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Renting out equipment for miners is dangerous, as an attack on the network can wipe out all their sunk costs. Bitcoin miner farms are very strongly incentivized
by xiphias2 5y ago
Renting out equipment for miners is dangerous, as an attack on the network can wipe out all their sunk costs. Bitcoin miner farms are very strongly incentivized to be aligned with the long term health of the system, so they try to play nice close to the ethos of Bitcoin (they learned enough from the blocksize wars that they can get burned if they go against Bitcoin)
- Eelongate 5y agoAn attack on bitcoin might have other motivations. For instance, a powerful government might attack bitcoin specifically to undermine bitcoin's credibility and utility.
- xiphias2 5y agoI was talking about motivations for renting out, not attacking. A goverment would just take over the miners with violence probably if it wanted to attack the system.
- paulgb 5y agoIf a halving forces a bunch of miners off the market (because their expected revenue drops below operating cost), there could be a huge glut of hardware flooding the market that is not profitable for honest mining but allows a bad actor to temporarily accumulate hashrate.
- xiphias2 5y agoBitcoin's price goes up faster than the effect of the halving (16x vs 0.5x every 4 years), and with the current chip shortage and slowdown of improvements miners generally plan for 4 years, but old, inefficient miners with low utilization can become an attack vector.
- adgjlsfhk1 5y agoIf your security model requires exponential increase in the value of crypto, it's a bad security model.