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

#91

Post by pmorici » Tue, Dec 22, 2015, 2:46 AM UTC

dopamean wrote: post #46

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…

Could you translate some of that into an estimate of X coins mined per day and Y kwh used per day? Thanks.

The best way to think about the mining market is that the number of Bitcoins available to be mined each day is _constant_* no matter what the total hashing power deployed is. As a miner your share of that fixed pool of available coins is determined by your hashing power relative to the overall hashing power of all miners. So if you control 30% of the hashing power you should on average get 30% of the coins mined each day. Your profits are then determined by your costs and the value of a bitcoin when converted to the currency your costs are denominated in.

* The constant amount actually changes periodically when the coinbase reward is adjusted downward but that only happens about once every 4 years and historically exchange rate price appreciation has outstripped the reduced coinbase mining rewards. eventually the coinbase reward will go to zero and the number of coins that go to miners each day will be their relative share of the total fees being paid by users transacting on the network. Miners choose which transactions to include in a mined block so in the future a large miner may have some pricing power over transactions because they could refuse to process any transaction with a fee that falls below some threshold.

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

#92

Post by CyberDildonics » Tue, Dec 22, 2015, 2:47 AM UTC

jonknee wrote: post #11

austinjp wrote: post #6

Earlier quoted context omitted.

What happens when we reach 100%?

We re-learn why a deflationary currency is an awful idea.

Like precious metals? Deflationary currencies have been used successfully for over 1000 years.

The only people it is bad for are governments. Throughout history there is a patter of promising, spending, and becoming insolvent.

The idea that an individual wouldn't choose a deflationary currency is ludicrous. Inflationary currencies are what you want everyone else to use.

And by the way, the cat is out of the bag. Cryptocurrencies are here, bitcoin or not. When people can choose to use any currency they want, will they choose one that inflates? I doubt it.

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

#93

Post by neurotech1 » Tue, Dec 22, 2015, 2:51 AM UTC

burger_moon wrote: post #73

elorant wrote: post #58

Earlier quoted context omitted.

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.

After searching around, it looks about average for a large data center. This link[1] estimates Google's data centers require between 50-100MW. 50MW is enough power to supply ~14k homes from different references I've seen. I'm curious about what normal data centers use for backup power since natural gas and diesel generators don't get much bigger than 2MW. Or maybe they just don't have backup generators. [1] http://ww…

They do. Natural Gas fueled generators are practical at 50MW capacity. GE basically sells a 747 engine (CF6) driving a generator, known as the LMS6000

[0] https://en.wikipedia.org/wiki/General_Electric_LM6000

[1] http://www.geaviation.com/marine/engines/military/lm6000/

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

#94

Post by justin2004 » Tue, Dec 22, 2015, 2:51 AM UTC

homogeneous wrote: post #54

nemild wrote: post #30

Earlier quoted context omitted.

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 soci…

>most of the power consumed by the traditional financial system is spent in its capacity as a ubiquitous pillar of modern society

Either I missed your point or it would be nice if you brought this back down to Earth. Yes, traditional ledgers help mediate economic exchanges. Bitcoin, as a ledger system, also helps mediate economic exchanges.

> ... wherein bitcoin would be completely subsumed were it to become anything more than a technical novelty.

You put this forward like we should all nod and say of course. Care to tell us about this scenario?

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

#95

Post by LAMike » Tue, Dec 22, 2015, 2:51 AM UTC

Once the 16nm chips become a commodity, it will make sense that the hashing power would get more distributed.

I hope figures out how to get a solar powered, interchangeable bitcoin miner in a box at a positive ROI. It may seem impossible now, but solar prices are falling faster than expected.

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

#96

Post by feelix » Tue, Dec 22, 2015, 2:51 AM UTC

jacquesm wrote: post #47

keyle wrote: post #39

Earlier quoted context omitted.

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.

It's a race to the bottom. It will end with the party that manages to just win that race by making the smallest profit possible at the highest efficiency of Joules per hash computed. Bitcoin is interesting for many reasons, the real-world effects of a couple of configuration settings and some cleverly picked auto-scaling parameters are immense. The number of orders of magnitude that the protocol has survived with min…

Anywhere in the USA who has to pay USA power prices is going to be at a disadvantage by that alone then. It would seem that locating the hashing equipment to the place with the cheapest power possible would be a logical step when things start to get cut that fine. Unless that could be overcome with clever usage of naturally generated local power (such as solar power).

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

#97

Post by CyberDildonics » Tue, Dec 22, 2015, 2:51 AM UTC

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.

It might seem mildly useful until you realize why bitcoin, gold, or fiat currencies all have value - their properties lining up with the properties of ideal money. Gold is not valuable because of jewlery or industrial uses. It is valuable because it was the original decentralized shared ledger. Easy to verify, easy to divide, hard to create, hard to destroy (and some more if you look it up).

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

#98

Post by CyberDildonics » Tue, Dec 22, 2015, 2:53 AM UTC

mjevans wrote: post #65

jnbiche wrote: post #45

Earlier quoted context omitted.

Proof of work is the most secure way we have by far of running a decentralized currency. I am hopeful that a better, more energy-efficient method will be developed, but until then, I think advancing the state of the art is worth the energy cost. It's not obscene to me that a truly global currency, that is decentralized and not controlled by any government, would cost a tenth of the energy output of a modest-sized pow…

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…

I will tell you what I tell everyone who says the same thing:

You are free to create that proof of work system and you can see who buys your coin.

Now, if you piggy back on something people are already doing, then you might have something.

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

#99

Post by cgjaro » Tue, Dec 22, 2015, 2:54 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.

This DC cost $100 million. Not exactly pocket change. http://www.coindesk.com/bitfury-details-100-million-georgia-...

Plus, with BitFury online, the cost of a 51% attack just raised to $200 million.

The only reason it is (currently, for a short time) hypothetically possible to 51%-attack the network with a budget in the low hundreds of million of dollars is because most of the miners are not using such efficient 16 nm chips. As the market migrate to these last generation chips, expect the cost to increase to $1+ billion in the next year.

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

#100

Post by crm416 » Tue, Dec 22, 2015, 2:54 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…

It's not necessarily 'irrational'. A 51% miner could profit from Bitcoin's downfall, or by threatening others, or even by bluffing an attack. See, e.g., the Goldfinger Attack in https://www.cs.princeton.edu/~kroll/papers/weis13_bitcoin.pd....