10 ms·

"Bitcoin Unlimited" has no maximum block size, hence the name. There are many problems which arise from unbounded transaction rates in Bitcoin. The most funda

by tdryja 11y ago

"Bitcoin Unlimited" has no maximum block size, hence the name. There are many problems which arise from unbounded transaction rates in Bitcoin. The most fundamental is that long term the coinbase reward is zero, and transaction fees are the only reason to create new blocks. Without artificial scarcity of block space (artificial in the sense of beyond what hardware can support) transaction fees would tend to zero, and mining would no longer generate revenue. LN is proposed to allow many users and many transactions (when nodes cooperate) while keeping the security properties of Bitcoin (when nodes don't).

freework 11y ago
Mining does not need to be profitable. People always make the mistake in thinking that if mining ceases to be profitable that mining would suddenly stop. That is simply not how it works. It is more economical to buy tomatoes at the grocery store, but that doesn't stop people from growing tomatoes in their backyard.
- maaku 11y ago
  Mining costs millions of dollars per day in electricity costs. I guess we can just expect a few people to burn a hole in their pocket for the good of the network?
  - Taek 11y ago
    Sorry to be pedantic, but I do believe the daily cost of mining is closer to $250,000 - $750,000. Not a small number, but also not millions per day.
    - maaku 11y ago
      I'm a physicist so naturally I do all back-of-the-envelope calculations to one-significant figure with rounding at each step. :) My own estimation is between $400k per day (hard lower bound) and $800k per day depending on assumptions about hardware efficiency, although around $100k / day was added in the last week in a trend that is continuing, so $1MM/day will very quickly be accurate.
  - deleted 11y ago
    [deleted]
  - aback 11y ago
    This reflects a misunderstanding of the drivers of mining costs. Mining only costs a lot because coin value is high and the block reward is high. This means miners are willing to spend more to win the reward. As the block reward lowers then mining becomes funded entirely by equilibrium-priced fees.
    - maaku 11y ago
      Oh I understand mining economics quite well. The comment I was responding to however claims that some people will continue to mine at a loss after the subsidy is negligible. However that assumes that people would be willing lose hundreds of millions of dollars per year on power costs just to meet current security levels, let alone whatever level of higher security might be required in a moonshot scenario.
      - tmornini_ey 11y ago
        Millions of people collectively losing hundreds of millions of dollars a year is less than $1/month individually.
deleted 11y ago
[deleted]
dontbelieveyou 11y ago
Response: https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/page-199#post-7271 https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16...
Andrew_Quentin 11y ago
Welcome to HN If you knew anything about Bitcoin Unlimited I am sure you would have come across its most fundamental aspect - moving the blocksize limited from the hardcoded centralised protocol layer to the transport or messaging layer thus allowing each node operator to choose the limit in a decentralised fashion so creating an emergent consensus. In regards to your speculative economics, as I am sure you are aware, storage/bandwith/processing/validation and mining has costs. No one would therefore mine a transaction for free in 20 years because if they do so they would soon go bankrupt. Bitcoin's design has an inbuilt long term solution. Reward miners early on - grow adoption - increase transactions to a "very large number" - charge pennies out of millions of transactions - profit. Finally, LN may be secure for microtransactions. It is in no way secure for decent transactions. There are millions of ways it can be hacked even now that it only exists in speculative heads. Once it becomes hardcode implemented I am sure attack vectors will only increase much further.
- maaku 11y ago
  > If you knew anything about Bitcoin Unlimited I am sure you would have come across its most fundamental aspect - moving the blocksize limited from the hardcoded centralised protocol layer to the transport or messaging layer thus allowing each node operator to choose the limit in a decentralised fashion so creating an emergent consensus. If you knew anything about Bitcoin, you'd know that this is a sure-fire way to get forked off the network and ripped off by double-spends. The nature of Nakamoto consensus is such that consensus parameters are not up to vote.
  - dontbelieveyou 11y ago
    > The nature of Nakamoto consensus is such that consensus parameters are not up to vote "The proof-of-work also solves the problem of determining representation in majority decision making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote." - Nakamoto
    - maaku 11y ago
aback 11y ago
> Without artificial scarcity of block space Or natural scarcity, which already exists.

by tdryja 11y ago

freework 11y ago

Mining does not need to be profitable. People always make the mistake in thinking that if mining ceases to be profitable that mining would suddenly stop. That is simply not how it works. It is more economical to buy tomatoes at the grocery store, but that doesn't stop people from growing tomatoes in their backyard.

maaku 11y ago
Mining costs millions of dollars per day in electricity costs. I guess we can just expect a few people to burn a hole in their pocket for the good of the network?
- Taek 11y ago
  Sorry to be pedantic, but I do believe the daily cost of mining is closer to $250,000 - $750,000. Not a small number, but also not millions per day.
  - maaku 11y ago
    I'm a physicist so naturally I do all back-of-the-envelope calculations to one-significant figure with rounding at each step. :) My own estimation is between $400k per day (hard lower bound) and $800k per day depending on assumptions about hardware efficiency, although around $100k / day was added in the last week in a trend that is continuing, so $1MM/day will very quickly be accurate.
- deleted 11y ago
  [deleted]
- aback 11y ago
  This reflects a misunderstanding of the drivers of mining costs. Mining only costs a lot because coin value is high and the block reward is high. This means miners are willing to spend more to win the reward. As the block reward lowers then mining becomes funded entirely by equilibrium-priced fees.
  - maaku 11y ago
    Oh I understand mining economics quite well. The comment I was responding to however claims that some people will continue to mine at a loss after the subsidy is negligible. However that assumes that people would be willing lose hundreds of millions of dollars per year on power costs just to meet current security levels, let alone whatever level of higher security might be required in a moonshot scenario.
    - tmornini_ey 11y ago
      Millions of people collectively losing hundreds of millions of dollars a year is less than $1/month individually.

deleted 11y ago

[deleted]

dontbelieveyou 11y ago

Response: https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/page-199#post-7271 https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16...

Andrew_Quentin 11y ago

Welcome to HN If you knew anything about Bitcoin Unlimited I am sure you would have come across its most fundamental aspect - moving the blocksize limited from the hardcoded centralised protocol layer to the transport or messaging layer thus allowing each node operator to choose the limit in a decentralised fashion so creating an emergent consensus. In regards to your speculative economics, as I am sure you are aware, storage/bandwith/processing/validation and mining has costs. No one would therefore mine a transaction for free in 20 years because if they do so they would soon go bankrupt. Bitcoin's design has an inbuilt long term solution. Reward miners early on - grow adoption - increase transactions to a "very large number" - charge pennies out of millions of transactions - profit. Finally, LN may be secure for microtransactions. It is in no way secure for decent transactions. There are millions of ways it can be hacked even now that it only exists in speculative heads. Once it becomes hardcode implemented I am sure attack vectors will only increase much further.

maaku 11y ago
> If you knew anything about Bitcoin Unlimited I am sure you would have come across its most fundamental aspect - moving the blocksize limited from the hardcoded centralised protocol layer to the transport or messaging layer thus allowing each node operator to choose the limit in a decentralised fashion so creating an emergent consensus. If you knew anything about Bitcoin, you'd know that this is a sure-fire way to get forked off the network and ripped off by double-spends. The nature of Nakamoto consensus is such that consensus parameters are not up to vote.
- dontbelieveyou 11y ago
  > The nature of Nakamoto consensus is such that consensus parameters are not up to vote "The proof-of-work also solves the problem of determining representation in majority decision making. If the majority were based on one-IP-address-one-vote, it could be subverted by anyone able to allocate many IPs. Proof-of-work is essentially one-CPU-one-vote." - Nakamoto
  - maaku 11y ago

aback 11y ago

> Without artificial scarcity of block space Or natural scarcity, which already exists.