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

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

#51

Post by lifthrasiir »

keyle wrote: post #39
mrb wrote: post #26

Nobody on HN pointed out who is behind the increase... This is BitFury who just launched a 40 megawatt data center filled up with their new 16 nm chips which reportedly achieve approximately 0.06 joule per gigahash. They also use immersion cooling which gives them an insane PUE of 1.02. So the mining capacity of this DC alone is ~650 Phash/s! We saw an increase of ~200 Phash/s in the last 30 days, so presumably they…

Are those crazy jargon words meant to translate to $ ? If so, is it profitable? Sounds like they've just cut their lunch by 40% too.

Right at the moment the current hashrate is 723 Phash/s, so BitFury hashing at 200 Phash/s rate would get ~28% [1] of the newly generated bitcoin in average, i.e. 0.277 * 144 [block/day] * 25 [BTC/block] ~= 996 [BTC/day]. (Assumes that the difficulty approximately keeps up with the hashrate, which seems to be fine to me.) That translates to more than 400,000 USD per day if BitFury manages to sell them at the current price (highly unlikely) without disrupting the market (impossible at all), but yeah, that gives the rough order of magnitude.

[1] This also means that putting 650 Phash/s gigs into the network is not as profitable as it seems, since it will double (55%) the ratio while three times more expensive (if it linearly scales).

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

#52

Post by baddox »

jonknee wrote: post #22
andys627 wrote: post #16

Earlier quoted context omitted.

ELI5 por favor

http://www.economist.com/blogs/freeexchange/2014/04/money Essentially, if you think that a currency will be worth more tomorrow than it is today there is little reason for investment (or even spending!). It quickly becomes a spiral where no one wants to spend. Inflation provides a nice kick in the pants for people to put their money to good use. This isn't a concern yet for Bitcoin because in the scheme of world econ…

I'm no economist, but it seems like a lot of things (most, by dollar amount) I buy are simply not things I could feasibly defer for long. Food and rent (shelter) are the obvious examples by necessity, but also plenty of discretionary spending is obviously time-sensitive. I want to see a movie now, go skiing now, fly home for the holidays now, etc. It's unlikely that deflation stop me from making these purchases, unless it was some guaranteed short-term high-percentage deflation.

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

#53

Post by narrator »

jonknee wrote: post #22
andys627 wrote: post #16

Earlier quoted context omitted.

ELI5 por favor

http://www.economist.com/blogs/freeexchange/2014/04/money Essentially, if you think that a currency will be worth more tomorrow than it is today there is little reason for investment (or even spending!). It quickly becomes a spiral where no one wants to spend. Inflation provides a nice kick in the pants for people to put their money to good use. This isn't a concern yet for Bitcoin because in the scheme of world econ…

As a counterpoint, you should consider Hayek's critique of the Paradox of Savings:

https://mises.org/library/hayek-paradox-saving

The "deflation makes people not spend" is a hand-wavy argument. There is zero empirical evidence for it.

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

#54

Post by homogeneous »

nemild wrote: post #30
forrestthewoods wrote: post #29

Bitcoin feels a bit like the gold standard. Massive mining operations dumping huge volumes of resources and energy to acquire some thing that is only mildly useful. It seems quite wasteful.

There's a pretty good writeup about this issue in the Stanford/Princeton Cryptocurrency Class: https://drive.google.com/uc?id=0B4-bDFu_72Beelkxd3VlbXoyd0E&... Excerpt: According to our estimates then, the whole Bitcoin network is consuming maybe 10% of a large power plant’s worth of electricity. Although this is not an insignificant amount of power, it's not yet a large amount of electricity compared to all the other…

>Any payment system requires energy and electricity. With traditional currency, lots of energy is consumed guarding and moving gold bullions around

Whenever the topic of bitcoin's inherent wastefulness is discussed, someone always brings up this point, but it's a fallacious comparison because most of the power consumed by the traditional financial system is spent in its capacity as a ubiquitous pillar of modern society, wherein bitcoin would be completely subsumed were it to become anything more than a technical novelty.

Even when you subtract the common denominator that represents the vast majority of the world's financial intuitions, bitcoin is still the only currency that burns resources as a function of its circulation.

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

#55

Post by feral »

fosk wrote: post #42
feral wrote: post #37

Earlier quoted context omitted.

>Innovation in mining hardware and data centers does not in any way increase bitcoin's security. Not sure exactly what you mean here - mining, and mining faster, generally increases the computational resources another third party would need to 51% attack the network.

Is there any possibility that they could themselves attack the network?

Anyone with enough compute can attack the network in this way. There's various scenarios depending on how much compute the attacker has, but in general as they approach 51% of the network's compute, they can start to reliably do double-spending attacks.

But, and this is arguably one of the cleverest parts of Bitcoin's design: Who is going to get all that compute setup to mine Bitcoin, and then break the very system that makes it worth having?

Not saying there couldn't ever be scenarios where it happens, but its a pretty good first deterrent to bad behavior - and its clearly intentional, mentioned in the original Bitcoin paper:

"If a greedy attacker is able to assemble more CPU power than all the honest nodes, he would have to choose between using it to defraud people by stealing back his payments, or using it to generate new coins. He ought to find it more profitable to play by the rules, such rules that favour him with more new coins than everyone else combined, than to undermine the system and the validity of his own wealth."

In some ways, the existence of custom mining hardware is a bad thing, by reducing the spread of participants who can mine cost-effectively - essentially un-democratising the running of the system. But on the other hand, its meant that an attacker has to invest in a lot of special-purpose hardware to attack the system (rather than just being able to e.g. rent enough EC2 nodes, or turn their entire government's cluster against Bitcoin, or whatever); which probably increases the cost of (then) destroying the system, and makes Satoshi's original Incentive argument stronger, imo.

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

#56

Post by sanswork »

mrb wrote: post #26

Nobody on HN pointed out who is behind the increase... This is BitFury who just launched a 40 megawatt data center filled up with their new 16 nm chips which reportedly achieve approximately 0.06 joule per gigahash. They also use immersion cooling which gives them an insane PUE of 1.02. So the mining capacity of this DC alone is ~650 Phash/s! We saw an increase of ~200 Phash/s in the last 30 days, so presumably they…

So less than half of one datacentre entirely owned by one company is enough to commit a 51% attack. I get that they say they are going to work on distribution these chips to ensure they don't end up in that position but let's be honest they just destroyed any claim that the network is powerful enough to avoid malicious control by one miner now. They've not even raised that much money.

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

#57

Post by CookieMon »

fosk wrote: post #42
feral wrote: post #37

Earlier quoted context omitted.

>Innovation in mining hardware and data centers does not in any way increase bitcoin's security. Not sure exactly what you mean here - mining, and mining faster, generally increases the computational resources another third party would need to 51% attack the network.

Is there any possibility that they could themselves attack the network?

If they wanted to torpedo the price, get routed around, and lose all that capital investment in 16nm mining fabrication. Bitcoin was designed so that attacking the network will be less profitable than joining it.

But I can imagine scenarios where its game theory might not hold - because "profitable" is measured in bitcoins. For example, Bitcoin might not be suitable for use as a reserve currency if doing so would create "political profit" for destablising bitcoin that might exceed the monetary cost.

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

#58

Post by elorant »

mrb wrote: post #26

Nobody on HN pointed out who is behind the increase... This is BitFury who just launched a 40 megawatt data center filled up with their new 16 nm chips which reportedly achieve approximately 0.06 joule per gigahash. They also use immersion cooling which gives them an insane PUE of 1.02. So the mining capacity of this DC alone is ~650 Phash/s! We saw an increase of ~200 Phash/s in the last 30 days, so presumably they…

How those 40 megawatts of energy consumption compare to known companies? How much energy for example consumes an average cloud storage company? Or a corporation? 40 megawatts sound a lot but it would be nice to have a reference.

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

#59

Post by urbanarson »

twic wrote: post #28
mwilcox wrote: post #7

https://www.businesswire.com/news/home/20151211005837/en/Bit...

40MW! For bitcoin! This is nuts!

For comparison, how much power does Visa, Mastercard, the Federal Reserve (and its printing presses), banks, and all of the buildings and employees that work in the traditional financial sector use? Now think about that in every single country on this planet. It's a lot more than 40MW. The Bitcoin network is a steal by comparison.

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

#60

Post by vezzy-fnord »

crdoconnor wrote: post #50
vezzy-fnord wrote: post #36

Earlier quoted context omitted.

Deflationary spirals are a hypothetical concern and mostly a fringe neo-Fisherian idea that has recently gained some mainstream nodding, but is otherwise difficult to verify in any way. For one thing it assumes a massive collective irrationality where people's expectations are all rendered berserk and plunged into a negative time preference. It's a very tough gambit to make that people can withdraw their propensity t…

>For one thing it assumes a massive collective irrationality where people's expectations are all rendered berserk and plunged into a negative time preference. One of the more idiotic ideas to come out of neoclassical economics is the assumption that a negative time preference is irrational or impossible, when most of us have one (pension, passing wealth on to one's kids, saving up to buy big ticket items, etc.). Inde…

I am uncertain as to why you imply that a) I think a negative time preference is irrational or impossible apodictically, b) that the former is necessarily a neoclassical idea when the neoclassical synthesis in fact eschews it, c) that there is a natural rate of time preference, d) that time preferences do not differ per subjective valuations and units of goods on an individual scale, or that they are not dynamic, and e) that to respond to the assertion that deflationary spirals are unrealistic in presupposing a fixed natural rate of negative time preference with the opposite straw man idea of extremely high time preferences that favor immediate consumption is a convincing line of argument (indeed, the latter cannot be true for it would make capital investment an impossibility).

The three activities you list in parentheses apply only for those goods, and do not even imply a negative time preference. Saving doesn't have to be a result of negativity at all, per se.

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