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If it's taking miners too long to find blocks because of a decline in hash rate, the difficulty adjusts, which would reduce the cost of production. Some commodi

If it's taking miners too long to find blocks because of a decline in hash rate, the difficulty adjusts, which would reduce the cost of production. Some commodities can trade for less than their marginal cost of production for extended periods, but this is unlikely to last long in Bitcoin, because mining operations are so cheap & easy to stop and start as compared to, say, a copper mine.

labrador 4y ago
> If it's taking miners too long to find blocks because of a decline in hash rate, the difficulty adjusts Bitcoin hash rate: The amount of processing and computing power being given to the network through mining is referred to as Bitcoin's hash rate. [1] If miners drop out producing a decline in hash rate but transaction volume remains the same or higher, doesn't "the difficulty adjusts" imply that Bitcoin would get less secure? [1] https://cointelegraph.com/explained/what-is-bitcoin-hash-rate-and-why-does-it-matter https://cointelegraph.com/explained/what-is-bitcoin-hash-rat...
- shapefrog 4y ago
  imo the only security is the defence of a 51% attack - the actual hash rate is to some extent correlated with the distribution of miners. However, at high enough levels of difficulty hardware becomes specialised and reduces the number of parties that can compete.
- helen___keller 4y ago
  > If miners drop out producing a decline in hash rate but transaction volume remains the same or higher, doesn't "the difficulty adjusts" imply that Bitcoin would get less secure? It’s not incorrect to say, but you have to be careful with what you mean by “secure”. The attack is one miner with 51% of the hashrate controlling consensus. This still doesn’t mean your bitcoin gets stolen, it does mean bitcoin fails it’s mission in that the one user controls which transactions make it on chain. However the value of controlling bitcoin is proportional to the market cap of bitcoin. Hashrate also scales with the market cap. So arguably it would never be worth executing this kind of attack. The same is true of the zillions of tiny PoW coins out there.

labrador 4y ago

> If it's taking miners too long to find blocks because of a decline in hash rate, the difficulty adjusts Bitcoin hash rate: The amount of processing and computing power being given to the network through mining is referred to as Bitcoin's hash rate. [1] If miners drop out producing a decline in hash rate but transaction volume remains the same or higher, doesn't "the difficulty adjusts" imply that Bitcoin would get less secure? [1] https://cointelegraph.com/explained/what-is-bitcoin-hash-rate-and-why-does-it-matter https://cointelegraph.com/explained/what-is-bitcoin-hash-rat...

shapefrog 4y ago
imo the only security is the defence of a 51% attack - the actual hash rate is to some extent correlated with the distribution of miners. However, at high enough levels of difficulty hardware becomes specialised and reduces the number of parties that can compete.
helen___keller 4y ago
> If miners drop out producing a decline in hash rate but transaction volume remains the same or higher, doesn't "the difficulty adjusts" imply that Bitcoin would get less secure? It’s not incorrect to say, but you have to be careful with what you mean by “secure”. The attack is one miner with 51% of the hashrate controlling consensus. This still doesn’t mean your bitcoin gets stolen, it does mean bitcoin fails it’s mission in that the one user controls which transactions make it on chain. However the value of controlling bitcoin is proportional to the market cap of bitcoin. Hashrate also scales with the market cap. So arguably it would never be worth executing this kind of attack. The same is true of the zillions of tiny PoW coins out there.