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

#81

Post by craigyk » Tue, Dec 22, 2015, 2:32 AM UTC

sanswork wrote: post #56

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.

At any point since bitcoin's inception there have been plenty of major govts that could have easily afforded the resources to pull off a 51% attack.

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

#82

Post by sowbug » Tue, Dec 22, 2015, 2:34 AM UTC

sanswork wrote: post #56

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.

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/bitcoin x 50%)

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

#83

Post by SolarNet » Tue, Dec 22, 2015, 2:34 AM UTC

homogeneous wrote: post #64

urbanarson wrote: post #59

Earlier quoted context omitted.

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.

You're comparing the microscopic bitcoin economy to the financial infrastructure that services the entire planet; it's a ridiculous comparison. How would bitcoin's power consumption stack up if it were tasked with servicing tens of millions of transactions per second?

Well a miner like the one going live is also responsible for managing the transaction volume. So the capacity of Bitcoin to manage many more transactions just went up.

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

#84

Post by MikeNomad » Tue, Dec 22, 2015, 2:36 AM UTC

phoogathrw wrote: post #78

mjevans wrote: post #65

Earlier quoted context omitted.

That's my main issue with bitcoins (aside from how they're marketed to anyone; it is most definitely NOT anonymous!). Instead of 'proof of work' it should require actual, /useful/ work. I think it should be a mix of work /types/ to promote general purpose computing, instead of ASICs. Imagine if a comity decided, and the owners of existing coins voted on, what work was worthy of being included. Folding proteins for me…

Ok, yeah that would be nice. But no one has figured out how to securely do productive work for proof of work. In fact, there are pretty good reasons to believe that it may even be impossible to create a secure yet productive proof of work algorithm.

It almost sounds like you are talking about something like SETI@Home...

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

#85

Post by CyberDildonics » Tue, Dec 22, 2015, 2:38 AM UTC

woah wrote: post #33

escherize wrote: post #9

Earlier quoted context omitted.

... by simultaneously facilitating a large ratio of bitcoin's infrastructure.

Not 100% sure, but from your tone it sounds like you think they are performing some kind of service. This is not true. Miners do not increase the number of transactions the network can handle. An infinitesimal amount of the electricity going into mining is actually goes to process transactions. A raspberry pi in a shoebox running mySql is capable of processing more transactions than the entire bitcoin network, liquid…

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.

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

#86

Post by brianpgordon » Tue, Dec 22, 2015, 2:39 AM UTC

jegutman wrote: post #40

An interesting though exercise: Does the new capacity make a bitcoin more valuable or less valuable? Intuitively seems like more valuable, but the average cost in energy to mine the marginal block has gone down (otherwise the new miner wouldn't be mining) and that's often though of as the floor on BTC value. Seems like having a stronger network is a net plus, and since they're probably not near the 50%+1 threshold it…

There's an interesting book on the economic underpinnings of Bitcoin-

https://s3-us-west-2.amazonaws.com/chainbook/The+Anatomy+of+...

> we now know that there is a near precise model that describes the cost of running and maintaining the network. The way the cost estimate is determined is through how Bitcoin acts as a decentralized waste heat creator that activates and deactivates heat generation based on market participation and pricing signals. What do the randomizations necessary for cryptography and the waste heat produced by computing devices have in common? One word: “exergy,” a term of art describing the maximum useful work possible during a process that brings a system into equilibrium with a heat reservoir. Exergy is always destroyed in the seigniorage hashing process - for example - if a token's value increases to $1,000, this means that at most $1,000 worth of waste heat will be generated somewhere in its creation.

From my reading of the text, it's not so much the additional hash power that's valuable, it's the additional money spent building and operating the ASICs. In theory, the market cap of a proof-of-work system should approach its total cumulative cost to secure. The more watts you see being dumped into the environment calculating hashes, the more you should value Bitcoin.

If Bitcoin is worth less than its cost to mine, no rational miner will mine (if they want BTC they'll just use their electricity budget to buy it on the market), so the competition (and therefore the cost) to mine each block goes down. If Bitcoin is worth more than its cost to mine, mining becomes profitable to anyone willing to put up the capex, so the competition (and therefore the cost) to mine each block goes up. There's an equilibrium where the value of Bitcoin is equal to its cost to mine.

The actual price of bitcoin as seen by the average consumer is insulated from the cost to mine because of effects like speculation, perceived future movement, and the value provided by ease of spending / anonymity, so the economic theory isn't really accurate, but that's why it's a theory!

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

#87

Post by CyberDildonics » Tue, Dec 22, 2015, 2:40 AM UTC

homogeneous wrote: post #64

urbanarson wrote: post #59

Earlier quoted context omitted.

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.

You're comparing the microscopic bitcoin economy to the financial infrastructure that services the entire planet; it's a ridiculous comparison. How would bitcoin's power consumption stack up if it were tasked with servicing tens of millions of transactions per second?

> 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.

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

#88

Post by sanswork » Tue, Dec 22, 2015, 2:41 AM UTC

sowbug wrote: post #82

sanswork wrote: post #56

Earlier quoted context omitted.

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.

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…

Short first hope the exchanges don't fold and run it into the ground with double spends. Alternatively just attack it because you feel scared about it but I do t believe anyone in power is since it is not going anywhere

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

#89

Post by sanswork » Tue, Dec 22, 2015, 2:42 AM UTC

craigyk wrote: post #81

sanswork wrote: post #56

Earlier quoted context omitted.

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.

At any point since bitcoin's inception there have been plenty of major govts that could have easily afforded the resources to pull off a 51% attack.

And now a single company can. Progress!

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

#90

Post by CyberDildonics » Tue, Dec 22, 2015, 2:42 AM UTC

tveita wrote: post #75

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.

Only by as much as the miners themselves spend. And it's a running cost, you have to spend it every day, while an attacker would spend it only during their attack. The only way to make a 51% attack impractically expensive is to make the network impractically expensive to run.

That would only make sense if you could somehow rent 51% of the hashrate, which isn't remotely true.