4 ms·

I think you already know this, but for the benefit of others who don't, the author addresses this, but gets it wrong: >However, the number of miners cannot fal

I think you already know this, but for the benefit of others who don't, the author addresses this, but gets it wrong: >However, the number of miners cannot fall below a certain level, because without the miners providing the computing power to maintain the ledger, the bitcoin blockchain will not remain viable. That's not actually correct. The difficulty of mining can drop to basically zero. The entire throughput of bitcoin as it stands today could be calculated on a single 2005 era cellphone if the difficulty dropped far enough, which it would if enough miners left the network. Of course, if there was only one single 2005 era cellphone running, someone malicious could online /two/ 2005 era cellphones and then use their majority share of the network to start double-spending, so you do want enough compute power that it's not trivial for a single actor to beat it out. There is an interesting lower threshold on mining difficulty that we haven't hit yet, and that's the point where GPU mining becomes viable again. There's quite a lot of small-time GPU rigs out there that have been mining some of the more interesting altcoins like monero and etherium that could switch over to bitcoin if enough asic miners leave the network. So I'm not convinced on the authors "critical tipping point" thesis. There's a potential floor there he doesn't seem to be aware of.

londons_explore 8y ago
The hash rate has to fall many orders of magnitude, without the price going down before GPU mining would make sense again. https://www.blockchain.com/en/charts/hash-rate?timespan=all&scale=1 https://www.blockchain.com/en/charts/hash-rate?timespan=all&...
gus_massa 8y ago
If the drop is smooth it would not be a problem. There can be a problem if there is a very abrupt drop and until the next difficulty recalculation the block generation rate would be too slow. This is similar to what happened with the creation of the Bitcoin Cash fork. Just after the fork, the hash rate in the Bitcoin Cash was 1/10 of the previous rate, so each block would need like 2 hours instead of the usual 10 minutes. They expected something like this, so in the fork they added an special rule to reduce the difficulty automatically if no one finds a block for a long time. (This rule is not in the main Bitcoin.)
- Sir_Substance 8y ago
  >If the drop is smooth it would not be a problem. There can be a problem if there is a very abrupt drop and until the next difficulty recalculation the block generation rate would be too slow. That's always been a weakness in the difficulty recalculation algorithm. There are a few other ones out there that can do much faster re-targeting in interesting ways, such as gravity well[1]. I'm assuming that if we faced a sudden exodus of that scale that dramatically wedged block generation, we'd see a hard-fork to change the recalculation algorithm. The hard-fork would certainly win because anyone who refuses the hard-fork can't mine blocks due to the difficulty being too high for the network. [1] https://bitcoin.stackexchange.com/questions/21730/how-does-the-kimoto-gravity-well-regulate-difficulty https://bitcoin.stackexchange.com/questions/21730/how-does-t...

londons_explore 8y ago

The hash rate has to fall many orders of magnitude, without the price going down before GPU mining would make sense again. https://www.blockchain.com/en/charts/hash-rate?timespan=all&scale=1 https://www.blockchain.com/en/charts/hash-rate?timespan=all&...

gus_massa 8y ago

If the drop is smooth it would not be a problem. There can be a problem if there is a very abrupt drop and until the next difficulty recalculation the block generation rate would be too slow. This is similar to what happened with the creation of the Bitcoin Cash fork. Just after the fork, the hash rate in the Bitcoin Cash was 1/10 of the previous rate, so each block would need like 2 hours instead of the usual 10 minutes. They expected something like this, so in the fork they added an special rule to reduce the difficulty automatically if no one finds a block for a long time. (This rule is not in the main Bitcoin.)

Sir_Substance 8y ago
>If the drop is smooth it would not be a problem. There can be a problem if there is a very abrupt drop and until the next difficulty recalculation the block generation rate would be too slow. That's always been a weakness in the difficulty recalculation algorithm. There are a few other ones out there that can do much faster re-targeting in interesting ways, such as gravity well[1]. I'm assuming that if we faced a sudden exodus of that scale that dramatically wedged block generation, we'd see a hard-fork to change the recalculation algorithm. The hard-fork would certainly win because anyone who refuses the hard-fork can't mine blocks due to the difficulty being too high for the network. [1] https://bitcoin.stackexchange.com/questions/21730/how-does-the-kimoto-gravity-well-regulate-difficulty https://bitcoin.stackexchange.com/questions/21730/how-does-t...