12 ms·

Bitcoin hashrate drops nearly 40% as deadly U.S. storm unplugs miners

168 points by belltaco 4y ago

cozzyd 4y ago
Those poor miners without their primary source of heat.
- deleted 4y ago
  [deleted]
MuffinFlavored 4y ago
> The Bitcoin network hashrate has dropped by more than 38.8% from its peak on Wednesday, as many U.S.-based miners have been forced to switch down their facilities due to deadly blizzards Is there any kind of geographical map that shows in which states/cities these hashrates are? I guess there probably isn't good correlation between hashrate + external IP? I wonder how profitable mining Bitcoin is these days at any scale.
- sgjohnson 4y ago
  > I guess there probably isn't good correlation between hashrate + external IP? Probably not, since you don’t even need to be online at all to mine bitcoin.
  - MuffinFlavored 4y ago
    > I'm no expert, but mining is just your computer taking the last valid block and trying to make a new one based on it by guessing a solution over and over. > Every 10 minutes or so, some miner on the network guesses correctly, and their block becomes the new one that everyone uses for their guessing. > If your miner isn't on the network, it'll never be told that some other miner guessed correctly and that everyone else on the network is now working on a newer block. Your miner will keep on guessing, but if it does eventually guess correctly, it won't matter as the network has moved on. https://www.reddit.com/r/Bitcoin/comments/sjfds/why_am_i_able_to_mine_bitcoin_offline_this_seems/c4ei4ve/ https://www.reddit.com/r/Bitcoin/comments/sjfds/why_am_i_abl... Seems kind of inefficient?
  - hanklazard 4y ago
    What? A miner needs to be connected to the network to actively mine blocks.
  - Ekaros 4y ago
    How do you get transactions if you are air gapped?
    - lucb1e 4y ago
      Or even if you don't care about recent transactions, at minimum you'll need to either own >50% of the hash rate and just make your own chain (good luck) or be online every couple minutes to find the longest chain's block hash value. You don't need fiber internet but just a DSL modem with most-of-the-time connectivity to do mining for contributing to the network's safety, but doing it offline altogether indeed does not really make sense. (If you're doing it for the moneys then you probably do want to get information early (stable, low latency internet) so that you don't waste hash cycles.)
    - tommek4077 4y ago
      The coin is transfered to your public key. This is saved in the public blockchain. Air gap means here, that you store your private keys on a device without internet.
      - lucb1e 4y ago
        That's one way of using the word air gap, but probably not what they meant.
- htag 4y ago
  > I wonder how profitable mining Bitcoin is these days at any scale. They have calculators for this [0]. The summary is that assuming mining difficulty, electricity rate, and bitcoin value hold constant it's a 10+ year return on the most energy efficient miners, so you're probably better off buying bonds. If you don't have access to very cheap electricity ($0.06/kwh or cheaper) and don't have an efficient way of handling waste heat then it's a non-starter. Even then the price of bitcoin and the mining difficulty are likely to move considerably in 10 years so it's a very risky business plan. [0] https://www.coinwarz.com/mining/bitcoin/calculator?hs=80 https://www.coinwarz.com/mining/bitcoin/calculator?hs=80
  - MuffinFlavored 4y ago
    I was aware of the calculators but I was more interested for example like what does one large mining operation (one large enough that when it goes offline during a blizzard, it's a mention-worthy part of that 40% hash rate drop figure) look like in terms of the calculator variables? How many of what piece of equipment do they have, are they getting electricity for $0.06/kwh or less like you said, how are they handling the waste heat? I wasn't aware we had huge mining farms in America to be honest. I thought it was mainly other countries. I'm also not super knowledgeable/in the know about this kind of stuff so, might just be accidental ignorance on my part.
    - htag 4y ago
      1. USA has pretty cheap electricity globally. I'm not surprised to see lots of mining here. 2. The blizzard probably took multiple mining operations offline. Large parts of the US are experiencing very cold conditions. 3. Maybe Rockland, TX has the most PR about currently operating large miners in the US. I think they have a contract for ~$0.03/kwh and purchase hundreds of megawatts [0]. It's tens of thousands of miners. [0] https://www.wired.com/story/hard-luck-texas-town-bet-bitcoin-lost/ https://www.wired.com/story/hard-luck-texas-town-bet-bitcoin...
      - MuffinFlavored 4y ago
        How much money does one of these operations roughly make and what was the startup cost?
- latchkey 4y ago
  > I wonder how profitable mining Bitcoin is these days at any scale. It boils down to a function of Capex and Opex. Today though it is a bit more complicated. Given that the bitcoin price goes in cycles, it is less about the current profitability and more about the ability to weather bear cycles. Miners now will hold as much as possible and then take profits when the prices go up again. Sometimes, they borrow against their existing holdings to buy more hardware. During bear cycles it is far more risky to setup a new mining operation, especially when presented with the ability to just market buy BTC in large enough quantities to not affect price. To answer your question though, it makes almost no sense to start a mining operation these days. You're competing with much larger players who have much deeper pockets. If you're doing just a small operation, the difficulty adjustments will hurt you more than a larger player who's lighting up thousands of machines at a time.
  - lottin 4y ago
    Imagine if copper miners held on to copper in the hope that it will go up in price. Taking a risk that is both unnecessary and unrelated to your business is stupid. That's the opposite of what a well-run business does.
    - britneybitch 4y ago
      That behavior is more common across industries than you might think. One example: https://markets.businessinsider.com/news/commodities/natural-gas-europe-lng-ships-wait-offshore-maximize-price-rise-2022-11 https://markets.businessinsider.com/news/commodities/natural...
    - latchkey 4y ago
      Copper miners control production output [0], which defines the price. Bitcoin miners don't directly control production. They'd need to fork and get 51%+ to follow that fork. [0] https://seekingalpha.com/article/4546309-ivanhoe-mines-upside-potential-awaits-copper-next-rally https://seekingalpha.com/article/4546309-ivanhoe-mines-upsid...
      - deleted 4y ago
- lucb1e 4y ago
  > Is there any kind of geographical map that shows in which states/cities these hashrates are? https://ccaf.io/cbeci/mining_map https://ccaf.io/cbeci/mining_map I didn't know this existed but randomly saw it in the website's menu while researching another comment. It even drills down to state level in the USA and province level in China if you click the button at the top of the map. Georgia is popular in the USA, anyone know why?
_fizz_buzz_ 4y ago
It seems it has already recovered: https://cointelegraph.com/news/bitcoin-hashrate-recovers-after-big-freeze-shuts-down-miners https://cointelegraph.com/news/bitcoin-hashrate-recovers-aft...
modeless 4y ago
Wow, I had no idea that much hashrate was in the US now. A much better situation than when it was in China, IMO.
- Jensson 4y ago
  Not good for Americans though since their electricity gets more expensive.
  - deleted 4y ago
    [deleted]
  - walkhour 4y ago
    Sure but we need numbers, how much more expensive is it, is it 1%, 10% or 100%. Because just saying "more" is compatible with the energy being 0.000001% more expensive. So your comment in not really saying anything.
    - ajkjk 4y ago
      Defensive much? It's more, and probably by more than 10^-9, and the point is allowed to be posted even if it doesn't include exact numbers.
      - fabianfabian 4y ago
        Numbers please, because it seems you haven't considered the possibility of it being cheaper. The practice known as curtailment, is a way for miners to help electricity grids. The miners' steady demand ensures power producers are bringing in revenue to offset costs, but can power off when demand from other sources is high, such as during winter storms.
        onlyrealcuzzo 4y ago
        Proof works both ways. Show me empirical evidence what you described is actually happening on a large scale.
lucb1e 4y ago
https://www.statista.com/statistics/881472/worldwide-bitcoin-energy-consumption/ https://www.statista.com/statistics/881472/worldwide-bitcoin... 40% of latest value (November) would be 116×.4=46 TWh ("estimated") or 78×.4=31 TWh ("minimum"). USA uses 4223 TWh per year (Wikipedia "Electricity sector of the United States", 2018), so Bitcoin uses around 1% of the USA's electricity per year (1.09%, or 0.73% for the minimum value). The lower value is truly a minimum of minimum, as I understand it, because (1) not everyone will have been unplugged, and (2) the source "minimum TWh" value makes unlikely assumptions about the efficiency of every miner (latest equipment, no overhead). At "7.09 × 10⁻⁴ metric tons CO2/kWh" in the USA https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references https://www.epa.gov/energy/greenhouse-gases-equivalencies-ca... (709 grams per kWh; 2019) this seems to come out between 22 and 32 million tonnes of CO2 per year, and iirc the average first-world person uses just over ten tons (ten thousand kilograms) per year so this is the equivalent of having an extra 2.2–3.2 million rich people on the planet (just the USA consumption, not Bitcoin's consumption elsewhere or other PoW currencies').
- lettergram 4y ago
  I’m going to go out on a limb and say I don’t believe this. I simply don’t believe anywhere near the figures people use for the energy used to mine Bitcoin. Drive down your street, look at all the businesses with their power on, all running computers. Every home running lights, fans, computers, video games, TVs, etc. then we have industrial manufacturing, etc. You mean to tell me there’s some people in a warehouse around here with racks of servers running hashes? Just hashes, not a data center. We’d need hundreds of those warehouses to be 1% of the On-grid power. Sorry, I don’t buy it.
  - pclmulqdq 4y ago
    There are thousands of those warehouses, but they are concentrated in areas where power is really cheap.
  - lucb1e 4y ago
    That's fine, please run the math again then. (Edit: I did not downvote, it's a legitimate question /edit) I've done it myself also in the past because, like you, I couldn't believe it either (this was around 2018 I'd guess). It's a fairly simple calculation to take an energy-efficient graphics card and see how many SHA2 hashes per second you can get from that, see its energy consumption (ignore the rest of the computer and connectivity to support the GPU for now), multiply that with the hash rate, et voila you get some ridiculous number (don't remember, but something like half the world's energy consumption). This indicates that all Bitcoin miners are using ASICs. Now the question becomes how efficient a Bitcoin ASIC is, and when you hunt for that number and plug that in, the result is in the same range as what the news has been saying. Edit: if you want to take a shortcut and use a readymade hashes per gigajoule value from last summer, see figure 1 here https://ccaf.io/cbeci/index/methodology https://ccaf.io/cbeci/index/methodology </edit> It also roughly works out when you look at kWh costs versus Bitcoin profit per consumed kWh, so the figure is not unreasonable. People would be leaving money on the table if their real electricity consumption were lower, because then they could add more equipment and make greater profits. Everything points towards this unbelievable waste to be real, unfortunately.
ineedasername 4y ago
Does this mean the mining has suddenly become easier & more profitable w/ lower difficulty rates for the remaining 60% capacity to keep it 1 block/10 minutes?
- wmf 4y ago
  No, because difficulty only adjusts every two weeks.
  - lucb1e 4y ago
    You have to spend 40% more time before someone finds a valid hash, but any miner is 40% more likely to be the one to find a valid hash... sounds like that should cancel out indeed but I'm not entirely sure.
    - jallen_dot_dev 4y ago
      You (as an individual miner) would still mine the same number of blocks on average as before, nothing has changed from your perspective (difficulty/hashrate). You would find a larger percent of all blocks mined, but same absolute number of blocks.
  - ineedasername 4y ago
    So a sudden 40% loss in hashrate could substantially impact & lengthen the 10min/block rate, unless there's quite a bit of excess capacity (equivalent to 40%) that could be brought online in response.
  - dwaltrip 4y ago
    Does anyone know if there are good reasons for not adjusting the difficulty more often?
    - rahen 4y ago
      Yes, it could allow to cheat the algorithm. Consider the two weeks period as a strong low-pass filter on cheating tentative. https://old.reddit.com/r/Bitcoin/comments/mtugta/mentor_monday_april_19_2021_ask_all_your_bitcoin/gv86j6b/?context=5 https://old.reddit.com/r/Bitcoin/comments/mtugta/mentor_mond... (the answer from nullc is the most insightful)
deleted 4y ago
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deleted 4y ago
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yunohn 4y ago
This is exactly why crypto is the opposite of disaster resistant. I fail to understand how people expect to use crypto when stuck in a dangerous situation or in the middle of natural/political turmoil.
- everfree 4y ago
  Hash rate dropping by 40% doesn't affect the usability of Bitcoin in any way. There was a disaster, and Bitcoin resisted it. How does that make it the opposite of disaster-resistant?
  - ineedasername 4y ago
    The 10min/block rate-- and subsequent trasactions-- would suddenly take a lot longer under hash difficulty decreases in response. Until then, roughly 40% increase in time to mined block & corresponding decrease in transaction rate, probably an increase in fees to get your transaction included. These are in fact usability issues.
    - everfree 4y ago
      > would suddenly take a lot longer After a 40% hash rate drop, transaction inclusion would take 66% longer on average (1/0.60). So, it would increase from an average of 10 minutes (and potentially up to 40 minutes) to an average of 17 minutes (and potentially up to 50 minutes). I can't imagine any kind of transaction where 10-50 minutes is timely and acceptable, yet 17-67 minutes is unacceptably long. Either 10-50 minutes is already too long/unpredictable, or an increase to 17-67 minutes does not make any difference. > probably an increase in fees Bitcoin's fees did not spike significantly during the one hour between 17:00 and 18:00 UTC.
      - postalrat 4y ago
        Throughput also falls 40%. If bitcoin was being used for anything useful that might matter.
hippich 4y ago
Since difficulty recalculation is based on number of blocks, not time, would a scenario be possible where hashing power keeps crashing constantly pushing block difficulty recalculation in the future and essentially freezing transactions on the network?
- wmf 4y ago
  I don't think there's any kind of feedback loop where a drop in hashrate would cause further drops. Even if hashrate dropped 90% then you'd have to wait 20 weeks for difficulty to adjust but the network would still function somewhat.
  - maxbond 4y ago
    Purely speculating, but there could be a feedback loop if people observed the hash rate plummeting, lost faith in the network's functioning, and selling en masse. The plummetting price would impact the profitability of miners, who might start pulling capacity from the network, confirming people's fears and encouraging more selling pressure.
  - jiggawatts 4y ago
    I did a back-of-envelope calculation that it is possible for BitCoin to get into this kind of death spiral, but it's not very likely. In the hypothetical scenario that the mining rate drops to just tens of percents of the original, then the utility of BitCoin drops because transactions get both slower and more expensive. This could cause a "run on the bank" where people try to get their money out, but can't transact on the network. If the next hash rate change is far enough out and a panic sets in long enough, then BitCoin's value could plummet as users lose all confidence. This can recover, but if it's juuust bad enough to take out more miners via bankruptcy after the next hash rate adjustment, then it can sustain itself. Miners have fiat expenses and BitCoin revenue. If BitCoin drops too fast, they have to cease operations, otherwise they're literally burning piles of valuable currency to make worthless monopoly money they can't spend on anything. It all depends on how long the big miners can "hold out" while being unprofitable, or more importantly.. how long they're willing to risk losing everything they've made until then.
tmpburning 4y ago
https://poweroutage.us/ https://poweroutage.us/
deleted 4y ago
[deleted]

168 points by belltaco 4y ago

cozzyd 4y ago

Those poor miners without their primary source of heat.

deleted 4y ago
[deleted]

MuffinFlavored 4y ago

> The Bitcoin network hashrate has dropped by more than 38.8% from its peak on Wednesday, as many U.S.-based miners have been forced to switch down their facilities due to deadly blizzards Is there any kind of geographical map that shows in which states/cities these hashrates are? I guess there probably isn't good correlation between hashrate + external IP? I wonder how profitable mining Bitcoin is these days at any scale.

sgjohnson 4y ago
> I guess there probably isn't good correlation between hashrate + external IP? Probably not, since you don’t even need to be online at all to mine bitcoin.
- MuffinFlavored 4y ago
  > I'm no expert, but mining is just your computer taking the last valid block and trying to make a new one based on it by guessing a solution over and over. > Every 10 minutes or so, some miner on the network guesses correctly, and their block becomes the new one that everyone uses for their guessing. > If your miner isn't on the network, it'll never be told that some other miner guessed correctly and that everyone else on the network is now working on a newer block. Your miner will keep on guessing, but if it does eventually guess correctly, it won't matter as the network has moved on. https://www.reddit.com/r/Bitcoin/comments/sjfds/why_am_i_able_to_mine_bitcoin_offline_this_seems/c4ei4ve/ https://www.reddit.com/r/Bitcoin/comments/sjfds/why_am_i_abl... Seems kind of inefficient?
- hanklazard 4y ago
  What? A miner needs to be connected to the network to actively mine blocks.
- Ekaros 4y ago
  How do you get transactions if you are air gapped?
  - lucb1e 4y ago
    Or even if you don't care about recent transactions, at minimum you'll need to either own >50% of the hash rate and just make your own chain (good luck) or be online every couple minutes to find the longest chain's block hash value. You don't need fiber internet but just a DSL modem with most-of-the-time connectivity to do mining for contributing to the network's safety, but doing it offline altogether indeed does not really make sense. (If you're doing it for the moneys then you probably do want to get information early (stable, low latency internet) so that you don't waste hash cycles.)
  - tommek4077 4y ago
    The coin is transfered to your public key. This is saved in the public blockchain. Air gap means here, that you store your private keys on a device without internet.
    - lucb1e 4y ago
      That's one way of using the word air gap, but probably not what they meant.
htag 4y ago
> I wonder how profitable mining Bitcoin is these days at any scale. They have calculators for this [0]. The summary is that assuming mining difficulty, electricity rate, and bitcoin value hold constant it's a 10+ year return on the most energy efficient miners, so you're probably better off buying bonds. If you don't have access to very cheap electricity ($0.06/kwh or cheaper) and don't have an efficient way of handling waste heat then it's a non-starter. Even then the price of bitcoin and the mining difficulty are likely to move considerably in 10 years so it's a very risky business plan. [0] https://www.coinwarz.com/mining/bitcoin/calculator?hs=80 https://www.coinwarz.com/mining/bitcoin/calculator?hs=80
- MuffinFlavored 4y ago
  I was aware of the calculators but I was more interested for example like what does one large mining operation (one large enough that when it goes offline during a blizzard, it's a mention-worthy part of that 40% hash rate drop figure) look like in terms of the calculator variables? How many of what piece of equipment do they have, are they getting electricity for $0.06/kwh or less like you said, how are they handling the waste heat? I wasn't aware we had huge mining farms in America to be honest. I thought it was mainly other countries. I'm also not super knowledgeable/in the know about this kind of stuff so, might just be accidental ignorance on my part.
  - htag 4y ago
    1. USA has pretty cheap electricity globally. I'm not surprised to see lots of mining here. 2. The blizzard probably took multiple mining operations offline. Large parts of the US are experiencing very cold conditions. 3. Maybe Rockland, TX has the most PR about currently operating large miners in the US. I think they have a contract for ~$0.03/kwh and purchase hundreds of megawatts [0]. It's tens of thousands of miners. [0] https://www.wired.com/story/hard-luck-texas-town-bet-bitcoin-lost/ https://www.wired.com/story/hard-luck-texas-town-bet-bitcoin...
    - MuffinFlavored 4y ago
      How much money does one of these operations roughly make and what was the startup cost?
latchkey 4y ago
> I wonder how profitable mining Bitcoin is these days at any scale. It boils down to a function of Capex and Opex. Today though it is a bit more complicated. Given that the bitcoin price goes in cycles, it is less about the current profitability and more about the ability to weather bear cycles. Miners now will hold as much as possible and then take profits when the prices go up again. Sometimes, they borrow against their existing holdings to buy more hardware. During bear cycles it is far more risky to setup a new mining operation, especially when presented with the ability to just market buy BTC in large enough quantities to not affect price. To answer your question though, it makes almost no sense to start a mining operation these days. You're competing with much larger players who have much deeper pockets. If you're doing just a small operation, the difficulty adjustments will hurt you more than a larger player who's lighting up thousands of machines at a time.
- lottin 4y ago
  Imagine if copper miners held on to copper in the hope that it will go up in price. Taking a risk that is both unnecessary and unrelated to your business is stupid. That's the opposite of what a well-run business does.
  - britneybitch 4y ago
    That behavior is more common across industries than you might think. One example: https://markets.businessinsider.com/news/commodities/natural-gas-europe-lng-ships-wait-offshore-maximize-price-rise-2022-11 https://markets.businessinsider.com/news/commodities/natural...
  - latchkey 4y ago
    Copper miners control production output [0], which defines the price. Bitcoin miners don't directly control production. They'd need to fork and get 51%+ to follow that fork. [0] https://seekingalpha.com/article/4546309-ivanhoe-mines-upside-potential-awaits-copper-next-rally https://seekingalpha.com/article/4546309-ivanhoe-mines-upsid...
    - deleted 4y ago
lucb1e 4y ago
> Is there any kind of geographical map that shows in which states/cities these hashrates are? https://ccaf.io/cbeci/mining_map https://ccaf.io/cbeci/mining_map I didn't know this existed but randomly saw it in the website's menu while researching another comment. It even drills down to state level in the USA and province level in China if you click the button at the top of the map. Georgia is popular in the USA, anyone know why?

_fizz_buzz_ 4y ago

It seems it has already recovered: https://cointelegraph.com/news/bitcoin-hashrate-recovers-after-big-freeze-shuts-down-miners https://cointelegraph.com/news/bitcoin-hashrate-recovers-aft...

modeless 4y ago

Wow, I had no idea that much hashrate was in the US now. A much better situation than when it was in China, IMO.

Jensson 4y ago
Not good for Americans though since their electricity gets more expensive.
- deleted 4y ago
  [deleted]
- walkhour 4y ago
  Sure but we need numbers, how much more expensive is it, is it 1%, 10% or 100%. Because just saying "more" is compatible with the energy being 0.000001% more expensive. So your comment in not really saying anything.
  - ajkjk 4y ago
    Defensive much? It's more, and probably by more than 10^-9, and the point is allowed to be posted even if it doesn't include exact numbers.
    - fabianfabian 4y ago
      Numbers please, because it seems you haven't considered the possibility of it being cheaper. The practice known as curtailment, is a way for miners to help electricity grids. The miners' steady demand ensures power producers are bringing in revenue to offset costs, but can power off when demand from other sources is high, such as during winter storms.
      - onlyrealcuzzo 4y ago
        Proof works both ways. Show me empirical evidence what you described is actually happening on a large scale.

lucb1e 4y ago

https://www.statista.com/statistics/881472/worldwide-bitcoin-energy-consumption/ https://www.statista.com/statistics/881472/worldwide-bitcoin... 40% of latest value (November) would be 116×.4=46 TWh ("estimated") or 78×.4=31 TWh ("minimum"). USA uses 4223 TWh per year (Wikipedia "Electricity sector of the United States", 2018), so Bitcoin uses around 1% of the USA's electricity per year (1.09%, or 0.73% for the minimum value). The lower value is truly a minimum of minimum, as I understand it, because (1) not everyone will have been unplugged, and (2) the source "minimum TWh" value makes unlikely assumptions about the efficiency of every miner (latest equipment, no overhead). At "7.09 × 10⁻⁴ metric tons CO2/kWh" in the USA https://www.epa.gov/energy/greenhouse-gases-equivalencies-calculator-calculations-and-references https://www.epa.gov/energy/greenhouse-gases-equivalencies-ca... (709 grams per kWh; 2019) this seems to come out between 22 and 32 million tonnes of CO2 per year, and iirc the average first-world person uses just over ten tons (ten thousand kilograms) per year so this is the equivalent of having an extra 2.2–3.2 million rich people on the planet (just the USA consumption, not Bitcoin's consumption elsewhere or other PoW currencies').

lettergram 4y ago
I’m going to go out on a limb and say I don’t believe this. I simply don’t believe anywhere near the figures people use for the energy used to mine Bitcoin. Drive down your street, look at all the businesses with their power on, all running computers. Every home running lights, fans, computers, video games, TVs, etc. then we have industrial manufacturing, etc. You mean to tell me there’s some people in a warehouse around here with racks of servers running hashes? Just hashes, not a data center. We’d need hundreds of those warehouses to be 1% of the On-grid power. Sorry, I don’t buy it.
- pclmulqdq 4y ago
  There are thousands of those warehouses, but they are concentrated in areas where power is really cheap.
- lucb1e 4y ago
  That's fine, please run the math again then. (Edit: I did not downvote, it's a legitimate question /edit) I've done it myself also in the past because, like you, I couldn't believe it either (this was around 2018 I'd guess). It's a fairly simple calculation to take an energy-efficient graphics card and see how many SHA2 hashes per second you can get from that, see its energy consumption (ignore the rest of the computer and connectivity to support the GPU for now), multiply that with the hash rate, et voila you get some ridiculous number (don't remember, but something like half the world's energy consumption). This indicates that all Bitcoin miners are using ASICs. Now the question becomes how efficient a Bitcoin ASIC is, and when you hunt for that number and plug that in, the result is in the same range as what the news has been saying. Edit: if you want to take a shortcut and use a readymade hashes per gigajoule value from last summer, see figure 1 here https://ccaf.io/cbeci/index/methodology https://ccaf.io/cbeci/index/methodology </edit> It also roughly works out when you look at kWh costs versus Bitcoin profit per consumed kWh, so the figure is not unreasonable. People would be leaving money on the table if their real electricity consumption were lower, because then they could add more equipment and make greater profits. Everything points towards this unbelievable waste to be real, unfortunately.

ineedasername 4y ago

Does this mean the mining has suddenly become easier & more profitable w/ lower difficulty rates for the remaining 60% capacity to keep it 1 block/10 minutes?

wmf 4y ago
No, because difficulty only adjusts every two weeks.
- lucb1e 4y ago
  You have to spend 40% more time before someone finds a valid hash, but any miner is 40% more likely to be the one to find a valid hash... sounds like that should cancel out indeed but I'm not entirely sure.
  - jallen_dot_dev 4y ago
    You (as an individual miner) would still mine the same number of blocks on average as before, nothing has changed from your perspective (difficulty/hashrate). You would find a larger percent of all blocks mined, but same absolute number of blocks.
- ineedasername 4y ago
  So a sudden 40% loss in hashrate could substantially impact & lengthen the 10min/block rate, unless there's quite a bit of excess capacity (equivalent to 40%) that could be brought online in response.
- dwaltrip 4y ago
  Does anyone know if there are good reasons for not adjusting the difficulty more often?
  - rahen 4y ago
    Yes, it could allow to cheat the algorithm. Consider the two weeks period as a strong low-pass filter on cheating tentative. https://old.reddit.com/r/Bitcoin/comments/mtugta/mentor_monday_april_19_2021_ask_all_your_bitcoin/gv86j6b/?context=5 https://old.reddit.com/r/Bitcoin/comments/mtugta/mentor_mond... (the answer from nullc is the most insightful)

deleted 4y ago

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deleted 4y ago

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yunohn 4y ago

This is exactly why crypto is the opposite of disaster resistant. I fail to understand how people expect to use crypto when stuck in a dangerous situation or in the middle of natural/political turmoil.

everfree 4y ago
Hash rate dropping by 40% doesn't affect the usability of Bitcoin in any way. There was a disaster, and Bitcoin resisted it. How does that make it the opposite of disaster-resistant?
- ineedasername 4y ago
  The 10min/block rate-- and subsequent trasactions-- would suddenly take a lot longer under hash difficulty decreases in response. Until then, roughly 40% increase in time to mined block & corresponding decrease in transaction rate, probably an increase in fees to get your transaction included. These are in fact usability issues.
  - everfree 4y ago
    > would suddenly take a lot longer After a 40% hash rate drop, transaction inclusion would take 66% longer on average (1/0.60). So, it would increase from an average of 10 minutes (and potentially up to 40 minutes) to an average of 17 minutes (and potentially up to 50 minutes). I can't imagine any kind of transaction where 10-50 minutes is timely and acceptable, yet 17-67 minutes is unacceptably long. Either 10-50 minutes is already too long/unpredictable, or an increase to 17-67 minutes does not make any difference. > probably an increase in fees Bitcoin's fees did not spike significantly during the one hour between 17:00 and 18:00 UTC.
    - postalrat 4y ago
      Throughput also falls 40%. If bitcoin was being used for anything useful that might matter.

hippich 4y ago

Since difficulty recalculation is based on number of blocks, not time, would a scenario be possible where hashing power keeps crashing constantly pushing block difficulty recalculation in the future and essentially freezing transactions on the network?

wmf 4y ago
I don't think there's any kind of feedback loop where a drop in hashrate would cause further drops. Even if hashrate dropped 90% then you'd have to wait 20 weeks for difficulty to adjust but the network would still function somewhat.
- maxbond 4y ago
  Purely speculating, but there could be a feedback loop if people observed the hash rate plummeting, lost faith in the network's functioning, and selling en masse. The plummetting price would impact the profitability of miners, who might start pulling capacity from the network, confirming people's fears and encouraging more selling pressure.
- jiggawatts 4y ago
  I did a back-of-envelope calculation that it is possible for BitCoin to get into this kind of death spiral, but it's not very likely. In the hypothetical scenario that the mining rate drops to just tens of percents of the original, then the utility of BitCoin drops because transactions get both slower and more expensive. This could cause a "run on the bank" where people try to get their money out, but can't transact on the network. If the next hash rate change is far enough out and a panic sets in long enough, then BitCoin's value could plummet as users lose all confidence. This can recover, but if it's juuust bad enough to take out more miners via bankruptcy after the next hash rate adjustment, then it can sustain itself. Miners have fiat expenses and BitCoin revenue. If BitCoin drops too fast, they have to cease operations, otherwise they're literally burning piles of valuable currency to make worthless monopoly money they can't spend on anything. It all depends on how long the big miners can "hold out" while being unprofitable, or more importantly.. how long they're willing to risk losing everything they've made until then.

tmpburning 4y ago

https://poweroutage.us/ https://poweroutage.us/

deleted 4y ago

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