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So, something I've never quite understood: I believe the computational effort (and energy cost) to mine a coin keeps going up - by design. * If there is a sudd

So, something I've never quite understood: I believe the computational effort (and energy cost) to mine a coin keeps going up - by design. * If there is a sudden insta-crash in bitcoin value, is there a point where miners just won't bother anymore? If the mining energy cost is higher than the value of the bitcoin mined, doesn't it become un-economical and the whole block-chain seizes up? 'Someone will invent a more efficient method' doesn't seem a reasonable justification. If a major crash occurs would the route out be a fork to a variant where mining is reset to be easier/cheaper? *edit - aha I see the mining difficulty can go up or down over time: https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty edit2 - I was thinking of 'halving'. The reward (in number of bitcoins) for mining a block will halve over time, but not necessarily the difficulty or value of the bitcoin. https://www.coindesk.com/making-sense-bitcoins-halving/ https://www.coindesk.com/making-sense-bitcoins-halving/

Bluecobra 9y ago
Bitcoin is designed to produce a block every 10 minutes. The difficulty will scale back down if a bunch of miners dropped offline.
mikeash 9y ago
As you note, the difficulty adjusts based on the amount of computational power being used. However, there's a really fun corner case failure mode. The difficulty is supposed to adjust about once every two weeks to make for a roughly 10 minute interval between blocks. If more power is added to the network such that the interval is, say, 9 minutes, then when the next adjustment hits, the difficulty will be bumped up by 11%. But! That "every two weeks" thing is based on the block interval. The actual adjustment period is 2016 blocks. When blocks are mined every 10 minutes, that works out to two weeks. If they're mined faster, the network adjusts faster. If they're mined slower, the network adjusts slower. When the changes in hash rate are slow, this is fine. But what happens if there's a sudden massive change in the hash rate? Like, what happens if the hash rate somehow changes by a factor of a thousand in a brief period? If it goes up by a factor of a thousand, then the network will start mining blocks roughly every 0.6 seconds. Within about 20 minutes, the 2016 block interval will hit and the difficulty will also go up by a factor of 1000, then everything continues as usual. No problem. The problem is if the hash rate goes down by a factor of a thousand. Then the network will start mining blocks roughly once a week. The difficulty will readjust to bring that back down to 10 minutes... eventually. But the interval to the next readjustment is measured in blocks! Let's say you're halfway through the adjustment period when this crash happens, so you have 1008 blocks to go before the next adjustment. That would have taken about a week, but now it will take about twenty years! Unless you can get the hash rate back up substantially, the network will be in extreme slow mode for a long time.
- undersuit 9y ago
  In event of a massive exodus of hashing power like the 1000x reduction couldn't a fork be proposed to change the difficulty?
  - mikeash 9y ago
    I would think so. Getting enough buy-in for such a thing could be challenging.
roywiggins 9y ago
I've read suggestions that it's possible for the hashrate to drop so fast that the difficulty doesn't keep up, and the chain freezes. http://bitcoinandtheblockchain.blogspot.com/2017/08/chain-death-spiral-fatal-bitcoin.html http://bitcoinandtheblockchain.blogspot.com/2017/08/chain-de... https://cointelegraph.com/news/how-close-did-bitcoin-get-to-disastrous-chain-death-spiral https://cointelegraph.com/news/how-close-did-bitcoin-get-to-...

Bluecobra 9y ago

Bitcoin is designed to produce a block every 10 minutes. The difficulty will scale back down if a bunch of miners dropped offline.

mikeash 9y ago

As you note, the difficulty adjusts based on the amount of computational power being used. However, there's a really fun corner case failure mode. The difficulty is supposed to adjust about once every two weeks to make for a roughly 10 minute interval between blocks. If more power is added to the network such that the interval is, say, 9 minutes, then when the next adjustment hits, the difficulty will be bumped up by 11%. But! That "every two weeks" thing is based on the block interval. The actual adjustment period is 2016 blocks. When blocks are mined every 10 minutes, that works out to two weeks. If they're mined faster, the network adjusts faster. If they're mined slower, the network adjusts slower. When the changes in hash rate are slow, this is fine. But what happens if there's a sudden massive change in the hash rate? Like, what happens if the hash rate somehow changes by a factor of a thousand in a brief period? If it goes up by a factor of a thousand, then the network will start mining blocks roughly every 0.6 seconds. Within about 20 minutes, the 2016 block interval will hit and the difficulty will also go up by a factor of 1000, then everything continues as usual. No problem. The problem is if the hash rate goes down by a factor of a thousand. Then the network will start mining blocks roughly once a week. The difficulty will readjust to bring that back down to 10 minutes... eventually. But the interval to the next readjustment is measured in blocks! Let's say you're halfway through the adjustment period when this crash happens, so you have 1008 blocks to go before the next adjustment. That would have taken about a week, but now it will take about twenty years! Unless you can get the hash rate back up substantially, the network will be in extreme slow mode for a long time.

undersuit 9y ago
In event of a massive exodus of hashing power like the 1000x reduction couldn't a fork be proposed to change the difficulty?
- mikeash 9y ago
  I would think so. Getting enough buy-in for such a thing could be challenging.

roywiggins 9y ago

I've read suggestions that it's possible for the hashrate to drop so fast that the difficulty doesn't keep up, and the chain freezes. http://bitcoinandtheblockchain.blogspot.com/2017/08/chain-death-spiral-fatal-bitcoin.html http://bitcoinandtheblockchain.blogspot.com/2017/08/chain-de... https://cointelegraph.com/news/how-close-did-bitcoin-get-to-disastrous-chain-death-spiral https://cointelegraph.com/news/how-close-did-bitcoin-get-to-...