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Hold on. How can the mafia, or government for that matter, systematically stop people from mining small amounts crypto (possibly arbitraging a huge gulf between

Hold on. How can the mafia, or government for that matter, systematically stop people from mining small amounts crypto (possibly arbitraging a huge gulf between electricity prices and USD exchange rates)? Other than the electricity cost how can they find you? People have found many more clever ways to hide economic activity in dangerous situations (see black markets in North Korea). I thought the whole point of cryptocurrencies was to exactly to get around this central control. If this wasn't possible, it’s an unfortunate and interesting example of how bitcoins ideologies don’t work in reality. Edit: Huh, what's with the downvotes?

wpietri 9y ago
What do you mean "other than the electricity"? Isn't that enough?
- jamesmurray 9y ago
  Presumably, the cost of electricity for mining is small, and a lot of the value of crypto is amortized from the hardware. Like anything else it can be stolen but, they would need to know about it. If I can stash a small rig somewhere, then I can produce currency. This process doesn't require scale or major investment, so you could mine at a small enough scale to be below notice.
  - wpietri 9y ago
    I would want to see your calculations on that. Venezuela is dealing with electricity rationing [1] and blackouts [2], and has had issues for years. [3] Further, the hardware needed for effective mining is very expensive in Venezuelan terms, and surely must be difficult to obtain. How much power would they really have to use to pay off often enough to justify the investment? [1] https://www.reuters.com/article/us-venezuela-blackouts/venezuela-begins-power-rationing-as-drought-causes-severe-outages-idUSKCN1GS2M5 https://www.reuters.com/article/us-venezuela-blackouts/venez... [2] e.g., https://www.reuters.com/article/us-venezuela-blackout/blackout-hits-parts-of-venezuelan-capital-idUSKBN1FQ33T https://www.reuters.com/article/us-venezuela-blackout/blacko... [3] https://www.cnn.com/2016/04/26/americas/venezuela-blackouts/index.html https://www.cnn.com/2016/04/26/americas/venezuela-blackouts/...
cbhl 9y ago
Presumably, by using a physical weapon to coerce you to give them your hardware. https://xkcd.com/538/ https://xkcd.com/538/
- jamesmurray 9y ago
  If I can stash a small rig somewhere, then I can produce currency. This process doesn't require scale or major investment, so you could mine at a small enough scale to be below notice (See also: black markets). This seems like a viable way to save funds at a personal/family level. Stashing of small to moderate currency against a low-quality government or mafia (via the conversion of electricity) seems like one good use case of currencies. If this isn't the case, it would be genuinely interesting to know why.
jcranmer 9y ago
What, you mean the simplified world ideologies don't hold up in practice to the real world? What kind of craziness is this? Less sarcastically... that's kind of the big issue that people forget. The price of bitcoin is approximately the cost it takes to mine it less the cost of capital or so--in other words, you should expect to spend something like 95¢ in electricity to make $1 of bitcoin. Electricity prices aren't consistent across the world, but the notability of bitcoin is such that you have to compete against the lowest-cost places. In order to make a decent amount of money from bitcoin, you have to consume a decent amount of electricity. And that electricity has to be converted into some other form of energy, which usually comes out as heat or (in some cases) RF leakage. What that means is detecting mining is as simple as noticing who's using all the electricity (trivial, if you're the electric company), or walking down the street with a wide-spectrum RF sensor and IR gun. When you look at that kind of power draw,
- jamesmurray 9y ago
  >What, you mean the simplified world ideologies don't hold up in practice to the real world? What kind of craziness is this? Your derogatory tone is uncalled for, nothing in my comment was pro-crypto. Stashing of small to moderate currency against a low-quality government or mafia (via the conversion of electricity) seems like one good use case of currencies. If this isn't the case, it would be genuinely interesting to know why. > ...you should expect to spend something like 95¢ in electricity to make $1 of bitcoin Got a quote for this 95% figure? Yes, I understand efficient markets. Presumably, a lot of the value of crypto is amortized from the hardware. > When you look at that kind of power draw, Your criticism relies on two unstated assumptions. 1. Large scale. If I can stash a small rig somewhere, then I can produce currency. This process doesn't require scale or major investment, so you could mine at a small enough scale to be below notice (see also: black markets). This seems like a viable way to save funds at a personal/family level. 2. Has electricity prices risen correspondingly with inflation? I would expect in a dev country electricity is subsidized or small relative to other living costs. The same energy it takes to run a home I could generate a few bucks here. A few bucks in our country is incredibly valuable right now in V.

wpietri 9y ago

What do you mean "other than the electricity"? Isn't that enough?

jamesmurray 9y ago
Presumably, the cost of electricity for mining is small, and a lot of the value of crypto is amortized from the hardware. Like anything else it can be stolen but, they would need to know about it. If I can stash a small rig somewhere, then I can produce currency. This process doesn't require scale or major investment, so you could mine at a small enough scale to be below notice.
- wpietri 9y ago
  I would want to see your calculations on that. Venezuela is dealing with electricity rationing [1] and blackouts [2], and has had issues for years. [3] Further, the hardware needed for effective mining is very expensive in Venezuelan terms, and surely must be difficult to obtain. How much power would they really have to use to pay off often enough to justify the investment? [1] https://www.reuters.com/article/us-venezuela-blackouts/venezuela-begins-power-rationing-as-drought-causes-severe-outages-idUSKCN1GS2M5 https://www.reuters.com/article/us-venezuela-blackouts/venez... [2] e.g., https://www.reuters.com/article/us-venezuela-blackout/blackout-hits-parts-of-venezuelan-capital-idUSKBN1FQ33T https://www.reuters.com/article/us-venezuela-blackout/blacko... [3] https://www.cnn.com/2016/04/26/americas/venezuela-blackouts/index.html https://www.cnn.com/2016/04/26/americas/venezuela-blackouts/...

cbhl 9y ago

Presumably, by using a physical weapon to coerce you to give them your hardware. https://xkcd.com/538/ https://xkcd.com/538/

jamesmurray 9y ago
If I can stash a small rig somewhere, then I can produce currency. This process doesn't require scale or major investment, so you could mine at a small enough scale to be below notice (See also: black markets). This seems like a viable way to save funds at a personal/family level. Stashing of small to moderate currency against a low-quality government or mafia (via the conversion of electricity) seems like one good use case of currencies. If this isn't the case, it would be genuinely interesting to know why.

jcranmer 9y ago

What, you mean the simplified world ideologies don't hold up in practice to the real world? What kind of craziness is this? Less sarcastically... that's kind of the big issue that people forget. The price of bitcoin is approximately the cost it takes to mine it less the cost of capital or so--in other words, you should expect to spend something like 95¢ in electricity to make $1 of bitcoin. Electricity prices aren't consistent across the world, but the notability of bitcoin is such that you have to compete against the lowest-cost places. In order to make a decent amount of money from bitcoin, you have to consume a decent amount of electricity. And that electricity has to be converted into some other form of energy, which usually comes out as heat or (in some cases) RF leakage. What that means is detecting mining is as simple as noticing who's using all the electricity (trivial, if you're the electric company), or walking down the street with a wide-spectrum RF sensor and IR gun. When you look at that kind of power draw,

jamesmurray 9y ago
>What, you mean the simplified world ideologies don't hold up in practice to the real world? What kind of craziness is this? Your derogatory tone is uncalled for, nothing in my comment was pro-crypto. Stashing of small to moderate currency against a low-quality government or mafia (via the conversion of electricity) seems like one good use case of currencies. If this isn't the case, it would be genuinely interesting to know why. > ...you should expect to spend something like 95¢ in electricity to make $1 of bitcoin Got a quote for this 95% figure? Yes, I understand efficient markets. Presumably, a lot of the value of crypto is amortized from the hardware. > When you look at that kind of power draw, Your criticism relies on two unstated assumptions. 1. Large scale. If I can stash a small rig somewhere, then I can produce currency. This process doesn't require scale or major investment, so you could mine at a small enough scale to be below notice (see also: black markets). This seems like a viable way to save funds at a personal/family level. 2. Has electricity prices risen correspondingly with inflation? I would expect in a dev country electricity is subsidized or small relative to other living costs. The same energy it takes to run a home I could generate a few bucks here. A few bucks in our country is incredibly valuable right now in V.