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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

#81

Post by dllthomas »

tveita wrote: post #14
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.

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 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."

Revenues of Brink's alone, sayeth Google, are roughly $4 billion. My understanding is that a substantive portion of that represents cost of transporting cash and gold, and of course they are only one of several such companies.

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

#82

Post by dllthomas »

VikingCoder wrote: post #65
jacquesm wrote: post #18

Earlier quoted context omitted.

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.

> economies of scale built in. You've chosen a particularly odd phrase here, since BitCoin mining was fundamentally designed to get computationally more expensive over time. So, no, an economy of THE OPPOSITE OF SCALING was built in.

The cost of mining blocks is designed to remain roughly consistent as technology advances. The "economy of scale" comes in when you use one block (which costs about the same regardless) to secure more transactions.

As an aside, "economy of THE OPPOSITE OF SCALING" is probably better termed "diseconomy of scale" (http://en.wikipedia.org/wiki/Diseconomies_of_scale).

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

#83

Post by TeMPOraL »

dllthomas wrote: post #58
thedaveoflife wrote: post #44

Earlier quoted context omitted.

I am not so sure that "transaction security auditing" would be accurate though. That makes it sound like this company is doing something altruistic. The truth is that this facility was created for one simple reason: to earn Bitcoin.

If I go out and hire (say) tptacek (and the rest of Matasano) to perform a software security audit, aren't they're doing it to earn dollars? When a corporate board hires external financial auditor to look over their records, same thing. I don't see where your inference of altruism comes in.

The difference is that tptacek won't claim that he's doing it because he cares about your software; he will say he's doing it to earn money. He will definitely try to do it well to maintain his opinion of a professional, but he won't be pretending he does something altruistic.

I'm not saying doing things for money is inherently bad. I'm just saying, let's call things what they are.

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

#84

Post by dllthomas »

TeMPOraL wrote: post #80
baddox wrote: post #60

Earlier quoted context omitted.

But why is that contradictory, or a problem at all? When I buy a sandwich, I do so primarily because I want the sandwich, but the reason the vendor makes and sells sandwiches isn't to satisfy me, but to make money. Both of us are "selfish" in a sense, but it's not contradictory and not a bad thing.

Sure, but the difference is well pointed out by @thedaveoflife. The sandwitch vendor doesn't care about me being not hungry, and they would gladly switch to selling toilet paper to me if it was more profitable to them. Likewise, the miners don't give a damn about blockchain security. They have this black box - put electicity in, get money out. They don't care about what's going on inside. If the black box produced sa…

But that doesn't change the fact that sandwich makers are making sandwiches and bitcoin miners are securing the block chain. Sandwich makers aren't dollar miners.

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

#85

Post by dllthomas »

TeMPOraL wrote: post #83
dllthomas wrote: post #58

Earlier quoted context omitted.

If I go out and hire (say) tptacek (and the rest of Matasano) to perform a software security audit, aren't they're doing it to earn dollars? When a corporate board hires external financial auditor to look over their records, same thing. I don't see where your inference of altruism comes in.

The difference is that tptacek won't claim that he's doing it because he cares about your software; he will say he's doing it to earn money. He will definitely try to do it well to maintain his opinion of a professional, but he won't be pretending he does something altruistic. I'm not saying doing things for money is inherently bad. I'm just saying, let's call things what they are.

I still don't see where the claim of altruism comes in. We're labelling things for their effects. Matasano secures your software in exchange for dollars. I'm currently making software respond quickly to network events in exchange for dollars. The sandwich vendor makes me a sandwich in exchange for dollars. Calling us all "dollar miners", simply because we're doing it mostly for the dollars, is not really "calling things what they are" - it's a horrendously lossy focus on one particular aspect of "what they are".

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

#86

Post by discardorama »

larrydag wrote: post #9
mlevy wrote: post #2

I'm just curious if anyone has insight into how this is economical. Is it economical with current bitcoin prices, or only if prices go up?

Already been talked about on HN. Estimated around $190K profit per month. https://news.ycombinator.com/item?id=8163934

That does not include the cost of hardware. What kind of hardware do you need for 230 GH/s ?

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

#87

Post by baddox »

TeMPOraL wrote: post #80
baddox wrote: post #60

Earlier quoted context omitted.

But why is that contradictory, or a problem at all? When I buy a sandwich, I do so primarily because I want the sandwich, but the reason the vendor makes and sells sandwiches isn't to satisfy me, but to make money. Both of us are "selfish" in a sense, but it's not contradictory and not a bad thing.

Sure, but the difference is well pointed out by @thedaveoflife. The sandwitch vendor doesn't care about me being not hungry, and they would gladly switch to selling toilet paper to me if it was more profitable to them. Likewise, the miners don't give a damn about blockchain security. They have this black box - put electicity in, get money out. They don't care about what's going on inside. If the black box produced sa…

I still don't see why this is a problem. Even if all the miners don't actually care that they're securing the blockchain, the blockchain still gets secured (assuming there's not a design flaw in Bitcoin, but that's a separate issue).

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

#88

Post by tveita »

latchkey wrote: post #64
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 thought this was a pretty good analysis: https://www.academia.edu/7666373/An_Order-of-Magnitude_Estim... tl;dr: "This means that we can expect our current industry best efficiency of 0.733 W/GH to reach 0.0000000873804 W/GH – so even the most ignorant, arrogant, narrow-minded and pseudo-intellectual critics and arm-chair academics should note that in the event that Bitcoin scales to a million times its current size…

Moore's law is in effect right now, and yet mining keeps getting more expensive.

The exact number of hashes per joule is irrelevant since the work being done isn't useful. This is purely a competition about spending the most. If hashes get 1000 times cheaper, they'll do 1000 times as many.

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

#89

Post by innguest »

JoeAltmaier wrote: post #25
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…

It is a crying shame that all the CO2 is being pissed away to produce imaginary points. What hubris humans have.

The cost of producing dollars is much higher (both in terms of energy waste, and in terms of human rights violations) and it is just as imaginary.

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

#90

Post by jloughry »

TeMPOraL wrote: post #54
baddox wrote: post #51

Earlier quoted context omitted.

I would say it was created for the simple reason of maintaining the security of the blockchain. That's the fundamental idea of Bitcoin: the blockchain is protected in a decntralized manner due to proof of work. The reward is added to incentivize people to help maintain the security of the blockchain.

So in other words, they're doing it for the reward, with a side effect of maintaining security of the blockchain. I doubt that they're doing it for an idea.

It's debatable whether all Bitcoin miners are doing it for the reward, or whether some are doing it for an idea.

On the one hand, I think I'm doing it to help the network, but on the other hand I kept the pitiful few coins I've got thereby, and didn't give them away. Why do I keep Bitcoins? Not as an investment, surely; I think of Bitcoin as more of another currency that I keep some money in all the time, like £ or €, so I can buy stuff when I'm there. But my little Bitcoin mining operation is being run for the purpose of "transaction security auditing" [thanks, qnr!] for the same reason I run a tor exit node: because I want to encourage such things to exist.

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