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"If you can specialize [...] then the system breaks down. Spammers pay less than users." That's not at all what happened in practice. You see, in the Bitcoin i

by mrb 3y ago

"If you can specialize [...] then the system breaks down. Spammers pay less than users." That's not at all what happened in practice. You see, in the Bitcoin industry, those who specialize, those who design and manufacture ASICs, realized that selling them on the open market is equally profitable as mining with them. As a result, even the small miners, the common guys, have access to the same hardware as the large scale miners. That's why today anybody can get, say, an Antminer S19. So spammers do NOT "pay less than users". We all pay the same amount of money for the same compute power. In fact, the cost curve of mining somewhat advantages small miners. The guy with a single Antminer S19 in his garage may not need to have dedicated cooling because cracking open a window may be sufficient. Whereas the large-scale miners definitely have to incur significant cooling costs. However they can cancel out these scale issues by, notably, choosing to set up their mining farm where electricity is cheap.

kmeisthax 3y ago
If you're even considering buying dedicated mining hardware, you're already way more specialized than the average user of Bitcoin. Diseconomies of scale at the high end don't stop Bitcoin mining from being an extremely unequal gated community relative to the average user with a smartphone in their pocket. In fact, this is the main reason why the Bitcoin core development team has largely rejected proposals to, say, determine acceptable maximum block size[0] through miner consensus. How much data a miner can process is likely to be far higher than that of casual users, who aren't going to be mining and thus have no franchise. As for the scale issues you mentioned, wouldn't dedicated cooling be more efficient per hash? That's the metric that matters for Proof of Work. [0] Either the base block size or SegWit weight units, both of which are locked at 1kb/4kwu forever.

by mrb 3y ago

kmeisthax 3y ago

If you're even considering buying dedicated mining hardware, you're already way more specialized than the average user of Bitcoin. Diseconomies of scale at the high end don't stop Bitcoin mining from being an extremely unequal gated community relative to the average user with a smartphone in their pocket. In fact, this is the main reason why the Bitcoin core development team has largely rejected proposals to, say, determine acceptable maximum block size[0] through miner consensus. How much data a miner can process is likely to be far higher than that of casual users, who aren't going to be mining and thus have no franchise. As for the scale issues you mentioned, wouldn't dedicated cooling be more efficient per hash? That's the metric that matters for Proof of Work. [0] Either the base block size or SegWit weight units, both of which are locked at 1kb/4kwu forever.