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Your analysis is wrong. The actors in this system are rational actors incentivized to preserve the system. The algorithm assists difficulty. And even in patholo
by DSingularity 4y ago
Your analysis is wrong. The actors in this system are rational actors incentivized to preserve the system. The algorithm assists difficulty. And even in pathological cases of continuous drop with unsustained price levels — you assume the miners are going to irrationally continue to raise rates because they are too stupid to realize the scenario you are describing?
Again: missing the first for the trees.
- rini17 4y agoMiners don't set the rates. They pick from existing transactions on the network to fit into limited space on the blockchain. For them picking the transactions with highest fees is rational in any case.
- DSingularity 4y agoOP was saying the death spiral will happen because miners will decide That the combination of BTC price and block fees is insufficient motivation to mine at present difficulty levels. This is effectively miners setting rates. I am saying that miners will act in self-interest and avoid death by suicide by enabling this deadly spiral by continuously turning off hardware during times of down trend.
- rini17 4y agoI see, you meant HASHrates not prices. I expect that in the "hope dies last" spirit some of the miners will double down, to get higher share of the fees. Whether that's going to be enough to carry through till the network algorithm adapts.. I don't know but wouldn't underestimate the zeal.