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You realize it's not simple to just build the chip production facilities to facilitate this? It requires major capital investment and planning. Looks like you

You realize it's not simple to just build the chip production facilities to facilitate this? It requires major capital investment and planning. Looks like you also missed that the chip shortage is affecting automobiles. Many articles exist that can explain better than I can about why this isn't a quickly resolved issue.

leereeves 5y ago
It's not a supply issue. By design, proof of work requires even more resources as more resources are spent on it. One might say that it expands to consume all available supply. Because of that, no matter how many cards Nvidia makes, crypto miners will want them all, as long as there is money to be made in crypto.
- Siira 5y ago
- vl 5y ago
  Not true at all. If enough hardware is available, pool only expands until reward covers electricity cost plus small margin. I.e. bitcoin mining electricity-cost bound for the long time now.
  - eru 5y ago
    Electricity costs plus cost of capital (etc).
    - paulmd 5y ago
      in practice that's not even true because some miners are willing to run negative margins because they extract value elsewhere in the process (the most prominent example is stolen electricity, but also for many miners it's a form of cash laundering. You always get less money out than you put in, but it's clean cash. In China's case they can't get money past capital controls, but you can mine at a loss and sell the bitcoins in a jurisdiction of your choice, that's worth something to them. Also, many miners are front-running exchange trades or extracting other forms of economic value.)
      - eru 5y ago
        Interesting. How does running a mining operation help you front-run exchange trades?
        paulmd 5y ago
        standard front-running stuff. you can see the transactions that are in the mempool, you can either submit your own higher-fee transaction (likely to be included before theirs) or if you're a miner you can try to mine blocks with your transaction included and theirs specifically excluded so that yours goes first. that essentially tells you that the price is about to go up or down, so you can make money on the movement. https://cointelegraph.com/news/front-running-flash-bots-and-keeping-things-fair-in-the-crypto-market https://cointelegraph.com/news/front-running-flash-bots-and-... https://coinmarketcap.com/alexandria/glossary/miner-extractable-value-mev https://coinmarketcap.com/alexandria/glossary/miner-extracta...
        eru 5y ago
        Thanks. Most of what you suggest doesn't benefit from having significant mining capacity yourself. (Though one thing does.)

leereeves 5y ago

It's not a supply issue. By design, proof of work requires even more resources as more resources are spent on it. One might say that it expands to consume all available supply. Because of that, no matter how many cards Nvidia makes, crypto miners will want them all, as long as there is money to be made in crypto.

Siira 5y ago
vl 5y ago
Not true at all. If enough hardware is available, pool only expands until reward covers electricity cost plus small margin. I.e. bitcoin mining electricity-cost bound for the long time now.
- eru 5y ago
  Electricity costs plus cost of capital (etc).
  - paulmd 5y ago
    in practice that's not even true because some miners are willing to run negative margins because they extract value elsewhere in the process (the most prominent example is stolen electricity, but also for many miners it's a form of cash laundering. You always get less money out than you put in, but it's clean cash. In China's case they can't get money past capital controls, but you can mine at a loss and sell the bitcoins in a jurisdiction of your choice, that's worth something to them. Also, many miners are front-running exchange trades or extracting other forms of economic value.)
    - eru 5y ago
      Interesting. How does running a mining operation help you front-run exchange trades?
      - paulmd 5y ago
        standard front-running stuff. you can see the transactions that are in the mempool, you can either submit your own higher-fee transaction (likely to be included before theirs) or if you're a miner you can try to mine blocks with your transaction included and theirs specifically excluded so that yours goes first. that essentially tells you that the price is about to go up or down, so you can make money on the movement. https://cointelegraph.com/news/front-running-flash-bots-and-keeping-things-fair-in-the-crypto-market https://cointelegraph.com/news/front-running-flash-bots-and-... https://coinmarketcap.com/alexandria/glossary/miner-extractable-value-mev https://coinmarketcap.com/alexandria/glossary/miner-extracta...
        eru 5y ago
        Thanks. Most of what you suggest doesn't benefit from having significant mining capacity yourself. (Though one thing does.)