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One of the assumptions the authors make in this paper is that miners can turn their hardware on and off quickly, and that they will benefit financially for doin

• Closi 6y ago
  Commercial energy prices do vary throughout the day though, so if they are signing a single fixed price contract per kWh that would miss the opportunity to run older hardware more profitably during cheaper times. Besides, I doubt miners are keeping going during triad periods.
• troysk 6y ago
  They talk about miner turning off the system just after they have mined a coin as they probability of getting another soon is very low while the cost of running the system same.
  • deleted 6y ago
    [deleted]
  • retsibsi 6y ago
    I don't think the probability changes, does it? But the block will be less valuable if there are fewer transaction fees to claim.
    • deleted 6y ago
      [deleted]
  • bawolff 6y ago
    That sounds like gambler's fallacy.
• comex 6y ago
  Given that we’re talking about less than 10 minutes’ worth of energy, I wonder if a battery might be a viable option.
  • konschubert 6y ago
    Energy from a battery is almost always more expensive than energy from a grid. You have to account for the depreciation of the battery.
• bouncycastle 6y ago
  Very unlikely it will be turned off, the miners could still keep mining other coins while mining bitcoin blocks even if there is no BTC reward. See "merged mining" https://blog.bitmex.com/the-growth-of-bitcoin-merge-mining/ https://blog.bitmex.com/the-growth-of-bitcoin-merge-mining/.
  • uncletammy 6y ago
    This is a good point that the authors don't touch on. There are many coins secured by sha256 and I'm sure many more will come along before BTC finishes it's release schedule. Switching to any one of them is likely to provide more revenue than just attacking the network for a little extra transaction fee money. This is one of those times it's really useful to make a distinction between bitcoin the currency and bitcoin the protocol. If it was the authors intention to describe a future problem on the BTC network then they messed up by not addressing the rest of the sha256 mining ecosystem. However, if it was their intention to describe a problem with the protocol itself then it kind of makes sense to not touch on miner's alternatives.
    • tromp 6y ago
      All other sha256 coins combined only account for less than 2% of bitcoin's hashrate, so this doesn't really change the arguments.
      • bouncycastle 6y ago
        No, this is not what we are discussing. We are discussing using bitcoin's hashrate to mine other coins. No modification to bitcoin is needed, the other coins simply need to be aware of bitcoin and be able to verify bitcoin's blocks. Other coins can have an auxillary mining algorithm too, or even merged mined with other coins besides BTC, doesn't have to be sha256.
• davidgerard 6y ago
  Miners do turn their hardware off quickly, we saw this in November 2018. After a long period of profit, suddenly only the top-of-the-line miners were making money, and they just threw out a pile of stuff. Writeup I did at the time: https://davidgerard.co.uk/blockchain/2018/11/27/the-bitcoin-hash-rate-for-the-last-year-and-the-squeeze-that-crypto-miners-find-themselves-in/ https://davidgerard.co.uk/blockchain/2018/11/27/the-bitcoin-...
• michaelscott 6y ago
  A much bigger assumption is that this will even be necessary, considering the last BTC mined will be in 2140. With such a long time horizon any prediction is basically fanciful guesswork; at that time miners might have all moved to renewables after they become cheap enough, we may have new forms of energy generation which make supply both super easy and cost negligible, or Earth may have entered a post-apocalyptic state and mining is no longer even a consideration. To assume no advancement in tech between now and then seems reductive.
  • herodoturtle 6y ago
    I read this comment with interest, thanks for sharing. Makes good sense to me. If I may ask, do you think the distribution of bitcoin will be somewhat equitable as we approach 2140? And do you you think it will actually become a medium of exchange as originally hoped? Or will it remain a store of wealth only (as things currently seem to indicate)? And if it indeed remains only a store of wealth, will said wealth be distributed relatively equally, or will we be left with a relatively small pool of large holders? Just trying to wrap my mind around the long-term evolution of bitcoin - and your way of explaining the energy conundrum above makes me think you probably have good insight on this. I'd value your opinion, thanks :)
    • uberswe 6y ago
      It's impossible to predict the future. If everyone holds bitcoin as a store of value then the value should drop as it's not being used for anything one would think. I believe the best outcome is that people start using bitcoin for every day purchases and the hope is that by 2140 the price is relatively stable. Most likely there will be many large holders as there are with real money. However, someone could maybe do a 51% attack on bitcoin at some point. Maybe there is a unforeseen flaw in bitcoin. Maybe something better comes a long. It's impossible to know.
      • ynik 6y ago
        Or maybe there's a foreseen flaw in bitcoin. It's based on public-key cryptography which can be broken by quantum computers. Those don't exist yet (at least not in any form relevant to cryptography in practise), but I think they will by 2140.
• jcpham2 6y ago
  Absolutely! When miners are priced out they will be. If you can make a profit mining bitcoin, you’ll have already _arbitraged_ the pricing discrepancies in energy prices and made a boatload of money by now doing it. And once you get priced out, you are operating at a loss. Then you turn the miners off, sell ‘em to the next person willing to gamble vs. doing their homework. Re read that first paragraph real closely. I personally used to have a blog teaching people how to mine bitcoin on Ubuntu 10.04... until I didn’t anymore. Now, whether anyone likes it or not: Bitcoin has both value and utility until at least 2040, block rewards incentivize mining for 20 more years (19, whoops) if we read the white paper. Two thousand and forty. Every 10 mins, new block. Chain, new block. Huge billion dollar economy of SHA256 miners custom built for proof of work. That money to pay for all of that is coming from somewhere. Mark my words, proof of work doesn’t crash overnight. It wasn’t built built in a day either. AFTER that, there’s 100 years of “will bitcoin live” because of minimal to NO block rewards. These papers are so old and the subject matter is still misunderstood, it’s nice to see people learning and stuff but HN gah, just omagersh
• SilasX 6y ago
  >It turns out the really big miners don't pay for electricity the same way you or I do. Big miners sign long term contracts for continuous consumption of energy, and don't save any money for turning mining hardware off for a short duration. Really? Those contracts don't let them resell the unused electricity at (some fraction of) the spot price?
• rkagerer 6y ago
  Depending where they are and the nature of their rate contract, can't they can resell their unused, pre-purchased capacity back to the grid?
• dcolkitt 6y ago
  As a tangent, I wonder if Bitcoin mining could re-ignite the nuclear power industry. Nuclear power plants involve a high upfront capital cost, then produce a long-life of fixed electricity output at near-zero marginal cost. My understanding is that one reason more plants were built in the 60s was because electricity prices were fixed by regulators. That made financial modeling easier, because investors could legibly forecast their payback on the capital investment. When electricity moved to free floating price markets, it introduced much more risk and therefore increased the cost of capital. Seems like nuclear power and bitcoin mining are a match made in heaven. Demand remains smooth and predictable, even from minute to minute. The marginal cost of electricity is near zero. Many of the large mining pools are so large and well capitalized that they could afford to commission a dedicated plant.
  • jki275 6y ago
    Most miners are on hydro, located right next to the dams, and probably colluding with them for either zero or near zero cost. Similar advantages to nuclear I'd imagine.
  • ska 6y ago
    Predicting nearly anything (today) about crypto over the timelines necessary to even only commission a new nuclear plant, let alone its lifetime, seems ... risky.
  • tim333 6y ago
    Nuclear power isn't cheap. Miners need cheap.
    • rstuart4133 6y ago
      > Nuclear power isn't cheap. Miners need cheap. Yep. And I suspect there isn't any power cheaper than the output of an over provisioned wind or solar farm on a windy or sunny day. And they all will be over provisioned. In fact they all assume a faction of nameplate output now.
  • syngrog66 6y ago
    I wrote a bit of fiction recently which portrayed a future where a starship needed to run its own Bitcoin mining cluster (because "reasons") and the ship also happened to use a nuclear power plant. and for "reasons" the mining host hardware was also placed as close to the nuclear reactor as they could get away with (well the electricity generation portions anyway.) all needed for (arbitrary, fanciful) plot reasons, but one of ideas I used to justify it was because the power generation qualities fit the power needs of the crypto miners pretty well. stable load, low cost per watt, theres no wind or geothermal or tide in space, and solar is sometimes too weak and other times entirely blocked (picture situation when ship in planetary orbit, on far side from the star, so light is eclipsed.)
• mistrial9 6y ago
  the box on page 5 defines DefaultCompliant as "The default Bitcoin mining strategy, including all available transactions, mining on the end of the longest chain, choosing the older block in a tie, and publishing all blocks." the core code does not choose the older block in a tie, the code chooses the block with the largest legitimate chainwork (under current TARGET epoch) Second note: this paper investigates the era in the future when there are no mining rewards, only transaction fees. How far away is that ? How valuable is one satoshi now? Much of what is said is relative to that far-away case (reading through the paper) This is an interesting (and thorough) thought experiment for what behavior might emerge when only transaction fees are the reward for mining. However the case the paper makes for a serious security problem gets weaker, as the argument depends on a growing number of assumptions as the paper goes on.. I fail to understand why a PETTY-COMPLIANT miner would ever realistically take a set of Tx that does not short-term maximize profit, given the competition for new blocks goes WAY up as the value increases. In other words, the undercutting and LAZY-FORK behavior would be crowded out right away, as it is insufficiently popular. In the AGGRESSIVE-UNDERCUTTING discussion, it assumes a lot of "forks" or alternate chain tips, to chose from, is this true in practice? Are there really that many chain tips to chose from, to make this practice even a consideration? I see in page 10 that there is a more refined and detailed descriptions on miner strategy. From a math perspective this is interesting, but the comments above stand.. would anyone even have a chance to move ONE BLOCK using these considerations, given the value and competition for every single block?