9 ms·
The State of Cryptocurrency Mining
- Paperweight 8y agoHopefully plain Bitcoin SHA-256 ASICs become more-or-less perfected and commoditized, leading to mining decentralization around local electricity deals.
- Alex3917 8y ago> leading to mining decentralization around local electricity deals. The amount of electricity it takes to secure the network is directly proportional to price. In order for BTC to replace traditional currency, it would require more electricity than the world currently produces each year.
- deegles 8y agoOnly if the expected return of mining is greater than the cost of the electricity. No one will spend $2 to get $1 worth of crypto.
- Obi_Juan_Kenobi 8y agoCorrection: The electricity cost is directly related to mining rewards. As demand increases, so does price. So miners would purchase electricity at ever-higher marginal prices until an equilibrium is reached. Mining rewards come from the coinbase reward and txn fees. The coinbase rewards go down over time according to a schedule. Bitcoin is currently highly inflationary to create mining incentive, but we are rapidly approaching the 'long tail' part of coinbase rewards. Txn fee behavior is less predictable, and a source of significant conflict.
- celticninja 8y agoThere is no causal link between the two.
- vasilipupkin 8y agothe most notable part of this for me is that instead of working on their main business, they are veering off in an unrelated direction just because it's potentially lucrative. Does it mean they've given up on storage as a business to go after?
- glass_of_water 8y agoAlso potentially concerning is that whenever the PoW algorithm changes, Obelisk will have a head start, since they're run by the people deciding what the PoW algorithm will be.
- wmf 8y agoThe point of Obelisk ASICs is to increase the security of Sia; it's not unrelated.
- vertexFarm 8y agoHa. I really hope we start seeing some truly useful and widely adopted decentralized apps, but everyone seems to get stuck in get-rich-quick schemes. I can't blame people for going where the money is. But this is starting to look bad for blockchain tech. Eventually the economy has to be about something other than buying in and hoping the next guy buys in for more or trying to make more and more effective mining hardware.
- vasilipupkin 8y agothey sold a token. Right? so, people who bought this token can probably sue them.
- latchkey 8y agoI'm running a fairly large mining farm. This article is spot on. Another point that isn't discussed is that the software solutions to manage large numbers of Pi/Beaglebone class machines is non-existent. Because of the fast time to market, these machines are unstable... parts burn out all the time, they go offline randomly, a bad PSU can make a machine reboot every 10 minutes (making doing anything with it difficult), etc. Never mind, just keeping track of where an individual machine is in a data center (needle in a haystack). There is a couple commercial and open source offerings, but the majority of them were built for when farms were only a handful of machines. Scaling to thousands of machines across different data centers has a lot of the same scaling issues I'd have running the same number of EC2 instances. If you look on Github, you can see that most public development in the mining community stopped around 2014-2015 and hasn't picked up again. Even the largest pools have taken things closed source. I find it amazing that literally billions of dollars is flowing through this stuff. If it wasn't for math being so factual, I'd really question it all because it is all barely held together with heat sink grease.
- ianai 8y agoSounds like you’re trying to run a data center without the full managerial/software complement.
- latchkey 8y agoThat is exactly what is happening. 2 data centers and growing. As a result, I'm building it for myself as I go, which is a fun sadistic exercise. Prometheus / Grafana (awesome tools), React / TypeScript, golang
- mhluongo 8y agoTalk to the guys at HashRabbit. They've been quietly working on this for years
- latchkey 8y agoI've done a lot of googling on them. Even found the new Gabe Evans... https://github.com/ivy https://github.com/ivy (good for her). Had they invested their $500k in BTC in 2015 instead of HashRabbit... 100m btc @ ~$200 = $1b. It seems like they aren't really in business. Is there something you know that I don't?
- seibelj 8y agoOnce proof of stake becomes the norm, this phenomenon will be an interesting exhibit in the Museum of Cryptocurrency
- __blockcipher__ 8y agoWhy do you think PoS is workable in the long run? I'm hesitant about the implications of solely tying voting power to how much currency you hold. Hash rate isn't much better, since it's the definition of a capital-intensive business, but there's still some possibility of getting better performance through clever innovations
- jacoblambda 8y agoSomething I am interested in but haven't seen much on is the idea of creating a proof of stake system where the value of one's stake is directly related to how liquid it is. i.e. how much they actually use their funds. Think currency regularly moving in and out of their account, providing smart contract loans, etc. I feel as if a proof of stake system that requires those staking to not only support the network but also be heavily involved in it as well would resolve some of the issues with current proof of stake systems.
- wmf 8y agoProof of Wash Trading!
- __blockcipher__ 8y agoHow do you deal with spam tx? In other words pretending to use your stake but you’re not actually? The same issue as what i’ve encountered when trying to imagine a cryptocurrency that is slightly inflationary, like 1% yearly. There is no objective way to decide how much the money supply should grow, as far as I can tell, because there is no way to separate “real” from “fake” usage.
- jacoblambda 8y ago
- angel_j 8y agoGood article with lots of epic photos that are not credited to anybody.
- JoeCoder_ 8y agoTo achieve asic resistance, why not switch between a large pool of different algorithms sequentially, with their order and various parameters determined by the hash of the previous block?
- latchkey 8y agoThere is Verge, which does this. https://vergecurrency.com/faq/mining/ https://vergecurrency.com/faq/mining/
- mrgordon 8y agoActually Verge does the algorithms in order so it’s more predictable. x16r aka Ravencoin is what the poster was describing
- Taek 8y agoYou could make one asic that supports all algorithms, and re-uses parts that overlap, or you could even create one asic per algorithm. This substantially increases the amount of design effort required, which puts it rather out of reach for smaller companies. But Bitmain could easily pull together a design effort of that scale, so they are even further advantaged there.
- JoeCoder_ 8y agoWouldn't an ASIC capable of executing hundreds of types of algorithms more or less just be a GPU anyway? At that point why not just use GPUs?
- thinkmassive 8y agoBased on the article, it wouldn’t be difficult to design an ASIC that handles multiple algorithms and accepts parameters for each. For mining chip manufacturers the gamble of choosing a few algorithms to support, especially if constraints are promised at the start of the PoW launch, can have favorable odds. There’s only so many PoW algorithms from which to choose.
- 8y ago
- priitmaxx 8y agoInteresting no mention of Ravencoin?
- TylerE 8y agoEven by the standards of altcoins, it's sort of hard to take a project seriously when the homepage starts out by rambling about Game of Thrones.
- AlexCoventry 8y agoI think he's probably referring to their PoW hashing algorithm: https://ravencoin.org/wp-content/uploads/2018/03/X16R-Whitepaper.pdf https://ravencoin.org/wp-content/uploads/2018/03/X16R-Whitep...
- TylerE 8y agoand I'm referring to the hero spot on their homepage which literally starts with "In the fictional world of Westeros, ravens are used as the messengers who carry statements of truth"
- dbuder 8y agoLies of the maesters!
- priitmaxx 8y agoCorrect. The whole idea of this coin is that it is supposed to be Asic resistant.
- atomical 8y agoNo. I'm all in on Jon Snow coin.
- AlexCoventry 8y agoIs there a hashing algorithm whose sequence of operations is heavily determined by the input, so that an ASIC targeting it would need to be roughly as flexible as a standard CPU?
- deleted 8y ago[deleted]
- __blockcipher__ 8y agoAn interesting question. One potential issue perhaps would be that it would presumably violate the memorylessness principle, which really changes the mining dynamics. Is there a difference between what you're proposing and the more memory-intensive hash algos like Scrypt, etc?
- AlexCoventry 8y agoI think so. I'm suggesting that small programs which use most CPU features be generated from the input, and used to transform parts of it.
- modwilliam 8y agoFrom another comment here, X16R? https://ravencoin.org/wp-content/uploads/2018/03/X16R-Whitepaper.pdf https://ravencoin.org/wp-content/uploads/2018/03/X16R-Whitep...
- Taek 8y ago'roughly' is really poorly defined. CPUs leverage things like branch prediction and context switching, and also CPUs and GPUs both need to be designed for approximately arbitrary use cases, which is a much harder thing to do than designing for random input. If you know for certain that the operations you get will follow some distribution, you can customize towards that distribution in ways a cpu or gpu can't.
- ericjang 8y agoThe authors of the blog post make pretty liberal use of fantasy artwork. The art doesn't add any educational value for me. If I stretch my imagination I can see how the last image gives a connotation of "an impressive, highly skilled, well refined entity", but to be it's... cringey for a company to be doing this. Like, I see my high school self in this aesthetic. Also, the authors would do well to credit the original sources / authors.
- jlrubin 8y agoLots of people have 'cringey' aesthetics in tech -- e.g., the anti-ego depletion 'own everything the same' uniform, the VC Patagonia+AllBirds, the 'free tshirts only' nerd outfit, etc. It's better to judge people on the merit of their ideas than their appearances or aesthetics. I support David choosing to present himself, and his work, as he pleases.
- deleted 8y ago[deleted]
- toomanybeersies 8y agoHaha, I used to work at a startup where I was the only one who didn't own a pair of Allbirds.
- cies 8y agoFrom the, really well written, article: > as ASICs continue to infiltrate every coin on the market I think he means "every PoW coin", because PoS coins will change the game significantly (or am I missing something). In the comments at Medium we see several question being asked about this (at this point all unanswered).
- undersuit 8y agoYou can still use an ASIC with a PoS coin, it just doesn't benefit you as much. PoS coins still perform work on a blockchain with cryptography, but there is no reward to be the fastest. An ASIC for a PoS would allow you to lower the power requirements(Wattage and compute) of the machine running the PoS coin.
- beagle3 8y agoI'm not sure if this qualifies as proof of stake, proof of work, or neither - but I've just heard of SpaceMesh[0], which seems to be a well thought out alternative to Ethereum. If I understand correctly, it's "proof of space" (in the sense that scrypt requires space whereas bcrypt requires just work; spacemesh requires space, not just work). Haven't had a chance to really look at the implementation though (its on github) [0] https://spacemesh.io/ https://spacemesh.io/