Bitcoin Forum

The ethos behind bitcoin is fantastic but their is a fatal flaw that is being highlighted at the moment and that is the difficulty. It only leads to one logical conclusion the centralisation of mining and transaction processing as that will be the only way you will be able to generate any coins.

ASICMiner has some problem at the moment and because they are so large it has impacted the entire network. If another big mining pool goes down we may be looking at 40 mins between blocks maybe even longer - transactions are not processed if no blocks are solved.

The whole resilience of the network is being brought into question here - If these guys go offline for what ever reason with the difficulty where it is now everything is going to grind to a halt. A couple of business should NOT have this impact on the network.

What are your thoughts on this?

I'm no expert but I thought that if there are fewer mining rigs the difficulty rate automatically adjusts downwards?

Only after a period of time - quite a large period of time at that. Transaction processing is the issue here - Bitcoins can not be used if you can not process the transaction. If that is the case people will loose confidence and then it is a death spiral.

If you were trying to pay for something and ASICMiner decides they have to power down for what ever reason  it almost doubles the transaction processing time. You can not have that much control in the hands of a few people - otherwise we are back to Central Banks.

I see. Like when a nuclear power station goes offline rather than a couple of wind turbines.

How long does it take to adjust then?

The thing is this - regardless of the technology once everyone has ASICS we will still be in the same boat. The difficulty will have just increased accordingly but that would not change market share and if ASICMiner are still 1/4 of the network - the problem still exists.

If you check the Network hashrate you will see there has been an unprecedented drop and that is due to ASICMiner loosing only 1/2 their capacity for whatever reason.

If 50BTC goes down as well then what we would be looking at months between an adjustment.

I can not see a solution to stop centralisation as difficulty keeps increasing.

This is a very serious issue - once it is centralised to that degree it is a single point of failure.

Use Litecoin.

There is no ASICs at all, furthermore transaction is four time faster in ordinary state.

Everyone who can should run a USB ASIC miner (or more) that would help a little with decentralising.   It's a shame they're priced a bit high though.

There are several asic manufactors entering the market like knc , bitfury, avalon b3 ... no need to worry imo

The USB Miners would not help man - You would more than likely point it a mining pool as you could never solo mine with it. At this difficulty it might take 10 years or never to solve a block and that is if the difficulty does not increase.

Just because it's an ASIC doesn't mean it's more efficient than a GPU. Those will have to be a lot cheaper before they really make any difference.

Dude this does not change the market share - and people will still point them at mining pools.

Bitcoins by their very nature cause centralisation because of the difficulty.

Put it like this - if you could mine solo and still receive the same reward that you do from a mining pool you would not use the mining pool.

Agreed, but it does open it up mining to a wider group of people with, e.g. a notebook, or a MAC, etc. that aren't running GPUs.

I know it's not brilliant, but it's a step in the right direction.  And I see a new pool being setup which is also needed - diversity in equipment and pools.

I'd love to get a 28nm ASIC setup but realistically can't expect a large percentage of users to buy these.  So the centralization looks set to continue...

And that is the problem man - nothing will stop centralisation at this rate. When the difficulty reaches 1 billion there will only be a few pools with enough hashing power to solve anything.

It will be so far out of reach of the ordinary man they might as well be a central bank

Perhaps we should target, e.g. 10 or 20 pools, each with no more than 10% or 5%.  Heck 50 or 100 pools with 2% or 1% share.

Surely that's would help and is achievable.

It is impossible to enforce - pool operators want as many users as possible so they can collect more fees. Even if most agree - some will not and lots of users will end up on them because the payouts are more consistent.

The trouble is we are greedy bastards by our very nature :)

^ I don't see a way around this hurdle. 

So we agree this is quite a big issue.

I am going to put my neck on the line hear and state this is going to cause the downfall of bitcoins.

I don't understand when they developed it why they did not make the difficulty fixed and vary the reward to maintain the steady creation of coins. This way you can mine solo.

This is indeed true.  

But do not users with a healthy balance of coins owe it to themselves (for the long term value of their coins) to help in this goal, by

1) running a full node  
2) mining  
3) supporting the new/smaller pools

..?

Man that is a very tall order and we both know that they will not do that.

For example on another thread about "regulating bitcoins" the biggest argument for regulating them is they will increase massively in value - even though it would destroy everything they stand for.

https://bitcointalk.org/index.php?topic=192924.msg2522678#msg2522678

I suggest reading through and then you will realise the gravity of the situation.

This is what you are up against - personal gain first and to hell with everyone else. With attitudes like that there is really no hope.

Agreed.  It is probably -the- issue.

I can only hope you're wrong.

As I'm sure you know, the client was also (with a single click) a miner.  Obviously things got out of hand somewhere along the line :)

Single click and it was a miner - those were the days :)

The trouble is dude we need more than hope here we need some concrete facts.

Unless someone can come up with some phenomenal explanation of why this will not happen it makes the BTC game a very high risk venture.

I will be honest I am very close just to throwing the towel in even though I really enjoy the whole BTC arena. But its long term prospects are not good.

I have a feeling many other small miners are in the same boat and not because of the long term prospects because of the ridiculous difficulty level and the inability to get their hands on ASIC's as they are such an exclusive technology and will be for the foreseeable future.

Statistically, even if hashing is at the target rate then once every 48 hours there will be at least one block that took an hour to solve.  Can you remember even one time that this was a significant problem for you?

And if one pool suffers technical issues those miners will just switch to another pool.

As far as this being a problem if hashing capacity drops below target and that persists for a couple weeks ... there is little difference between six confirmations taking an hour versus six confirmations taking two hours.

With most of the costs for ASIC mining being fixed (i.e., for the purchase of the equipment), there is little reason why hashing capacity would suddenly drop dramatically.  

Man if 50btc goes down how many other mining pools could cope with that surge of users - It is quite likely the other pools would be knocked out from the sudden increase in traffic further compounding the problem.

Plus with all the DDOS protection they now run - it is quite likely it would kick in as it would see the sudden increase as an attack.

So at 10 min intervals it can take 1 hour every 48 - OK was not aware of that. Using the same argument if the interval jumped to 30 mins then every 48 hours it could take over 3 hours?

Pooled mining has been going on for almost three years now, and the problem you are describing has never happened.  Therefore, it is not really a problem worth worrying about.

Dude come on ? Just because it has not happened yet it will not happen. That is insane.

To give you an analogy - because my house has never burnt to the ground it is therefore not a problem and will never burn down?

The potential is always there.

Give me some real facts why it could not happen.

It only opens it up to a wider group of people that can't do math well enough to realize they'll never even break even.

If one or even few of the biggest pools goes down, miners will switch to another pools. They will survive, don't worry, rovchris. In addition, there is p2pool.
Increasing of transactions time is also not a big problem - if it be perceptible, users will begin to add more fee to their transactions which would entail increasing of miners profit. This mean more hashing power in the network. So the problem will be solved.

Mate I do worry - Prove that the other pools can cope with that sudden influx of load. The most likely scenario is they will head for the next biggest pool (BTCGuild?) and then that will go down like a house of cards and as you go down the chain each pool can cope with less load. Its quite feasible that the miners themselves will accidentally knock the pools off line as their fail overs are handled automatically by the mining software.

Also prove that the smaller pools are not going to die off further as the difficulty increases and their hashing capacity does not grow accordingly .

BTCMine.com is a perfect example - I will be amazed if that is still around in a few weeks. Currently its at 10 days and still has not found a block and could possibly go to 30 days based on 90 million shares which is what one round was on Slush's pool. Those miners will leave because they can not go that length of time without a payment. They will almost certainly move to Slush's pool as it is the only other score based pool. Ill be honest I already have.

Any large company that would like to involve themselves with Bitcoins will be looking at these factors. I can tell you categorically that they will not touch BTC with issues as big as these.

The other issue is - with a few big pools it is much easier to compromise the network.

You may only have to DDOS 5 sites and then everything stops. Where as if it was highly decentralised by solo miners it is impossible to DDOS.

Bitcoins have morphed into something never envisaged by Satoshi and that is quite clear if you read the whitepaper. One of the founding features was decentralisation.

None of you guys have made it clear why the network is not going to get more centralised!

Is it not the pool operator that dictates the transaction fee and not the miner?

It's foolishness to rubbish this point of view. Yes the OP is probably talking with a very pessimistic view but everything he has said is plausible, although highly unlikely.

Prove is the money. If one of the biggest pools goes down, other, in fact, will be delighted (not for public). This mean a significant increase of their profits. They will make decent investments in infrastructure and will be vying with each other to offer their services to freed miners. Big pools holders isn't poor people, they have some money for business expanding in suitable moment.
In addition, there is p2pool.

Man what you have just said reinforces the fact that pools will become more centralised. If the cost of setting up a pool increases to the point where you need that level of redundancy - the barrier to entry is raised even higher further pushing out the little guys and consolidating the power in even fewer hands.

Guys you are not convincing me.

No. It's more like you are saying that every building is doomed because you just realized that it might happen that firefighter crews are busy at two other building which are on fire at the same time, and it happens that the remaining crew gets stuck because of a mechanical breakdown of the truck en route to the site. That is insane. My argument was not insane.

Why it could not happen: for the same reasons it hasn't happened up to this point, even though pools were hacked, DDoSed to death, huge farms of GPU and FPGA and now ASIC miners came online. It hasn't happened because in reality bitcoin mining is much more resilient, and network does not come down "like a house of cards" when a major miner goes offline.
Sure, if Bitcoin continues to grow, mining will inevitably become a specialized (but not necessarily centralized) industry. There will be no more hobby miners, much like most of radio today is a regulated big business. But we are not there yet. There will be proprietary, closed-source ASIC miners competing with each others, there will be large co-operative companies where you or I can join, there will be Bitcoin businesses who also mine simply because they have vested interest in securing the network, there will be a rush to cheap electricity once technological bottlenecks are reached, there will be technological breakthroughs, there will be ASIC heaters in cold regions...

It's good that you are worrying, but man you are worrying about the wrong things.

The amount of whining around here is just amazing.

People bitch about hash rate going up causing the difficulty to go up. (That was last week).

Now that the hash rate has gone down, they bitch about the time between blocks going up. (That's apparently this week's bitch).

Then people complain about the price going up, the price going down, the percent of the network of this or some other pool.

Not to mention delays of X company shipping Y vaporware ASIC crap.

You guys are worse than the hormonal induced fertility forums my wife used to visit.

And let me tell you, when you have women stimulated by 10 times the normal level of hormones, they bitch a lot.

You guys take the cake, however.

Sheesh...

Who is whining?

That was a good response man - but do you not feel that making it specialised goes against why it was created in the first place? The more specialised it becomes the fewer people can get involved and then we end up with a situation similar to the current banking model where a select few are in control?



                                                                   

I used to feel that way, but then I grew to realize that Bitcoin, much like any other technology, is ideologically neutral. Anyone is free to use it however they see fit, and boy is it versatile! While a majority of us in this forum likes to see it as a tool to more freedom from central powers, it can very well be used by central powers to achive level of financial control impossible today. It's not a popular thing to point out around here. In Bitcoin's defense, the public nature of the ledger does enable tracking, but it enables it for everyone. But I digress. The point is, Bitcoin can be useful in many ways, and you might not like all of them.

Think radio, or printing press, or the Internet. These are similarly enabling, revolutionary technologies, that throughout history went through different phases, from freedom-enabling, to propaganda, to education, to surveilance, to central control, to revivals, back-and-forth... Ideas that Bitcoin is based on are no different. It will be whatever people make it to be, and you and I have only so much influence in the big scheme. Ultimately, do what you think is right, and don't worry. Mining included.

If this is really a crippling problem, it seems like there would be a relatively easy solution to it: release an update that makes the difficulty adjustment happen more frequently.  Thus with this flood of ASICs come on the market, maybe it'll adjust in a day or two rather than two weeks.  Wouldn't that just totally solve the problem?

BitFury !  As I read on their web pages :

110 Gh/s overall performance
10 kW power consumed
Under $100'000 estimated cost to build

Wow, as power hungry as a furnace, priced like a small house, for less Gh/s than 2 Avalon ???

Is it serious ?

Greedy bastard by our culture, not nature.. a change in our personal value must occur.. 

Thats an FPGA. Bitfury ASIC chip is being tested and seems to be much more efficient than any other chip available. First batch device shipment is planned for August. 120Gh/s at about 100 Watt

Clearly the solution is to distribute currency in a pyramid-like fashion to achieve this goal.

I think the OP and most people here do not understand how pools work and how they can work to create 100% uptime.

Coming from experience in the web hosting industry, there is something we call "cloud hosting" where instead of being hosted on one server, you are actually on a network of servers, therefor if even 50% of the servers were to say, shut off, you are still online.

Also think about how Google and Facebook operate, they use similar networking methods.

The answer to what you believe is a problem is simple---to use cloud web hosting/computing that basically guarantees 100% uptime..

The pools could also have server backup after server backup meaning possibly one server goes down/breaks a new one takes over.. You have so many methods of creating pools that would never go down.

5-10 years ago this would be a problem, but not today. -- we haz da technology!  :P

If you are still having issues understanding cloud hosting..
http://en.wikipedia.org/wiki/Cloud_computing
http://www.webhostingtalk.com/showthread.php?t=1269145

/endthread

Would people running these asic miners as lone miners help, even if they never profit?

How much would it cost for me to get a basic miner I can plug into my router and just let it sit there, for no other purpose than to help in the event a pool goes down? Or is that just not needed?

It would only help if you had enough hashing power to actually solve a block, otherwise you would have to join a mining pool and then we don't actually solve the problem it just makes it worse.

Bitcoin by its very design is causing centralisation.

I realise there are people that will blindly accept the Bitcoin is the greatest thing ever but this is a fundamental flaw.

Fast forward 1 year when the difficulty could be near a billion then what is going to happen?

Simple truth is this - if you counted the number of mining pools that were around 1 year ago and compare that number today there are probably less than half. Its not difficult to draw a graph and extrapolate how many mining pools will be around in 1 years time.

At the moment Bitcoins are not too centralised but 1 year - 2 years its going to be a mess.

Good god, read what I said above. You are so wrong it isn't even funny.

interesting discussion. From what i understand, the mining rigs are already distributed, only the pools, which essentially are just software, are centralised. So if a pool goes down, surely they can just switch servers? What am i not getting?

Nice idea.  The problem is that then the block creation rate would increase out of control, you'd have way too much orphaning and block chain bloat.  Take a closer look at Liquidcoin experiment.

And to the OP, there are a couple solutions.  One, is that miners have a bit more control over which pools they mine for than say, citizenry can decide which country to live in.  If a pool does get out of control and start messing with fee structures and TX insertion, people can move without totally abandoning their life.  Two, is that centralized massive pools still won't be able to keep the money supply hidden and create new coins like the central banks have done.  That will be for the next payment layer on top of bitcoin ;)   

the fee structure would kick in if any of those catastrophic disaster scenarios happened, drive the fee price up offsets the loss in hash power. The ASICs right now are an issue, driving the difficulty up that high and dropping it all of a sudden would increase the time for a block by 100%. If it is known immediately, the fee structure can be implemented to saturate the blocks in the 20 minute period that will occur for 3 weeks; doubling the transaction per block would increase the fees within a day drawing reserve power from hibernating miners the moment they heard the news.

Thank you for explaining the difficulty / coin value issue - it is like trying to get blood out of a stone round here for informative information

I followed this thread with great interest and I was glad you kept coming back to the question. Does hashman's answer resolve it? If so, that's great and it leaves a useful trail. If not... it's better to hammer this stuff out by discussing hypotheticals than to have it appear unexpectedly in the wild.
 

It takes days for a wire transfer or a check to clear with massive fees :P

You really need to look at what bitcoin is equivalent to.

what about mining insurance company?

you have X mining capacity, and a company buys all of your capacity in return they pay you a steady rate of bitcoin minus some fees.

that would allow solo mining right?

Wire transfers are almost instant now - and cheques are being phased out.

You need quick confirmation times otherwise you will never be able to purchase items in shops - if someone is trying to pay at the checkout and they have to wait a few hours before they can take their goods - it is not going to work

There are green addresses that can alleviate some of that, though I personally don't care if bitcoin ever makes it into the local walk-in market. I just want to use it in the digital world.

You might not personally care - but for Bitcoin to be a success issues like this need to be resolved.

Your response sums up quite nicely how most of the bitcoin community behaves. I am ok Jack but screw the rest of you.

The more time I spend on this forum the greater my concerns are about the long term viability of this project.

There may as well never have been a whitepaper because so few people understand why Bitcoins were created.

Sounds like a job for plain old fashioned redistribution of wealth through abolition of state protection structures.

Can anyone talk about the feasibility of creating a "Pool" whos sole purpose is to equally distribute its hashing power among existing actual pools?  This could be just some sort of accounting method where you create an account, even perhaps choose a list of requested pools, then receive payments based on your contribution.  The "middle" pool structure could then be responsible for automatically adjusting if/when one or more of the actual pools "go down".

I feel that this could *HELP* resolve some of the panic mode responses to pool issues.  Not sure if it would actually help bitcoin in the long run.

Thoughts?

That is a nice idea - but the pool responsible for distributing the hashing would then be the point of centralisation.

Someone else mentioned the P2P pool  - I read the link but I will be honest it made little sense.

Lol, I hear you there.  Extensive filtering, skimming skills required around here after the huge increase in posts over the last 6 months.  Unfortunately a lot of the really knowledgeable posters are harder to find these days, which is why you have to settle for my answer ;) 
 

This thread is full of uneducated people.  ::)

I don't think so, I don't think bitcoin needs instant transactions to be successful.
And there are green addresses that allow that for those who do really need it so the problem is just ignorance of those who need it but don't know about green addresses.

https://en.bitcoin.it/wiki/Green_address

If half of the network goes down, it would take 4 weeks to adjust the rate. But on the other hand bfl and avalon has started shipping more of the pre ordered units so it could still compensate to some extent. If we successfully touch the next difficulty change whether higher or lower, it is a new life to start with. so i guess i m not that much bothered if one or few mining farms goes offline - more over this will be an incentive for new ones to take birth

Tell me how I'm supposed to do any transaction in person if we have to wait 2 hours for confirmations? They'll have to start putting movie theaters on every corner to help pass the time. And if you have to pay for breakfast and buy gas on your way to work, you won't get there until it's lunchtime.

Entire consumer economies function based on a payment method (charge card) which has confirmation times measured in weeks or months and yet merchants still somehow find a way to make it work..

I don't think bitcoin is the best solution for every transaction scenario. Just like I don't think Linux is the best operating system for every computing scenario.

With respect to paying for things in person, for small value items there's a certain amount of trust. You trust that the person isn't going to reverse the transaction and if they do, you either eat the cost (happens a lot in business now) or you file a police report.

For things like buying gas, I expect a layer between bitcoin and the gas pump if that ever takes off. As in once a week, I pay coins to my gas card and once they are credited, I can use the gas card at the gas pump.

Infrastructure will be built on top of bitcoins to deal with a lot of that, very profitable infrastructure.

While ASICminer certainly has a large chunk of the network they do have a profit motive to maintain their hashing power or sell that equipment. That generally will keep their contribution to the network fairly constant.

I think the biggest worry when it comes to ASICminer and centralization is the threat of their operation being shut down by the Chinese government. If they become aware of Bitcoin they would likely see it as an obvious weakness to attack. If ASICminer was shut down all at once there would definitely be big problems for Bitcoin.

I've read from a Chinese person who posted here that even though state TV mentioned Bitcoin they really are not aware of it yet. That might change as it becomes a bigger deal and more people use it.

Weeks or months?? We're in the 21st century now, we don't use mechanical Visa machines with carbon paper anymore...

They have a motive to maximise their profit without any resilience is the issue.

I can guarantee they have no disaster recovery site as I doubt they would have a second data centre full of ASIC's just sitting around not mining in the event the primary centre goes down.

To me this is a price they should have to pay - it is their duty to ensure they do not disrupt the network and the transaction times considering they are profiting so heavily. Not doing this is a disservice to the rest of the community.

Basically they should not be so f**king greedy - they are behaving in the exact manner bitcoins were meant to stop. I find it amazing how tolerant everyone is of this behaviour.

LOL spot on man

Since you're such an expert on how electronic payments work, you can describe the process of what happens when you swipe your card and how those various steps map onto the same process in Bitcoin, right?

Just in case this hasn't been brought up, this has brought other coins to their knees in the past. With a lot of the altcoins, there's a spike of interest, then everyone quickly moves on to the next coin. It's not a big problem if you're frequently adjusting difficulty, and adjusting difficulty too often can present its own problems (if it were changed every ~1 day, ASICMiner and a couple other major players could collude to shut their miners off for a day, then flip them all on when difficulty changes to try easier double-spends -- the flip-side to that would be that longer difficulty windows would also give malicious miners more time to try double-spends at an "artificially" lowered difficulty).

Kind of a "fucked if we do," "fucked if we don't" situation, and we're in a pretty critical time right now, where there are a few people and companies making up over a quarter of the network. Just be glad Voorhees isn't running ASICMiner and trying to do artificially lower difficulty to "encourage development." :p

Actually, hash rate's spiking to such an extreme, we might find ourselves with a 7-day difficulty window, which I'm not sure has happened yet (except maybe in the first weeks of Bitcoin's existence). This is obviously very dangerous, and people should be waiting for more confirmations during these times (6 is probably still more than enough) when network hash rate is increasing at such a shocking rate.

Altcoins provide a powerful incentive to undermine Bitcoin's network.

Consider a situation where Bitcoin's price declines to, or stagnates at, a level that is no longer considered profitable by the miners or pools with the most hashing power. Suppose further that one of these miners/pools has enough power to sustain a prolonged 51% attack, or launch short but repeated attacks, sufficient to irreparably damage confidence in Bitcoin. This would result in immediate and intense competition among the most popular alts for Bitcoin's throne.

If the deviant miner/pool had invested in one or more of these alts before the attack, they stand to make a fortune afterwards. Further, if enough coins were purchased, the miner/pool could even control the early stages of competition with buy and sell walls. Such control could be used to maximize profits but is unnecessary, as the alts would rise in value without manipulative pressures while they are filling the void left by Bitcoin.

There is a fortune to be made through destroying Bitcoin.

I'm curious too.

It is to do with double spending - If a transaction took that long to be processed what is stopping you spending everything in your account 20 times over.

When purchasing on a card -there a several payment states - pre auth and post auth. So when you are online and purchase something from a website the value of the purchase is "reserved" on your account known as pre authentication.
e.g. You have £1000 and you spend £200 the £200 is immediately reserved as a pre auth transaction. If you checked you account balance at this point it would read as £1000 but you would only be able to spend £800. When the item is dispatched the transaction is changed to post auth and the £200 removed from the account. If the transaction were not immediately verified there is nothing stopping you spending more money than you have.

If a vendor does not immediately validate the transaction and tries to do it at a later point after you have spent all your money the bank would then just decline it and the vendor would have lost their product and revenue.

When purchasing in a shop it just goes straight to post auth and the money removed there and then.

So to equate to Bitcoin - if you pay for something with bitcoins and the vendor does not wait till the transaction is confirmed and you have left the shop - he would loose the product and bitcoins.

Just because the money does not immediately show in the vendors account (banks like to sit on it for a bit extra money for them) it does not mean it has not been debited from the purchasers account.

If you take cheques for example - that is why you have a cheque guarantee card - the bank is committing to that spend even if you do not have the money (but they will fine you and charge you interest when you are overdrawn) you can not do that with Bitcoins.

The point is that a merchant who accepts a card payment has to wait a lot more than 10 minutes in order to get the same assurance that a transaction will not be reversed as a 1-conf bitcoin transaction provides.

If you compare like to like, then Bitcoin is extraordinarily fast compared to the legacy payment system.

When I go into a restaraunt, I get a nice meal before they even swipe my card.
I don't think lack of instant auth is a problem most places.

Some people will abuse it, just like they do now, and they eventually will be arrested for it.

Does Bitcoin have a system wherein the clients will simply reject to accept and retransmit a transaction if they have said transaction in their memory pool, even if that transaction hasn't been included in a blockchain yet?

I actually used to work at a credit card company about 20 years ago and have since been involved in programming e-commerce applications, so yeah, I think I know a little about how it works. ;)

Ah, if you're talking about a transaction not being reversible, yes, that can take months. But that's actually another problem with Bitcoin - the typical consumer is going to get scared off by the irreversibility.

That is a theory which so far the evidence does not support, given that BitPay continues to see healthy growth in their transaction volume.

Ah, but BitPay users don't represent the typical consumer. ;)

I'll provisionally accept that as a plausible hypotheses until we have enough data to say one way or the other.

Massive pool goes down, more people start mining because they're more likely to get the block.

Just like any other economy, don't screw with it and things will balance themselves out.

If a massive pool went down, all the miners that were on it will just switch to the other pools, so the number of miners or the block payouts will not change.

But otherwise yeah, agreed.

People who don't think that bitcoin mining is not becoming more centrazilzed must be on something. The fact is since ASIC's can only be produced by companies then you will have most of the mining centralized, and a few of the scraps will be sold to the PUBLIC. Think about other countries like CHINA, Taiwan..etc major silicon valley players, they will further centralize the mining network.

IMO this largely a non-problem.

But if it were actually a problem - the solution would be an increase in block generation target time + block reward reduction... preferably automatically done by the protocol after some long time gap between blocks.

What would you rather have.. botnets of consumer zombie devices that control and threaten the network or hardware farms that control and threaten the network? 

I've heard all of these arguments before somewhere, oh ye it was back when CPU mining was being killed by the "evil" gpu miners who were only in it for the profit.

If VISA decides to shut everything down, doesn't the same happen to the credit card network?

Why isn't this a huge problem? VISA is making money hand over fist, and shutting down for no reason is irrational and would cause them to lose money.

Well, ASICMINER is in the same position.  It would be completely irrational for them to stop mining and throw money away.

My thoughts are that it is not a problem, in fact it is a benefit of bitcoin.  If VISA goes down, VISA cards stop working.  If ASICMINER stops mining, transactions take a little longer to process, but they do still get processed eventually.  This is a vast improvement.

for me the OP is a troll, nuf said

What a constructive remark - The key element of the post was "what are your thoughts on this".

I hear you man - but VISA have redundancy - multiple data centres - disaster recovery etc etc.

Look at this chart - http://www.asicminercharts.com/ these guys can not even maintain consistent throughput - there processing fluctuates by 50% which is massive.

The other issue is - if governments legislate against Bitcoin which is looking increasingly likely and mining has been centralised by a few companies - how easy is it for them to shut down a few companies as opposed to hundreds of thousands of miners?

Look at the Bit Torrent network - this has survived because there is no centralisation and there are no big companies that have a large stake holding of the network throughput - any company that did try like Napster was blown out of the water in no time at all. If bit torrent had been more centralised it would have been history a long time ago.

If ASICMiner gets to the point of having 50% of the total hashing power, and are then shut down by the government, the only thing that will happen is that for <2 weeks transactions will take 20 minutes to confirm instead of 10. Not that big of a deal, really.

What would happen in the event of the major mining pools being shut down as well?

If governments go for Bitcoins which as I said is increasingly likely for example the State of California issuing a cease and desist order against the foundation and numerous other operations - admittedly it was quite clumsy on their part as they obviously do not understand the technology - but it will not be long before they get their heads around it. When then they launch their assault it will not just be one operation they go for.

The point I am making is centralisation is going to be the downfall of bitcoins because it is easy to shut down a few big operations as opposed to hundreds of thousands of individual miners.

I find it hard to understand why people can not see this happening - each difficulty rise the smaller mining pools are loosing significant hashing power as people point their rigs at the large pools (btcguild etc etc.). A couple more increases and they will be dead - just further centralising the network.

Look at BTCMine.com that use to have a hash rate of around 300ghs now it is around 100 -120ghs - 15 days to solve a block. People will just not wait that long for a payout.

If there are no large mining pools people will just stop mining as they will not wait 6 months to solve a block solo.

I am all for Bitcoins and have spent significant sums of money but I am concerned that it is going to be futile if things carry on the way they are.

Imagine for one moment if you were in government and a significant part of the money supply is moving out of your control - what are you going to do - sit around and just let it happen? If you then had to stop the proliferation of Bitcoins you would target the big players and shut them down and we are making it all the easier for them.

  

I read the whole thread and I must say I am a bit worried that so few people could really address rovchris's points (like this one (https://bitcointalk.org/index.php?topic=238229.msg2523745#msg2523745) for example ) :-\ I may have expected some experts or bitcoin developers to comment here, but maybe they are too busy to read forums and develop at the same time... Some of you did not even bother to read the first post (like Rassah). That alone makes my trust in bitcoin go down :(

Also where are the p2pool fans? Can somebody just quickly summarize to me why p2pool did not take over normal pools thus solving this problem? My guess is that it is simply because of smaller profits for miners. Am I right? I tried using p2pool to mine LTC and it was almost unusable because of the transaction fees nullifying the profits. Not sure how it works with BTC though...

Either I am missing something or I was totally right with my previous post ??? You are not mining any cryptocurrency are you?

The same way it was a conspiracy theory for a large number of banks to collapse at the same time in 2008 and governments forcing tax payers to bail them out? Ask anyone in 2007 if that could have happened and they would have given the same response as what you just posted.

You do not understand how mining works - when everyone has ASIC's the difficulty will rise accordingly and therefore make no difference to the centralisation. When the difficulty is 500 million how are you going to mine solo with an ASIC?

Lol, how many miners were there when diff was 1? 1000?

I am not even sure what that means - what point are you trying to make?

It is hard work trying to have any sensible discussion - you are either called a troll or no one actually provides anything concrete and just repeats arguments that have no basis.

No one has provided any satisfactory answer to why the network is not going to be more centralised and how that is not a greater threat to the stability of Bitcoins than having a massively distributed network.

ASICMiner has ~ 1/4 of global hashing power it is simply not possible for them to double transaction times by shutting down.  Also how often (as a % of uptime) has ASICMiner shutdown (as in hashing power down to 0.0 MH/s)?

Actually if the network hashrate was cut in half there would be 20 minute blocks for up to 4 weeks, since it will take twice as long to get to the difficulty adjustment.

There are still plenty of miners around, if some of the big pools get shut down the miners will just switch pools, which is fairly easy, or just mine solo. There will be some people who keep mining at a loss to help move the network forward to the retargeting.

It does not have to go down to 0 MH/s - just look at the charts they publish - It looks like a mountain range which is not the sign of a stable infrastructure if anything the swings have increased in size and become more erratic. I guarantee they do not have a disaster recovery site which given their position is really quite astonishing.

There is not one central bank that controls 1/4 of the global money supply! Yet it is OK for one company to control 1/4 of the bitcoin money supply. What happens when another corporation controls another 1/4 or 1/3.

What guarantees are there that they will stop at 1/4 - their word? What is stopping them going to 45% or 65% - People will just argue when the time comes "it is safer that way" less chance of a 51% attack. A 51% attack is not the issue any longer there is a far bigger problem - the State.

Since I created this post the game has changed somewhat and Governments are now looking to interfere - California's cease and desist order against the Bitcoin Foundation - that is just the start. When they only have to shut down a few big operations then what will happen. The network would grind to halt overnight with the difficulty stuck at some astronomical level everyone would just give up. The time to mine 2016 blocks at 10th/s with the difficulty at a few hundred million would take years for the difficulty to readjust. Who is going to wait weeks for a transaction to be processed?

Actually if the network hashrate was cut in half there would be 20 minute blocks for up to 4 weeks, since it will take twice as long to get to the difficulty adjustment.

There are still plenty of miners around, if some of the big pools get shut down the miners will just switch pools, which is fairly easy, or just mine solo. There will be some people who keep mining at a loss to help move the network forward to the retargeting.
[/quote]

The issue is this - there will be no small pools because they will have all closed down as everyone has moved to the bigger ones. Who is going to keep running a mining pool with sufficient infrastructure to cope with the load if one of the bigger ones goes down and 99% of the time have no miners using it? They are not going to pay ongoing hosting costs if there is no revenue being generated.

I disagree about mining solo - Very few people will burn insane amounts of electricity for months on end with NO guarantee of solving a block - hence the reason mining pools came into existence. There may be a hardcore minority of around 10% that might but the rest will not.

The USB devices will NEVER pay for themselves let alone make any money. Use a mining calculator it will be show you this. Since the last difficulty adjustment the network hash rate has gone from around 140 to 180 ths - this represents a 25% increase in difficulty at the next change which mining calculators can not predict - they were working on an average 13% increase.

The bank bailouts did not just impact on the western world it had a global impact.

Well it does.  Your bogus claim was transaction times doubling.  That would require them to have 50% of network hashing power AND have that hashing power goes to 0.0 MH/s.  Anything less wouldn't be a doubling.  Actually with the network exceeding difficulty by about 10% it would require more like a 60% drop in network hashrate to double transactions.



How exactly would you have a disaster recovery site.  Build double the hashing capacity and leave half of it offline forever?  Yeah that will work.


What large operations would they shutdown?  Mining operations in foreign countries?  Mining pools (which would quickly be replaced by other mining pools)?

AsicMiner currently has ~35ths while the network is 200th,   You say half of this being down is causing problems ?

If AM goes down I'll have to wait 10.9 minutes per transaction instead of 10 ,,,  Big effing deal ! (BTW: I'm so unlucky I have to wait on average 40 min per block when it's an important transaction)

With 4-5 Company who'll be shipping ASICs do you really think this is going to be a problem in the long term ?

What's securing the network the most is not decentralization of mining, It's the greed provided by the block reward.
I wouldn't be to worried if AM temporarily had 60% of hashrate,  They would NOT double-spend,,, because $$$.

If 50BTC goes down, do you think miners will wait for it to come back ? Falling-back to solo or switching pools is near instantaneous.

You are really tipping the FUD scale with your last prose.   With the kncminers you get 400 Gh at 1000W.  at .15 kWh that is $3.60 a day.  How is that insane costs?

And I am not expert on mining pools, but if a mining pools is mostly created by people joining it and not some datacenter then there isn't a lot of costs to organize a pool either.  It isn't like there is tons of data usage

On the other side of the coin, other countries have different ROI than an American.  Some countries with pisspoor currency that get electricity at a decent rate for their locality make a huge gain on the conversion to $$.  So that is one of the many many reasons that btc is going through its trial by fire for price discovery now.

Have a little more faith, or just jump ship.  I will take my chances buying up all the clearance sale ASIC miners and cheap btc and see what happens in the next year or two.  

Getting involved using btc in commerce will always help.  

BTC has many facets... so it is not really a one topic conversation.  There has never been anything like btc so we'll see how this distruptive tech will pan out

You guys talk like these are actual real products that you can buy next day. They are far from it.

Try and buy an AVALON 60ghs miner - you can not as they have stopped manufacture and only sell chips which then leaves you to manufacture your own circuit board.

Try and get anything from BFL delivered before the year 2015

KNCMiner do not have anything that even works and no guaranteed delivery date - they have just said these are the specs.  What happens if they do a BFL and find out they actually use three or four times the power they stated and deliver a year late? The difficulty will be so high then you a 400ghs miner could well be redundant.

Mining pools require servers to log,  validate and calculate the payouts of the shares submitted by the miners - The amount of bandwidth is not the issue it is the databases, web severs, application servers that require data centre space if you want any kind of reliability.

I do not live in America and electricity is becoming more expensive every day due to green taxation and other factors. 1000w is a large amount of electricity and I can guarantee that they will have to revise that figure when it gets closer to them delivering a product. So far every ASIC manufacturer has overstated and under delivered.

The other part, since I did say there are way too many parts to talk about, is that if you can't mine for whatever reason, then focus on selling things/services in btc to the miners.

A large part of the FUD community only see things as 'I can't mine for easy btc' instead of the other heavy lifting.

And before you say it is too risy to sell things in btc because of the price swings. well that means you dont have faith and are a dumper at heart.  And the miners have to have faith too right? if btc dies then asicminer dies too

Well from reading information on your website that you were the CEO of

https://fastcash4bitcoins.com/index.aspx

Your business was closed down by the "The Virginia Corporation Commission" so there is one to add to your list.



What kind of response is that? When you are generating 3600 bitcoins a day and have a 1/4 of the entire Global network you have a responsibility to maintain it. I do not see why you do not understand this.

This is exactly what existing financial institutions do and respectable businesses.


The USA Government is not the only one that would act against bitcoins any government will when they realise they are loosing control of the money supply - Do you think they are just going to say oh well it was good while it lasted?

Ok then please explain to me in simple terms what the difference is between Central Banks having a monopoly on creating money and a few large corporations / companies controlling the Bitcoin money supply?

Read some of the stuff Satoshi has said about why he created Bitcoins in the first place.

It is not about easy money for miners it was about redressing the balance and removing the levers of money creation away from government and banks and everyone here is happy to just hand it straight over to corporations. Meet the new boss same as the old boss.

you are a bit scatter on logic so it is tough to pull back your targets and then show you why you are missing.

Central Banks create fiat with nothing backing it to prevent inflation on their whim. Then they adjust interest rates and also have a huge hand in velocity. That is nothing like you are comparing to someone who goes and mines most of the gold out of a finite amount

You then jump to the transaction times..  I see values all over the place with people rejecting your math about asicminer going offline. 
 

Rovchris, please stop being a whiny bitch. Pools are not central mining powerhouses. If one goes does, all miners will switch to another one. If the second and third go down, they will solo mine. This is typically set by default in mining software. There are plenty of smaller pools that aren't going anywhere, that will become large pools should the larger ones are taken down. For example, Eligius used to be a really big pool, but people quit it for personal reasons. Other small pools became big instead. Worst case scenario, there's always P2Pool. You can't take that down.
Also, if you have to ask what is the difference between a central bank money creating monopoly, and a centralized mining operation, then you really don't understand an enormously important aspect of Bitcoin. It has to do with clients, not miners.

You obviously have never mined a bitcoin in your life.

OK Rassah what is the total number of bitcoin mining pools?

Well here is a list of the top 20 pools

1   BTC Guild   424 (21.03%)
2    ASICMiner   366 (18.15%)
3   50 BTC   324 (16.07%)
4   slush - mining.bitcoin.cz   230 (11.41%)
5   Eligius   73 (3.62%)
5   Bitminter   73 (3.62%)
7   Eclipse Mining pool   71 (3.52%)
8    Discus Fish   54 (2.68%)
9   ozcoin   36 (1.79%)
10   Horrible Horrendous Terrible Tremendous Mining Pool   31 (1.54%)
11   Deepbit   21 (1.04%)
12   Bitparking Merged Mining Pool   19 (0.94%)
12    ST Mining Corp   19 (0.94%)
14   Polmine   15 (0.74%)
15   p2pool   8 (0.40%)
16   btcmp.com   5 (0.25%)
17   Ecki   3 (0.15%)
17   Triplemining   3 (0.15%)
19   MaxBTC   2 (0.10%)
20   BTCmine.com   1 (0.05%)

http://blockorigin.pfoe.be/top.php

Please note to get into this list you only have to solve 1 block that is how few bitcoin mining pools are left.

So where are all these other pools that you keep talking about?

BTCMine.com has now dropped to 90gh/s when these pools are no longer solving blocks they will close down - do you UNDERSTAND this.


You did not state what the difference is because you can not is why. All the clients do is relay transactions - they do not process transactions or generate coins so you do not understand a massive aspect of Bitcoins - The miners are the most important aspect of bitcoins.

The issue with p2ppool is ASIC miners will not work on them

https://bitcointalk.org/index.php?topic=90658.0

There are multiple issues that need to be discussed.

There is nothing backing FIAT accept peoples faith in it - exactly the same as Bitcoins - they are backed by nothing but peoples faith.

The upper limit of bitcoins can be changed. https://bitcointalk.org/index.php?topic=153330.0

The point I am making is there are some issues with Bitcoin that need to be discussed.

When you are mining there is this thing called "work time" which tells you how long since the last block was solved on the Network - if you actually mined you would know that is easy to identify when ASICminer is having issues as you would see this value increase dramatically.

There is nothing wrong with the maths - if you actually read my post it said -


ASICMiner and another big mining pool is the key thing here so the real problem is people just do not read the posts

Maybe you should educate yourself first - read what people say who actually mine bitcoins

https://bitcointalk.org/index.php?topic=245772.0

And you will see the conclusive answer is no.

If you don't count my mining from May 2011 to June 2013, then yes, I never mined.


Thank you for sort of proving my point that pools come and go, and their power changes with the miner's changing whims. Deepbit, Eclipse, and Eligius used to be really big pools. 50BTC didn't even exist until somewhat recently, and many other pools there are very new, too. Miners control hashing power, not pools, and if the top 15 on that list are taken down, or do something scammy, the bottom 5, or any new ones, will take their place as the top mining pools. And by the way, since pools go down all the time, it's customary for miners to set their mining software to switch to other pools, or solo-mine, when they lose a connection to a pool. So, if some pool is taken down suddenly, Bitcoin users probably won't even notice a change in confirmation times.


I do, you don't. Pools START by not solving any blocks, and trying to entice miners to join them. It costs almost nothing to run a pool, until you get a lot of connections and mining power pointed at you, so these pools could run indefinitely, waiting for miners to join.


Totally wrong, so I'll explain it to you. The clients/nodes do the work of verifying transactions to make sure they are following all the rules. Clients make sure that coins that were recorded in the blockchain are not double-spent, that coins are legit and not created out of thin air, that coins are following correct difficulty requirements, and that there are no more than 21M coins. If a transaction is sent that breaks any of those rules, it is the clients that reject it and stop it from propagating on the network before miners even hear about it. Miners just verify the transactions same as clients, and store it in a safe database. So if miners change some fundamental rule, such as mining strange transactions, or trying to increase the coin limit, their blocks will be rejected by all the clients, and their mined coins will be useless.


Check the date. That's an article from a year ago. P2Pool has been patched and upgraded many times since then, now supports Stratum, and can be used with Avalon and BFL (though Avalon is still buggy).

And as was pointed out, there is a large variation in the "time to solve", but perhaps if the 2 weeks to adjust were modified to something akin to a Kalman filter, see
http://en.wikipedia.org/wiki/Kalman_filter
one might be able to shorten the "time to change the difficulty" to a very short window?

I see times to solve of one minute or less to over 30 minutes regularly, just watching
http://blockchain.info/

I don't know what the average is but I would imagine that the code might be able to "Kalman filter" the difficulty "on the fly", i.e. every block if the block was solved in less than 10 minutes, and at the 10 minuute mark if no solution arrives. One would hope that the mean time to solution wouldn't "hunt" or wildly oscillate, but would damp down quickly.

This would then be able to correct for large swing in network hashing power very quickly.

The only issue, other than actually writing and testing the code, would be how to synchronise all the bitcoinds and bitcoinqts that will calculate a new difficulty on their bitcoin clocks and the last blocks time. I don't know what happens now at the two week magic moment, or is it a block count number? Changing the difficulty "mid block" would seem to be similar to a new best block kind of signal to those who are mining. If a miner solves first at a higher difficulty than the "corrected" difficulty, so what? It's still valid, it would seem to me.

Just idle thoughts from a old coder that would like to see BTC's ranks swell by making the windows version (bitcoin-qt.exe) more palatable to the masses, that are not geeks. I would like bitcoin-qt to be everything it still is, but look more like http://blockchain.info/, i.e. show the liveliness  of the BTC network. It doesn't have to be musical, though it could be, like http://www.listentobitcoin.com/ :)

I sometimes run a modified version of bitcoind in -printtoconsole mode, where the printf()s are "corrected" to a DOS <=80 character length, or other tricks with \r & \n. It is interesting to watch bitcoind side by side with http://blockchain.info/ and see them both showing the transactions as they are coming in, and the new blocks.

Now if I could capture that and display it in bitcoin-qt...?

I'm the one who offered the splash screen change to try and keep it on "top" and animate it a little during the long VerifyDB() time, and the move the wallet.dat file anywhere change.

Ron

I had to google Kalman filter as I had no idea what it was - it made for some interesting reading even though it is some pretty hardcore mathematics!

What applications were you writing that you are even aware of it, I would be quite interested to know.

The change at the moment is simply done on the block count every 2016 blocks I believe.

I also totally agree about bitcoin-qt more friendly for the masses - have you looked into the "signing" of messages yet? There is absolutely no way the man on the street is ever going to get their head around that - it is far to "geek" to be completely honest.

It makes a pleasant change to actually have some interesting ideas posted that can address some of the issues.

One could adjust the difficulty every block without any complex mathematics or issues with synchronizing times. Now mining is random we only know the time of the average block which is 10 minutes however each individual blocks time to a solution will fall into a bell curved (visualize a bell curve with peak at 10 minutes and a standard deviation of 10 minutes).   If you simply looked at the last block the difficulty adjustment would just be tracking the normal random walk of bitcoin solution times.  Bitcoin "solves" that by looking at a 2016 block window and adjusting it every 2016 blocks.  However it isn't required that the adjustment interval and the averaging interval be the same.

For example a CC could look at time for last 2016 blocks to get the average time per block (and thus the necessary change in difficulty) but do that every block.

For example:
for block 2017 the difficulty is computed by looking at the time interval from block 1 to block 2016
for block 2018 the difficulty is computed by looking at the time interval from block 2 to block 2017
for block 2019 the difficulty is computed by looking at the time interval from block 2 to block 2018
...

Please stop spreading this lie.  The issue with p2pool is people who might try it are actively discouraged by uninformed people like you. ASICMINER hw works, BFL hw works, and soon Avalon hw will work.

https://bitcointalk.org/index.php?topic=153232.0:

Additionally, with the upcoming hardfork (code released, waiting on 95% of hashpower to upgrade), p2pool should work reasonably well for all ASICs (including Avalon), and optimally for most.  Even without the hardfork, I'm mining away with 61 AM USBs with 111% efficiency.

Agreed. The Tragedy of Commons - one of the thorns of the free market.

The issue is when you search to see if they work the first results say they don't - What percentage of people are going to keep looking? If they already mining at 100% on an existing pool why are they going to take the risk?

Nobody is going to read through 300 pages of posts - only people that have been closely following that thread will.

After having a look through it is not clear what is going on with the BFL devices. When the guy who wrote cgminer is saying there is a problem what conclusion do you expect people to come to. It looks like the 5ghs devices work but not the bigger units.

To quote ckolivas the author of cgminer


Avalon's as you say also have a problem

So at the moment it is only the USB miners and the BFL low ghs units that appear to work. So in essence no big miners are going to use it.

I also don't understand why so many people on this forum immediately attack each other - anyone that is not involved in Bitcoins is going to be reluctant to join or even post due to all the demeaning comments that are fired at you when you misunderstand something - which would will be the majority of new users.

You guys need to be more patient and just explain why something may be incorrect.

Reading more about the p2pool I have to say it does appear to be a very good solution to decentralisation.

https://en.bitcoin.it/wiki/P2Pool

The issue is - it is far more complex than mining at a traditional pool.

Network latency plays a big part in how efficiently you mine which is not such an issue for normal mining pools.

You need to install the p2pool node software either on your miner or on a dedicated machine.

Bitcoin-qt / bitcoind has to be installed and the full block chain downloaded. This then needs to be monitored to make sure it is up and running as if your were solo mining.

The share difficulty is much higher therefore there is a greater variance in your earnings which is one of the reasons miners go to pools that use the pay per share payment model.


The above quote is immediately going to discourage people.

After reading through that wiki page I can say that a huge number of people are going to have trouble understanding it and wonder why it is worth the effort.

Only dedicated people that understand the importance of decentralisation and have a good understanding of diagnosing network problems will take it on but this is very small percentage of miners.

It has to be looked at from the layman's perspective - it is far simpler to use a traditional mining pool and does not require any real technical expertise or understanding and you are far less likely to have an issue with stale shares, payment variance, mining efficiency, setting up long polls and the other issues that go with it.

When you see questions being posted asking what host do they need for their ASIC miner - you know at that point they are looking for the easiest possible way to generate bitcoins and are not interested in the ethos of the coin. They want to run them from a host that uses as little power as possible to maximise their profit. If you told them they have to run a PC to host the bitcoin-qt and the p2pool software the first thought will be why bother when I can use a mining pool and not have to do any of that. Have a look through the BFL forum and you will see where I am coming from.

For the p2pool to really succeed it needs to be as easy to use as the traditional mining pools otherwise people will not make the effort to switch.

After having a look at this chart http://p2pool.info/ there was an increase in the number of users from April to the middle of May but from there it has been in a steady decline even though the hash rate has increased. This is indicative of a hardcore group of users that have just been increasing their hash rate and not a growth in the user base or popularity.

I would like something explained - what is stopping you submitting the same share to the p2pnode and your bitcoin-qt client at the same time? (I am assuming that it is actually your bictoin-qt client that is providing the getwork response to the p2pnode sofware that then forwards it to your miner).You can easily write a proxy point your miner at that and this just duplicates and submits the same share to two different address simultaneously. If it was of valid difficulty the chances are the bitcoin-qt client would receive it first as a direct submission than through the p2pnode and then to the bitcoin-qt client. This does not work with mining pools because of the Merkle tree being different for 2 different bitcoin-qt servers and the share is immediately rejected.

For the Layman:
http://p2pool.hostv.pl/

Pick one, point your miner at it, done.

Shares always have to payout to the current payout list to be valid on p2pool.  The software does send it to bitcoind if it is a valid block to make sure it is broadcast as soon as possible.  There is no way to change the way the payout is done.  If you change that, you have to start the proof of work all over again.

As for high variance, pooling hashpower to a single p2pool address is possible.  In fact, I ran such a pool for a couple of weeks.  Instead of needing to find a block on its own, my pool paid out whenever p2pool found a block.  I may revive it at some point, but there was almost no demand when I tried it.


Because people who don't know what they are talking about keep repeating it.  Soon the hardfork will take place, and p2pool will be compatible with all ASICs.  Now is the time to break this meme.


Maybe it is because people talk with confidence about things they don't full understand.  This leaves the uneducated with false belief, which they continue to repeat.  When you hear the same lie repeated 50 times because everybody takes hearsay as fact, it gets annoying.

I don't see how that is any different to using a mining pool?

I thought the point of the p2pool is that every miner runs a p2p node?

Because every one of those nodes connects you to the same pool.  You can't have it both ways.  Either you use someone else's node, or you get your hands dirty and run your own.

I could understand your point if it was a comment by a random user but when it was a BFL Engineer what else can you be expected to think - They can not be classed as not knowing what they are talking about.


So to clarify when using P2pool it is your local bitcoind that is issuing the response to the getwork request that is then relayed through the p2p node and then to your miner?

The point I am trying to make here is this - If for example you are mining against a traditional PPS pool and you have written a proxy that sits between your miner and the pool. This proxy checks the difficulty of the solved block before forwarding it to the pool. If the proxy receives a solved block that meets the difficulty it then forwards it to your local bitcoind. The local bitcoind will reject this solved block because the Merkle tree is different for the two bitcoind servers preventing you from "stealing" the block.

What I am trying to understand here is when using p2pool if your local bitcoind is issuing the getwork then using the proxy to intercept a solved share of required difficulty from your miner and sending that straight to the local bitcoind and not back to the p2pnode why would it not be accepted and the wallet be credited with bitcoins and the p2pnode would be none the wiser. So effectively you would be getting paid for shares and then take the full reward for yourself?

Cool story bro.  I've debated this to death in other threads and the fact is people with BFL hardware have been able to make it work by tweaking a few things.

Edit: removed quotes since you fucked them up

I don't understand why you are taking issue with me over this? -  I read a post by a BFL engineer that said they would have a problem with P2pool and somehow I am suppose to know that is not the case.

Generally when a manufacturer says something about their own products which would be detrimental to selling them why would you not believe them and consider it fact, a BFL engineer has far more authority on this matter than anyone else.

He may have been incorrect though so why do they not remove or update that post? Other people will see it and assume it to be the case as well and they are far more likely to listen to someone that works for the BFL than random people saying it does work.

Why you feel the need to be condescending about it I am unsure.

BFL has no interest in getting to work.  If it isn't plug in play, they will say "no it won't work" and then get back to something that makes them money.

People who do have an interest in getting it to work have been able to do so.  Why you feel like beating a dead horse I am unsure.  I have seen every post you have tried to offer as "proof".  Sorry, but you are wrong.  No please quit telling people incorrect things, or at least HINT that you might not know instead of saying things like this:

I see you conveniently edited out the link that was there pointing to a thread discussing the issue. Showing that it was not my assumption but based on information posted in this forum.

I conveniently edited out everything except the once sentence I was referring to.

Your assumption was that you took information posted on the forum as fact without verifying it.  Learn 2 Internet.  Forums are not a valid reference.

Yet you expect people to take your word that BFL products work properly on p2pool which is none other than posted on a forum. What gives you more authority than the manufacturer who stated that there is a problem.

The Kalman filter was used in a fortran program, compiled to run on a 1Mhz 16 bit minicomputer, with 4K of rom, that was the first collision avoidance computer that lived on oil tankers, about 1977. It (the filter) was used in the satellite navigation autopilot s/w that plotted the course and steered the ship. Not well I might add. ;D I just installed and serviced them.

Ron

But isn't that, then, just a moving average, all weighted the same. So an instant drop in hashing power, which is the question I think, would only affect the average slightly. If the latest, perhaps few, had more weight in the moving average, the "response" would be faster, I should think? This, in some analogous sense, is what a Kalman filter does.

I am looking at GetNextWorkRequired() in main.cpp and without comments, I will have to study it for some time to figure out how it is setting the difficulty, but it seems to be just the difference in time of the last 2016 blocks against the two week norm, limited to 1/4 if less and 4 times if more, with equal weighting of all blocks.

I like the idea of adjusting the difficulty more often than ~two weeks, though, as a start.

Ron

Interesting thread. Not meaning to go OT, but in the context of solving these issues (or at least having a more refined alternative), what is everyone's opinion on Proof of Stake (as implemented in PPCoin, namely), as well as PPCoin's mint-rate adjustment algorithm as compared to Bitcoin (i.e. where PPC relies on difficulty, not time/block height)?

Seems like PPC would have a lot to gain on both fronts if this difficulty/centralization scenario plays out. It's looking like (at least to me) that Bitcoin POW energy efficiency will progressively become more and more of an issue. On one end you have the move to ASICs (and more efficient ASICs) which have reduced energy demands over GPUs and CPUs at a per-watt level, but on the other, if you are POW-only, like Bitcoin, the only real direction you can move in for increased network security is more hashrate. That hashrate will only stick around if there is profit to be made, either through minting operations (relying on this ASIC armsrace) or transaction fees (which may scare away users in the face of other viable cryptocurrencies).

I have noticed this POW centralization effect lately and it is a bit concerning to me. With PPC, given that it's still SHA256, I don't see how it would become less decentralized from a POW perspective than BTC, but at least your network security wouldn't depend 100% on POW hashpower.

No, I expect people to not make claims they can't back up with actual experience.  Your claim is patently false and I can prove it because I AM RUNNING ASICs ON P2POOL, AND SO ARE OTHERS.  I don't ask you or anyone else to believe me or the other posters.  I am merely asking you to stop making claims based on rumors because I happen to know are not true.  But, you'd rather be thick headed and point at quotes from a company who has been 2 weeks from shipping for over a year and who's engineers dramatically underestimated critical requirements, such as power usage.  Sorry, but I'll take my personal experience over BFL's "engineers" any day.  Again, I don't ask you to do the same.  I'm just asking that you stop spreading rumors you have not verified.

that is such a reach..  btc with all its popularity is still a long way from having daily users and you assume that these few adopters would rather go to other coins because of some tiny transaction fees that are still way lower than any fiat, credit, etc systems?

You are just looking at it from a miner side with no real care about 'users'...  classic pump and dumper

lol at 'other viable cryptocurrencies'..  that is a looong way away and only if btc paves the road

BTC is poised to pave the road but we should just hope that entities such as the US gov don't intervene and drive it underground :(

if they can stop btc then it aint the US gov..  it is then the NWO

P2Pool has gone from 30 hours/block to 23.2 hours/block since I started actively attempting to dispel the myth that p2pool doesn't work for any ASICs (no rovchris, I'm not just picking on you).  I'm not going to say I am responsible for any of that, but that kind of gain can only be explained by ASICs.  Clearly the situation is more complex than "p2pool doesn't work with ASICs".  Instead of shutting down the solution, you should ask yourself why you are looking for a problem.  P2Pool works for many ASICs, and is being actively improved so it will hopefully work well for the higher latency hardware.  If we don't quite capture the entire hardware market with this update progress will continue.  The problem is well understood and will be solved.  You can continue to look for other solutions to pool centralization, and I encourage p2pool competition.  However, I don't appreciate it when people needlessly lock potential doors for others.  If you want to say p2pool is hard to set up, fine.  If you want to say p2pool requires more robust hardware, fine.  But please refrain from slowing the growth of p2pool by spreading rumors.  I hope this makes my position clear.  I do not suggest anyone use p2pool with certain ASICs if you want a plug and play solution.  Many will require a bit of fiddling.  However, if you can set up p2pool, you can probably figure out the tweaks you need with a little bit of searching.  P2Pool will take some time to grow and to be refined but it will soon cover most if not all ASICs.

You see man that was a good well balanced response these are the kind of posts that I was looking for.

Thank you.

If p2pool node software was integrated into the Bitcoin-qt client so it is only one download and as simple as installing the normal client and a simple set up procedure i.e. you only have to enter a username and password - it would make a massive difference to the take up. Also a new tab that displayed all the stats that you have to request through your web browser as well.

Similar to how the original client had the option to "Mine".

At the moment it is too disjointed and is only going to appeal to people that are technically competent.

That would be my suggestion to help build the user base quickly.

The statement is meaningless. Currently, litecoin ASIC does not exist for the time being because of costly memory.  Currently, GPU is a form of ASIC.

The problem is that most of us in this community that are technically competent don't use Windows and very few of us know how to develop for it.  If someone reading this does have such skills, a single install p2pool GUI integrated with a wallet for windows would be awesome.

For those who may be interested, p2pool just hardforked to settings that should work much better for ASICs that previously had issues.  If you are an adventurous Avalon, AM Blade, or BFL Single owner, I encourage you to give it a shot.  If you are more conservative about potentially losing a couple percent for day or aren't comfortable tweaking config files, you may want to wait for reports and guides to be developed.  If you do try it, please try it for at least a day.  After 24 hours, if your efficiency is 100% or better you will earn as much or more than a 0 fee pool that pays out transaction fees.  There are also guides for merged mining other coins if you are interested.

And 1 year on from the original post the network has become more centralised.

http://www.cryptocoinsnews.com/news/bitcoin-mining-pool-ghash-io-ddos-ed-response-51-attack/2014/06/15

Not really. A year ago we had about as many major pools as today, and we've had these approaching-51% issues then too (It was BTCJam at the time). And the year before (I think slush came really close).