5 ms·

> The correction will then "over-correct" What matters is whether the system is convergent. The best thing that could happen (for POW digital currencies in gen

> The correction will then "over-correct" What matters is whether the system is convergent. The best thing that could happen (for POW digital currencies in general) is that it stabilises, around the current value long term. Then we know an upper bound on the energy cost and speculation will evaporate leaving BTC as a utility. The worst thing that can happen is it stays oscillatory with increasing amplitude as various interests try to push it one way then the other. After that most systems go chronically and irreversibly chaotic, and that will be the end of that experiment.

eterm 4y ago
I don't think you need any nefarious interests to push it into instability, just the basic economic assumption of greed suggests that people would only want to mine the "easy weeks" and not mine the "hard weeks". Note that bitcoin mining is independent of anyone else mining. At difficulty X you are expected the same number of blocks regardless of how many others are mining, so others' dropping out doesn't increase your bitcoin income per hour. To me that's the fundamental missing part that could deliver stability. As others drop out, you aren't incentivised by the economy to mine. You might think you're getting a bigger share of the pie, but you're still getting the same number of blocks per hour no matter how many or few others are mining. There are two main factors for why this scenario can be avoided: 1. The difficulty can't go beyond what the Potential Total Hashrate can bring to the table. In other words, even if the difficulty were to suddenly drop to 2010 levels and the block-week solved essentially instantly, the new difficulty after that block-week has been mined would still be what that hash-rate is capable of. 2. There are limits to how much the difficulty can drop, so it can't actually fully drop that far in one go. To get to full "easy week / hard week" pattern would be a slow oscilation that could be corrected with new algorithms including a bit of damping / smoothing via a soft fork. But it's still an interesting scenario for a real "death" of bitcoin and how it could play out.
- jcbrand 4y ago
  Note that bitcoin mining is independent of anyone else mining. I don't think this is correct, because not everyone has the same hashing power. Yes the amount of blocks you would statistically generate per hour is dependent on your hash rate and the current difficulty. However, other miners with higher hash power will mine blocks quicker than you, and therefore take the rewards for those blocks ahead of you. The amount of rewards you get is dependent on your share of the total hashing power, which includes other miners, and not just your own hashing power relative to the difficulty level. An artificially low difficulty level simply means that blocks are mined more quickly, so yes in a way miners are making more money per unit of time, but the rewards are distributed according to your percentage of the total hashing power. This is even more explicit in mining pools, where you might never mine a block, but still get rewards simply by virtue of providing hashing power to the pool itself.
  - jstanley 4y ago
    This isn't right. Your parent comment was right. Mining a block is just brute-forcing until you find a SHA hash that is small enough. Your chances of successfully finding a small-enough hash are completely independent of everyone else. It's not some sort of race to find a block, and as soon as someone finds a block everyone has to start again. (Other than that they can't reuse the same transactions, and need to update the parent block pointer). If I give you £100 every time you find a random number that satisfies some property, the amount of £100s you get is independent of how many other people are making money with the same scheme. The only reason competition matters at all is because of the difficulty adjustment.
    - jcbrand 4y ago
      Mining a block is just brute-forcing until you find a SHA hash that is small enough. Or until someone else mines a block, in which case you have to start again from scratch. It's not some sort of race to find a block, and as soon as someone finds a block everyone has to start again. If miner A and miner B are both mining, and miner A mines a block, then miner B has to start from scratch with a new block because in all likelihood miner B was including transactions in his un-mined block that are now already mined by miner A. So yes, as soon as someone finds a block, everyone has to start again and that's why mining is in fact a race to find a block. If I give you £100 every time you find a random number that satisfies some property, the amount of £100s you get is independent of how many other people are making money with the same scheme. This is not how Bitcoin mining works. The "random number that satisfies some property" is dependent on the transactions included in your block, and if other miners include those transactions that are mined in blocks before yours, then you have to start from scratch.
      - jstanley 4y ago
        No, I still think you don't get it. You seem to think that mining a block is something that takes a long time, and that work is wasted if someone else managed to mine a block first. Mining a block takes an incredibly short amount of time, but pays off with incredibly low probability. You have to do lots of attempts to find a block. You don't spend 10 minutes trying to compute one hash, and then throw up your hands in disappointment if it wasn't low enough. > Or until someone else mines a block, in which case you have to start again from scratch. You always start again from scratch after every single hash. Billions of times per second. You're no more likely to find a block on your millionth hash than on your first. The work doesn't add up. Each hash you try is either low enough or it's not, and either way you try again. > The "random number that satisfies some property" is dependent on the transactions included in your block, and if other miners include those transactions that are mined in blocks before yours, then you have to start from scratch. That's correct, but you only wasted a small amount of time during the overlap between the other miner finding a new block and you hearing about it.
deleted 4y ago
[deleted]
cyanydeez 4y ago
The best thing to happen is that it'll go to 0 and all this energy gets put into. Project with real benefit.

eterm 4y ago

I don't think you need any nefarious interests to push it into instability, just the basic economic assumption of greed suggests that people would only want to mine the "easy weeks" and not mine the "hard weeks". Note that bitcoin mining is independent of anyone else mining. At difficulty X you are expected the same number of blocks regardless of how many others are mining, so others' dropping out doesn't increase your bitcoin income per hour. To me that's the fundamental missing part that could deliver stability. As others drop out, you aren't incentivised by the economy to mine. You might think you're getting a bigger share of the pie, but you're still getting the same number of blocks per hour no matter how many or few others are mining. There are two main factors for why this scenario can be avoided: 1. The difficulty can't go beyond what the Potential Total Hashrate can bring to the table. In other words, even if the difficulty were to suddenly drop to 2010 levels and the block-week solved essentially instantly, the new difficulty after that block-week has been mined would still be what that hash-rate is capable of. 2. There are limits to how much the difficulty can drop, so it can't actually fully drop that far in one go. To get to full "easy week / hard week" pattern would be a slow oscilation that could be corrected with new algorithms including a bit of damping / smoothing via a soft fork. But it's still an interesting scenario for a real "death" of bitcoin and how it could play out.

jcbrand 4y ago
Note that bitcoin mining is independent of anyone else mining. I don't think this is correct, because not everyone has the same hashing power. Yes the amount of blocks you would statistically generate per hour is dependent on your hash rate and the current difficulty. However, other miners with higher hash power will mine blocks quicker than you, and therefore take the rewards for those blocks ahead of you. The amount of rewards you get is dependent on your share of the total hashing power, which includes other miners, and not just your own hashing power relative to the difficulty level. An artificially low difficulty level simply means that blocks are mined more quickly, so yes in a way miners are making more money per unit of time, but the rewards are distributed according to your percentage of the total hashing power. This is even more explicit in mining pools, where you might never mine a block, but still get rewards simply by virtue of providing hashing power to the pool itself.
- jstanley 4y ago
  This isn't right. Your parent comment was right. Mining a block is just brute-forcing until you find a SHA hash that is small enough. Your chances of successfully finding a small-enough hash are completely independent of everyone else. It's not some sort of race to find a block, and as soon as someone finds a block everyone has to start again. (Other than that they can't reuse the same transactions, and need to update the parent block pointer). If I give you £100 every time you find a random number that satisfies some property, the amount of £100s you get is independent of how many other people are making money with the same scheme. The only reason competition matters at all is because of the difficulty adjustment.
  - jcbrand 4y ago
    Mining a block is just brute-forcing until you find a SHA hash that is small enough. Or until someone else mines a block, in which case you have to start again from scratch. It's not some sort of race to find a block, and as soon as someone finds a block everyone has to start again. If miner A and miner B are both mining, and miner A mines a block, then miner B has to start from scratch with a new block because in all likelihood miner B was including transactions in his un-mined block that are now already mined by miner A. So yes, as soon as someone finds a block, everyone has to start again and that's why mining is in fact a race to find a block. If I give you £100 every time you find a random number that satisfies some property, the amount of £100s you get is independent of how many other people are making money with the same scheme. This is not how Bitcoin mining works. The "random number that satisfies some property" is dependent on the transactions included in your block, and if other miners include those transactions that are mined in blocks before yours, then you have to start from scratch.
    - jstanley 4y ago
      No, I still think you don't get it. You seem to think that mining a block is something that takes a long time, and that work is wasted if someone else managed to mine a block first. Mining a block takes an incredibly short amount of time, but pays off with incredibly low probability. You have to do lots of attempts to find a block. You don't spend 10 minutes trying to compute one hash, and then throw up your hands in disappointment if it wasn't low enough. > Or until someone else mines a block, in which case you have to start again from scratch. You always start again from scratch after every single hash. Billions of times per second. You're no more likely to find a block on your millionth hash than on your first. The work doesn't add up. Each hash you try is either low enough or it's not, and either way you try again. > The "random number that satisfies some property" is dependent on the transactions included in your block, and if other miners include those transactions that are mined in blocks before yours, then you have to start from scratch. That's correct, but you only wasted a small amount of time during the overlap between the other miner finding a new block and you hearing about it.

deleted 4y ago

[deleted]

cyanydeez 4y ago

The best thing to happen is that it'll go to 0 and all this energy gets put into. Project with real benefit.