: the next block needs to include a specific magic secret number. This magic key is unknowable in advance of a specific time, preventing workers from doing the hash work until the key is 'published'. This forces the miners to pause and not do any hashing for a set time. Now, this gets to the real issue: We need a source for t…

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