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The problem with fixed reward is that you don't know whether you are actually rewarding the miners properly. What kind of politics will determine what the right amount of block reward would be? Do we even want such politics in Bitcoin? I don't.
When you have transaction fees only, it is purely the market who decides how much miners earn. I think that is the right way to go.
I quote myself here. It's funny, I said the problem with fixed rewards is that it induces politics... and look what happened after my thread: A lengthy political discussion.  |
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The problem with fixed reward is that you don't know whether you are actually rewarding the miners properly. What kind of politics will determine what the right amount of block reward would be? Do we even want such politics in Bitcoin? I don't.
When you have transaction fees only, it is purely the market who decides how much miners earn. I think that is the right way to go.
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Of course this assumes a very high Bitcoin price.
Technically speaking since mining is always competitive and hashrate (difficulty) changes after each price change (goes up with price rise) the profit shouldn't really change when price goes up and things balance out again. Not so fast. It is true that hash rate rises with the price, but there will come the day where there will be no more easy accessible energy anymore. At that point in time, mining in the deserts will actually be the cheapest way for large scale mining(I am talking about hundreds of Giga Watts). So if the price of Bitcoin rises further, new mining competitors will produce their electricity in the same way as existing ones, meaning profit margin will stay just high enough for maintaining a mining facility like this. Within the desert, I can cool the water for free during the night, because in the deserts it usually gets very cold during night time. During the night, I will run a Sterling engine run by hot water and cool air generating electricity and, as a byproduct will cool the water.
But if the water is used for cooling during the ~12 hours of day it has to be constantly cooled because after a short time at the beginning of the day its temperature will increase and you have to wait until nightfall to cool it again or spend additional money for its cooling. Imagine in the morning you have 1m 3 of water at 20°C. Now you run your miners and cool them with the water. In that process the temperature gets 80°C. If it reaches that temperature, you store it in a large tank. During the night, I will cool that water with an air to water heat exchanger (Or a Sterling Engine) such that in the next morning it will have a temperature of 20°C again. If during the night I produce additional hot water, I will cool that with additional heat exchanger capacitiy during the night. |
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Cooling is solved. You place desalination facilities in the coast region, then you build pipelines into the deserts. Because not only do you need cooling, you also need water for all the inhabitants of those new mining oasis. And you need to clean the panels.
What about sandstorms? A single sandstorm could burry the whole mining facility. And they become more and more frequent. You build the solar panels elevated, like 4 meters or more. This allows for farming below the panels in the half shade. If indeed you the level of sand rises, you would have to remove it. |
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Cooling is solved. You place desalination facilities in the coast region, then you build pipelines into the deserts. Because not only do you need cooling, you also need water for all the inhabitants of those new mining oasis. And you need to clean the panels.
Wouldn't that add a huge cost on top of everything else? You would have to transfer the water all the way to the desert just for a mining facility. Not to mention that you still have to reduce the water temperature in order to actually cool the equipment in hot environments, this requires additional energy that could negate all the befits of mining in the desert. Yes, it will add to cost but that doesn't mean it can't be profitable. Of course this assumes a very high Bitcoin price. In the mean time you can build facilities near the coast, so you may even cool directly with sea water via a heat exchanger of course. Within the desert, I can cool the water for free during the night, because in the deserts it usually gets very cold during night time. During the night, I will run a Sterling engine run by hot water and cool air generating electricity and, as a byproduct will cool the water. |
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Soon we will witness miners building large solar plants in the deserts powering their mining plants. Luckily, deserts are all over the globe.
That doesn't seem realistic because mining bitcoin is not just about providing the electricity, it also has another very important part which is cooling. ASICs produce a lot of heat and they run all day, so it will quickly become a nightmare to coll all that equipment in the middle of the desert with its natural high temperature. P.S. I should mention that I've seen at least one person claiming to have done this successfully but never provided proof. So I remain skeptical. Cooling is solved. You place desalination facilities in the coast region, then you build pipelines into the deserts. Because not only do you need cooling, you also need water for all the inhabitants of those new mining oasis. And you need to clean the panels. |
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Thanks for your discussion.
Here are my three take-aways on why PoS is inferior to PoW:
1. PoS requires no decentralized, scarce real world ressource for mining. This means that there is no inherent incentive for the network topology to decentralize itself. This is in stark contrast to PoW where new miners need to find new geografic locations in order to tap new energy sources.
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I disagree with this point. PoW gives miners incentives to gravitate towards locations that have cheap electricity. This is something that we have in fact seen by way of certain areas of the world have concentrated amounts of mining by various entities, while other parts of the world, even if the same country, have little mining activity. I think you are mistaken. Because even though there might be hot spots of cheap energy that attract alot of miners, guess what happens next... that energy becomes more expensive. Now you have again the situation where new miners have to divert in geografic location. And by the way, do you know where there is cheap sustainable energy in most abundance? Exactly, it is the deserts. Soon we will witness miners building large solar plants in the deserts powering their mining plants. Luckily, deserts are all over the globe. |
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Thanks for your discussion.
Here are my three take-aways on why PoS is inferior to PoW:
1. PoS requires no decentralized, scarce real world ressource for mining. This means that there is no inherent incentive for the network topology to decentralize itself. This is in stark contrast to PoW where new miners need to find new geografic locations in order to tap new energy sources.
2. In PoS, voting power distribution is volatile and uncertain, since voting power is tied to virtual tokens which can be transfered almost intantly an with very little cost. Again, this is in stark contrast to Bitcoin where it is extremely costly and difficult to relocate a mining facility. This means that in Bitcoin the network topology is much more stable.
3.In PoS, because there is virtually no cost to mine, existing miners will have extremly high profit margin, increasing their staking power even further. This is a positive feedback loop which escalates the power of those who already have alot thereof. In Bitcoin, it requires big capital investment, knowledge and communal support to run a mining facility. This means that not necessarily the richest miners will be successfull, but the best (i.e. most efficient, most skilled, most innovativ etc.).
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Yes but this was in the early days.
I am assuming a mature system here like a system with a market cap of a trillion. It is not likely that one entity would control half of that, right?
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The difference is that with PoS, it is possible for a single entity to control a large percentage of the total supply of tokens, which would give them a lot of voting power. Which is much easier, compared to having control over all the hashing power(or even 50%). Given where we are now, it would require laaaaaarge amount of hardware. it can still be prevented tho(gaming the system in pos), like Ethereum is using Casper FFG Read this: https://medium.com/unitychain/intro-to-casper-ffg-9ed944d98b2dHave fun Yeah but who is to say that it is easy for a single entity to gain control over a large amount of tokens? I don't quite see that. I actually dont think it is realistic for a single entity to control more than 50% of the currency supply in a large network. We even don't have that in the Fiat world.
If it would be only one drawback. There are lots of them, see this long topic: https://bitcointalk.org/index.php?topic=5387588But to list at least a few of them: 1) Staking require no work at all, you can sign any message you want, so by reaching 51% of the coin supply, you have full control over the coin, forever. In case of Proof of Work, after reaching 51%, you have to keep all miners running, and you start to compete with yourself, so you can gain more by turning off some miners (to reduce your electricity bills). Is it realistic that a single entity reaches control over 51% of the coins? I find that somewhat hard to believe. And then once it reaches 51% it would then use that power to DoS other stakers or would it even double spend? I don't think that would be very wise because it would instatnly destroy the value of the coins, right?2) To stake coins, you need to keep your private keys around, you cannot stake without them. In Proof of Work, you can mine on someone else's behalf, and you can also just mine on your address, without keeping your private key on your mining machine. Yeah this one I see. It makes your privKey more vulnerable, for sophisticated people maybe not a big deal though. That shouldn't be a show stopper either I guess. 3) Proof of Work clearly separate miners (those who own equipment) from whales (those who have coins). In Proof of Stake, whales control the network. That means, in Proof of Stake, the whole network can be ruled by some exchange, just because it is popular, and users deposited a lot of coins there. That actually is the same as in 1). Is it really realistic that an exchange would control like 51% of tokens? I am assuming a fully mature system here. So how do you reply to my challanges?
In this case I would expect that with a decent amount of miners, a PoS network should still be very decentralized, because it would be very unlikely that coincidentally all miners were geografically colocated. First of all note that there is no miner in a POS cryptocurrency. Instead, people need to stake their coins. In a POS cryptocurrency, people with more coins can have more power and since a significant percentage of the coins are usually owned by a few number of people, they can have full control over the network and make the coin centralized. Well but if that number is still relatively large, let's say ten thousand then it is all good correct? I mean in Bitcoin it is also the rich people who control more hashing power. |
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is it worth mining bitcoin with a Gaming laptop which consist Rtx 2070 8gb card??
Yes, but only if you have electricity for free let's say because you produce it with your own solar panel and you can't use the electricity for anything else at that moment and you don't feed back into the grid. Or if you heat your room with an electrical heater, as you can use any miner as electrical heater regardless of efficiency. |
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I am a proof of work believer, because it garanties decentralization on the hardware level (layer 1).
This is not inherently the case in PoS because its consensus algorithm is not dependant on any scarce real world ressource, provided it does not require a huge amount of memory to run a full node.
In this case I would expect that with a decent amount of miners, a PoS network should still be very decentralized, because it would be very unlikely that coincidentally all miners were geografically colocated.
This assumes that the protocol would not support delegated PoS because there it is obvious that it is more centralized.
So what then is the drawback of PoS or is there something that I miss?
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However, when I think about it I am starting to get doubts.
Because in case of a deep reorg, like what would happen in segmentation you will have the same problem because coinbase transactions will become invalidated and all coins that derive from them.
I know there is a 200 block spending blockade for coinbase transaction for that reason. But that means you could apply the same logic for OP_BLOCKNUMBER.
So it would actually be possible to do it.
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Thank you for this very interesting and insightfull answer!  |
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It can be only possible if you do it manually if the transaction is still unconfirmed on doing double spent to cancel the transaction but the expiration you talking about seems it's not possible.
Yeah but I don't want to double spend it, I want to stop it from being included in a block. What I needed is that I can specify a block height in the transaction after which it would not be valid anymore for insertion in the chain. Bitcoin should implement this. Altough this would be a hard fork right? |
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In my opinion there is only one way to stop the war in Ukrain immediately and effectively.
Ukraine should surrender to the Russians, but demand from the West that they pledge for sanctions agains Russia until they release Ukraine into freedom.
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I want to make a bitcoin transaction, but if it does not make it into the blockchain before a certain blockheight, I want the transaction to expire so that it can no longer be inserted into the blockchain. Is this possible?
As a layer 2 developer of Bitcoin I deem this capability very important and useful.
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ok so let's assume there is a long valid fork that is stronger than mainchain. This might happen if a split network rejoins. How would the reorganization of the UTXO take place? Please describe the process.
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In the Bitcoin Core source code https://github.com/bitcoin/bitcoin/blob/21ee676dd6a7d9704367b6412bf8e1e443ec2b5b/src/chainparams.cpp#L139 I see that the latest checkpoint is at height 295000. If I understand correctly, this means that today a miner could produce a block with height 295001. Although this block would not go into the main chain of course it still has to be validated by all nodes, and if valid, it would go into the secondary chain pool. My question is, how is this block validated, since it is not known anymore what the state of the UTXO set was at height 295000. My guess is that in order to validate, the node has to temporarily reorganize the UTXO set to height 295000, check if block 295001 is valid, if yes store it, otherwise reject it, and then restore the current state of the UTXO. Looks like a lot of work. Is that the way it works? |
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As I understand, hashgraph does a virtual vote on nodes. So an attacker might set up millions of nodes to outvote the honest ones.
How does hashgraph prevent that?
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