Ordinals and other non-monetary "use cases" as miner reward on 2140+

[d5000]

The security of the Bitcoin is in hands of the few companies, if profitability drops or they find something more profitable to mine then Bitcoin network will be doomed.

I disagree with this logic.

First, if "they" (I guess you mean the big mining companies like Riot, ViaBTC etc.?) find something more profitable, then difficulty will go down, and it will become easier for smaller players to enter mining again. Decentralization in this case will probably grow, although more slowly than in the past due to higher entry barriers.

Second, this will be a gradual process. While halvings are unique events, the consequences are different for each miner, depending on its exact business model (e.g. if it relies more on cheap electricity or on other scale effect, on speculation [HODLing] or not, etc.). So the most likely scenario is that if some big miner retires from the business or goes bankrupt this would be first good for the other mining companies as the difficulty pressure will be lower (hashrate will probably grow more slowly), and will help them to stay in the business.

There is only one factor I could be a little bit more afraid of - if a country becomes too dominant, then an event (be it a new tax, a ban or a sudden rentability problem) driving out miners from there could drop hashrate again like during the China ban. However, the US has currently probably around 35-40% of the worldwide hashrate, so in the current situation it would be less of a problem than in 2021, and 60% of the current hashrate would be still "secure enough". But such events could be problematic in the far future when the attack cost has lowered. So I share a bit your concerns about decentralization problems.

But I anyway expect a change in miner behaviour in the next 5-10 years. As electricity cost is about 70% of the cost of each Bitcoin mined (for the miners) and renewable energy share is growing around the world, I expect to switch them slowly from a 24/7 mining model to a model where they use a wholesale energy tariff (these are becoming more common now) to benefit from very low prices in times of high solar/wind production and thus at least turn off their gears voluntarily when energy is expensive, mining e.g. only 70-80% of the time but to a even lower price than now (< 5 ct/kWh is easy with this strategy, even < 3 ct is feasible. i.e. better than the famous Riot agreement of 3.5 ct). This model is much more likely to be adaptable all around the world (the "duck curve" is starting to look the same in several countries), so mining could decentralize again due to this evolution. This is controversial and has been disputed by some forum members, but they haven't convinced me that my thoughts are wrong.

There is also an additional point. Bitcoin mining companies are basically server farms. In periods of low profitability, they can diversify their income sources offering servers for other cloud services. This is already been done by most big mining companies, and it is also one of my reasons why I think that if profitability drops there will not be a "big hashrate crunch", but a very gradual process, because bigger miners will slowly dedicate more percentage of their farms to other cloud services once their hardware becomes unprofitable, instead of going offline completely. And that will re-balance with difficulty growth again and again.

[cryptosize]

But I anyway expect a change in miner behaviour in the next 5-10 years. As electricity cost is about 70% of the cost of each Bitcoin mined (for the miners) and renewable energy share is growing around the world, I expect to switch them slowly from a 24/7 mining model to a model where they use a wholesale energy tariff (these are becoming more common now) to benefit from very low prices in times of high solar/wind production and thus at least turn off their gears voluntarily when energy is expensive, mining e.g. only 70-80% of the time but to a even lower price than now (< 5 ct/kWh is easy with this strategy, even < 3 ct is feasible. i.e. better than the famous Riot agreement of 3.5 ct). This model is much more likely to be adaptable all around the world (the "duck curve" is starting to look the same in several countries), so mining could decentralize again due to this evolution.

IIRC, what you're suggesting is already a reality in Texas.

Miners there don't work 24/7/365, but only when the state has a surplus of energy.

When there's high demand for energy (during heat waves or harsh winters), they switch off ASICs.

This is controversial and has been disputed by some forum members, but they haven't convinced me that my thoughts are wrong.

Why should we trust them? Are they the sole arbiters of truth or what?

I've been saying for a long time that BTC + renewable energy + AI (to manage the energy distribution grid faster and more effectively than human beings) will be the ultimate combo until 2050 at least.

How it started:

https://www.weforum.org/agenda/2017/12/bitcoin-consume-more-power-than-world-2020/

How it's going:

https://www.instagram.com/worldeconomicforum/reel/C35FfRytPtJ/

 

Net Zero/Greta fanatics still cannot believe that Bitcoin/PoW is more ecological than they thought!

Imagine if BTC was centrally planned (like ETH) and switched to PoS:

https://cleanupbitcoin.com/

Bitcoin will help speed up the green energy transition. Few people understand this (even among the BTC community, let alone no-coiners).

ps: I'm not saying Satoshi invented it for this purpose, nor that WEF had this planned from the get-go.

[pooya87]

Hint: Profitability - It's not going up.
And there's nothing wrong with it until it hits the wall of no profit.

The hashrate is constantly rising and it has risen massively. That means mining has to be increasingly more profitable to create that incentive for people to join the mining scene by making that commitment and investment every year.

[d5000]

IIRC, what you're suggesting is already a reality in Texas. Miners there don't work 24/7/365, but only when the state has a surplus of energy.

Yes, it's beginning, but I think it's still a 95-99%-on model. AFAIK those miners only turn off the gears in periods of extreme demand surplus, when they're "ordered" to turn off operations by the electricity distributor, as a condition to benefit from energy credits (Riot case).

Anyway, I think soon we'll start to see miners doing the same but voluntarily chosing their on-/off-cycle due to them using the wholesale price (i.e. participating in auctions in the energy exchanges themselves, or with access to a tariff which follows the wholesale price - something already available in several European countries even for retail energy consumers). By the way this method would even stay relatively attractive if the "DAME" mining tax is implemented in the US, as the prices they would pay when they effectively consume would be low, and thus also the tax (Anyway I don't like the tax concept, above all own renewable generation should be always excepted.).

Why should we trust them? Are they the sole arbiters of truth or what?

Of course, that's also why I will repeat this argument until somebody proves I'm wrong - but then I've no problem to admit an own error. But I think evidence is clearly pointing into this direction

The hashrate is constantly rising and it has risen massively. That means mining has to be increasingly more profitable to create that incentive for people to join the mining scene by making that commitment and investment every year.

I think you can't deduce from the risen hashrate that mining has become more profitable. Only that it stays profitable, but currently only for those who can afford efficient ASICs and cheap electricity. The hashrate increase is very likely largely a product of hardware improvements (Moore's law).

However I agree with you that MeGold666's fears are probably unfounded - if profitability was that bad we would see a slower increase.

[pooya87]

I think you can't deduce from the risen hashrate that mining has become more profitable. Only that it stays profitable, but currently only for those who can afford efficient ASICs and cheap electricity. The hashrate increase is very likely largely a product of hardware improvements (Moore's law).

That's a good point but that's also only one of the things affecting the hashrate rise.
Keep in mind hardware improvement doesn't happen every day. For example Bitmain released S19 miner in 2020 but then the next major improvement which is S21 released 4 years later in 2024.

BTW I don't disagree that block reward falling can become a concern regarding the incentive for hashrate to continue rising. But I don't see us there yet. I believe we are far from that time, at least a couple of more halvings are needed for it to become a real concern.
Also we definitely don't need spam attacks to increase the fee to provide that "unhealthy" incentive.

[d5000]

That's a good point but that's also only one of the things affecting the hashrate rise.
Keep in mind hardware improvement doesn't happen every day. For example Bitmain released S19 miner in 2020 but then the next major improvement which is S21 released 4 years later in 2024.

Even if this is of course correct, the "hardware upgrading process" for the miners should be in general a gradual process. Not all farms will upgrade their gears at the same time, not even in the same year. And that's in my opinion the explanation that the hashrate increase looks "gradual".

Let's see how much can be explained by Moore's law with a short calculation:

- Antminer A19 (2020): 95-110 TH/s
- Antminer A21 (2024): 200 TH/s

So we have roughly a duplication in 4 years. The hashrate however quadrupled in this time (from 120 to 550 Eh/s), so Moore's Law explains about half of the hashrate growth probably.

Of course however the other big factor is the Bitcoin price increase, but the impact on miner profitability is not 1:1 as you always have to take into account the previous difficulty increases as well (that's the reason why some talk about "production costs" of Bitcoins, even if I strongly disagree calling it that way ...). And it's a bit difficult to calculate the impact due to the cyclic price behaviour. In early 2021 the price was still much lower than today, in mid-2021 and late-2021 the price spiked to similar values than now, but with a big "valley" of 35-50k in mid-2021, and in 2022 it fell drastically again.

Also we definitely don't need spam attacks to increase the fee to provide that "unhealthy" incentive.

Fully agree here

[Kruw]

Even if just 1% of the hashrate remains anti-censorship, it has a high chance to produce 1 block everyday. That's enough to clear the mempool from all blacklisted transactions every day.

The only way to censor Bitcoin is to attack it, which incidentally will affect your own income either directly through waste of electricity or indirectly through capital devaluation.

This assumes the remaining 99% of hashrate won't reorg the block created by the anti-censorship pool.

[BlackHatCoiner]

This assumes the remaining 99% of hashrate won't reorg the block created by the anti-censorship pool.

That's exactly what I mean by "attack".

[stompix]

I don't understand why in the name of god it's 2024 and we still cling to things like hashrate is going up, everything is fine the networks is more secure, and we ignore when it comes to security basic things about mining, things that guys like Burtw mentioned decade ago!!!
Quick example of why hashrate on its own is just a useless metric, so, assuming attackers need 10 billion (number pulled out of my *) now at 600exa that means back in 2013 at 400th/s you could have attacked the network with $10k? No!

So why not go the easy path of doing things, best case scenario:
- all miners are ar 3cents kwh, we completely ignore ROI, last day read was $27,476,575.85, let's round it up to 30 million, so that's 1 full TWH a day, your best efficient gear at the moment draws 85kwh so we can feed with this 11 million ASICs worth 50 billion! Nice one!
Bad scenario:
- we no longer have rewards, but Bitcoiners are spending like nuts so the fee is not 1 mil but 5 mils, all miners have 4 cents per kwh, but they also have a ROI of 2 years on the gear so we're down to 125Gwh, before ROI so with that we need additional 8$ per day per gear , so we're down to 400 000 asics being the maximum of economically viable, and that's 2 billion! Still out of my pocket reach, we're safe!
Worse case scenario:
- fees are the same as now 1mil, kwh is at 5, adding expenses keeping 2 years ROI, and we can't feed more than  70 000 asics worth 350 million.

350 million to attack a destabilize a network worth 1.4 trillion, cheap, expensive?
The good part in this is, why would Buttercup do this? Or Kim Join Us! Or the reptilians and the bildenbergs! 

Oh my bad, forgot in the worst-case scenario the attacker might not want to buy the most expensive gear but a cheaper one in cost of TH/s/$, so in head to head battle you won't need $5000 of gear to overpower a s21 you would do it with s19 that are selling for almost scarp on the market for $1800.
Which would bring down our scenario from 350 million to 126 million 

But why would anyone who feels threatened by Bitcoin spend twice the wage of the CEO of JP Morgan on killing it....

[Wind_FURY]

There are only two solutions to this problem:

.1 Switching to tail-emission and forgetting about "there will only be 21m" mantra.

Peter Todd has actually been entertaining that idea of adding a tail-emission or extending Bitcoin's inflationary period indefinitely. But it's going to be very hard to convince the community, and many people believe that the network has ossified to the 21,000,000 total coin supply. But perhaps if the situation will be life or death for Bitcoin, the community might start to entertain a discussion of a tail-emission.

.2 Switching to PoS (which will make it even more centralized)

POS doesn't work.

https://youtu.be/NYPGub6XzjE?si=YnAFxEvDmKdsudAx

[MeGold666]

The security of the Bitcoin is in hands of the few companies, if profitability drops or they find something more profitable to mine then Bitcoin network will be doomed.

I disagree with this logic.

First, if "they" (I guess you mean the big mining companies like Riot, ViaBTC etc.?) find something more profitable, then difficulty will go down, and it will become easier for smaller players to enter mining again. Decentralization in this case will probably grow, although more slowly than in the past due to higher entry barriers.

If the diff drops, so will security - small miners will join but the security will never be as high because this small miners will never be as profitable as large scale miners and the network will be at constant threat of state sponsored 51% attack from North Korea or some other sources because it will not be enough to secure a trillion+ dollar network.

Second, this will be a gradual process. While halvings are unique events, the consequences are different for each miner, depending on its exact business model (e.g. if it relies more on cheap electricity or on other scale effect, on speculation [HODLing] or not, etc.). So the most likely scenario is that if some big miner retires from the business or goes bankrupt this would be first good for the other mining companies as the difficulty pressure will be lower (hashrate will probably grow more slowly), and will help them to stay in the business.

Which means the mining will be even more centralized than today, more power in the hands of few.
This is not good for many reasons, one of which is Government control - possible forcing of OFAC rules on mining company or straight out ban like in China.
In this situation network will again have low security.

There is also an additional point. Bitcoin mining companies are basically server farms. In periods of low profitability, they can diversify their income sources offering servers for other cloud services. This is already been done by most big mining companies, and it is also one of my reasons why I think that if profitability drops there will not be a "big hashrate crunch", but a very gradual process, because bigger miners will slowly dedicate more percentage of their farms to other cloud services once their hardware becomes unprofitable, instead of going offline completely. And that will re-balance with difficulty growth again and again.

Bitcoin mining is done on ASIC's, not on general purpose CPU.
No one in the world needs this power aside from Bitcoin and other, less profitable coins running on SHA-256.

Peter Todd has actually been entertaining that idea of adding a tail-emission or extending Bitcoin's inflationary period indefinitely. But it's going to be very hard to convince the community, and many people believe that the network has ossified to the 21,000,000 total coin supply. But perhaps if the situation will be life or death for Bitcoin, the community might start to entertain a discussion of a tail-emission.

It would split the community for sure, the discussion should be done now as this tech should be running on Bitcoin years ago.
It will be too late for any action when problems arise.

However I agree with you that MeGold666's fears are probably unfounded - if profitability was that bad we would see a slower increase.

Here's an interesting info on the subject:
https://www.youtube.com/watch?v=sw6aMxaNmXA&t=416s

I suspect that hashrate was increasing only because mining companies wanted to eliminate competition.

Currently we can observe a ~30% drop in network hashrate:
https://bitinfocharts.com/comparison/bitcoin-hashrate.html#alltime



I was warning in my other posts that it's a matter of time until this big companies reevaluate their mining business and switch to more profitable projects, and it's already happening:

Marathon Digital announced on Thursday that it has decentralized its mining efforts towards mining Kaspa, an alternative proof-of-work cryptocurrency network from which the firm has gained $16 million since September.

Source: https://cryptonews.com/news/bitcoin-miner-profitability-halving.htm

Remember: There's no love in this industry, there's only $$$ and they have great financial advisors.

Bitcoin will help speed up the green energy transition. Few people understand this (even among the BTC community, let alone no-coiners).

Even fewer people understand that green energy is not green and it also produces waste.
Solar panels have a life span, batteries have a life span, electronics that run it have a life span, and nothing of it is degradable or recyclable.
Other "green" solutions are even worse...

The greenest solution is nuclear power plant, snowflakes will disagree.

Here is some information to all the glorifying disinformation propaganda circling around "green" energy when it comes to solar:
https://hbr.org/2021/06/the-dark-side-of-solar-power

The whole green industry is a scam to earn $$$ for companies who produce this waste.

We can argue all week about it but I let the time show it's madness.
I'm out from the forum for a longer while as I have some work to do, see you when the roof starts collapsing (if nothing changes to the Bitcoin protocol).

[d5000]

If the diff drops, so will security - small miners will join but the security will never be as high because this small miners will never be as profitable as large scale miners and the network will be at constant threat of state sponsored 51% attack from North Korea or some other sources because it will not be enough to secure a trillion+ dollar network.

It's interesting that you just mention North Korea, weren't that the guys making billions with Bitcoin hacks and ransomware? Why should they destroy their source of income?

Anyway: again, where is the limit between "secure" and "insecure"? Was 2019 hashrate secure enough? I believe a state actor could possibly currently carry out a short 51% attack if he wastes a lot of taxpayers money, but that wouldn't be disruptive enough to destroy Bitcoin, more like what happened to some altcoins. Even dictatorships need to justify their actions at least a bit to avoid becoming unstable, and it would be really hard to justify such a waste of money.

Which means the mining will be even more centralized than today, more power in the hands of few.

I think we agree that a centralized mining sector would not be good, but I just explained why I don't believe that your logic here is correct, just a paragraph before. Yes, the difficulty lowers in this process, and so does security. But it is still safe enough.

Bitcoin mining is done on ASIC's, not on general purpose CPU.
No one in the world needs this power aside from Bitcoin and other, less profitable coins running on SHA-256.

That is not the point. The point is that the housing/cooling infrastructure can be used for CPU servers as well. And that is already been done for some years. Many US miners are already diversified.

Currently we can observe a ~30% drop in network hashrate:
https://bitinfocharts.com/comparison/bitcoin-hashrate.html#alltime

No, that's only 30% if you take the highest single value and the lowest single value. The drop is about 15% and that's expected because it occurred in each halving until now (see 2020, 2016 ...). It will grow later this year probably.

Even fewer people understand that green energy is not green and it also produces waste.

Neither the waste nor the energy needed to produce solar panels, wind turbines, hydro facilities etc. compensate the energy they produce.

Those that really understand about the subject know that there is some waste but that this is not really a problem. There is no free lunch (still). But recycling tech is advancing too, and household waste is still a far bigger problem than silicon which can be used for landfills.

It's funny you mention nuclear energy as being better because ... well, didn't they produce waste?

disinformation propaganda

Ah ok.

I'm out from the forum for a longer while as I have some work to do, see you when the roof starts collapsing (if nothing changes to the Bitcoin protocol).

Is your mission currently failing?

By the way I'm not against a tail emission, the Monero folks are doing well with it and I think it's a reasonable model, but in the case of Bitcoin I don't think it will ever materialize due to the "ossified" 21 million limit, and I also don't think it's needed.

[stompix]

The drop is about 15% and that's expected because it occurred in each halving until now (see 2020, 2016 ...). It will grow later this year probably.

No, it didn't! 
The halving in 2016 was in July, we had just a 5% drop in August.
The May halving difficulty history looks like this:

+ 6.88 %, - 15.95 %   , + 5.77 %, + 8.45 %    , + 0.92 %, - 6.00 %,  - 9.29 %, 0.00 %, + 9.89 %

so a bit harder to find a pattern there, oh, the adjustment wasn't on the -15.95 it was on the -6 

I seriously don't understand on what you base your recovery enthusiasms, other than maybe being completely bullish on the price, miners don't care about charts, we care about income per $ spent on electricity, and this I how it looks now:
The best of the gear launched now and available makes you 11$, burns 84kwh and costs 6k,2 years ROI on zero costs.

I was pretty bullish on the growth myself, but the end of Q2 is coming and a lot of contracts will probably expire, only the big guy with dirt-cheap energy will keep on mining.

Also, in terms of network security it's the same in both cases:
300 exahash when the bets gear was the 19 with 100th/3kwh and $5000
600 exahash when the best gear is the s21 with 200th/3kw and priced at $5000

Hashrate without the cost per th/s and the amount protected is a bit meaningless!

[d5000]

I seriously don't understand on what you base your recovery enthusiasms, other than maybe being completely bullish on the price, miners don't care about charts, we care about income per $ spent on electricity, and this I how it looks now

While you're correct that in 2016 the pattern was weaker (a >10% drop was present but only for a short time, about 2-3 weeks, so you could say it did not leave the normal fluctuation range), in 2020 it was in the same order of magnitude than now:


Source: Coinwarz

There was of course before the March "hashrate crash", so the halving drop looks like "one drop more", but this one was clearly caused by the price crash due to Covid, leading probably to a short panic in the mining sector too, because if the price had stayed at $5000 or less with the incoming halving the drop would probably have been even harsher. What I can't explain at this moment is the sharp November drop (this was ATH time in '20 ...).

btw: Is your quote related to the 2020 hashrate evolution? If you mean the 15% drop was earlier (or later?), there always can be some delays, in either direction.

My recovery expectation is not based that much on price expectations but mainly on gradual continuous hardware improvements plus rising longer-term average price, see my answers to @pooya87 above.

With the rest of your post I more or less agree. It is possible that recovery takes longer if for example Riot runs into difficulties. But eventually a new equilibrium will be found. Let's see how it plays out. At least I don't think the hashrate drop caused by this halving will be as large as the one in 2021 caused by the China ban.

[takuma sato]

IIRC, what you're suggesting is already a reality in Texas. Miners there don't work 24/7/365, but only when the state has a surplus of energy.

Yes, it's beginning, but I think it's still a 95-99%-on model. AFAIK those miners only turn off the gears in periods of extreme demand surplus, when they're "ordered" to turn off operations by the electricity distributor, as a condition to benefit from energy credits (Riot case).

Anyway, I think soon we'll start to see miners doing the same but voluntarily chosing their on-/off-cycle due to them using the wholesale price (i.e. participating in auctions in the energy exchanges themselves, or with access to a tariff which follows the wholesale price - something already available in several European countries even for retail energy consumers). By the way this method would even stay relatively attractive if the "DAME" mining tax is implemented in the US, as the prices they would pay when they effectively consume would be low, and thus also the tax (Anyway I don't like the tax concept, above all own renewable generation should be always excepted.).

A new trend in miners (at least PubCO companies that im tracking) they are moving to HPC services, mostly for companies that use AI. Core Scientific just got a 12 year contract with CoreWeave, so that's a solid source of income. IREN is also planning to announce some clients and they are building infraestructure with HPC on mind. WULF as well. There are others like CleanSpark and Riot that choose to remain pure Bitcoin miners. Im ok with diversification of MW if they can leverage this properly in order to continue to remain profitable even during long bear markets, so when the bull Bitcoin market is back they will have more power ready to mine. We'll see what model turns out the best.

[stompix]

While you're correct that in 2016 the pattern was weaker (a >10% drop was present but only for a short time, about 2-3 weeks, so you could say it did not leave the normal fluctuation range),

-5, not >10!

427,392   2016-08-29 17:11:01   220,755,908,330 - 220.76 G   + 1.56 %   0x1804fb08   09 min 51 s   1.58 EH/s
425,376   2016-08-15 21:59:14   217,375,482,757 - 217.38 G   + 7.67 %   0x18050edc   09 min 17 s   1.56 EH/s
423,360   2016-08-02 21:50:42   201,893,210,853 - 201.89 G   - 5.43 %   0x18057228   10 min 35 s   1.44 EH/s
421,344   2016-07-19 02:22:42   213,492,501,107 - 213.49 G   + 0.04 %   0x18052669   10 min 00 s   1.53 EH/s
Halving Date: July 9, 2016
419,328   2016-07-05 02:16:01   213,398,925,331 - 213.40 G   + 1.88 %   0x180526fd   09 min 49 s   1.53 EH/s
417,312   2016-06-21 08:18:58   209,453,158,595 - 209.45 G   + 6.83 %   0x18053fd6   09 min 22 s   1.50 EH/s
415,296   2016-06-08 05:41:58   196,061,423,939 - 196.06 G   - 1.63 %   0x18059ba0   10 min 10 s   1.40 EH/s

btw: Is your quote related to the 2020 hashrate evolution? If you mean the 15% drop was earlier (or later?), there always can be some delays, in either direction.

I only count difficulty adjustments, daily hashrate is just all over the place, completely unreliable!

What I can't explain at this moment is the sharp November drop (this was ATH time in '20 ...).

End of China's rainy season!
Short story, cheap hydro energy during the rainy season, end of October-November, gear gets shipped back to inner Mongolia to feed on coal, it was an annual occurrence!

495,936   2017-11-24 21:53:16   1,347,001,430,558 - 1.35 T   - 1.28 %   0x1800d0f6   10 min 08 s   9.63 EH/s
493,920   2017-11-10 17:13:51   1,364,422,081,125 - 1.36 T   - 6.09 %   0x1800ce4b   10 min 40 s   9.75 EH/s
~
552,384   2018-12-03 13:59:28   5,646,403,851,534 - 5.65 T   - 15.13 %   0x1731d97c   11 min 47 s   40.40 EH/s
550,368   2018-11-17 01:51:24   6,653,303,141,405 - 6.65 T   - 7.39 %   0x172a4e2f   10 min 48 s   47.61 EH/s
~
604,800   2019-11-21 19:08:52   12,973,235,968,799 - 12.97 T   + 1.99 %   0x1715b23e   09 min 49 s   92.81 EH/s
602,784   2019-11-08 01:30:36   12,720,005,267,390 - 12.72 T   - 7.10 %   0x171620d1   10 min 46 s   91.02 EH/s

But eventually a new equilibrium will be found. Let's see how it plays out.

Equilibrium could be found even at 5 exa and price per BTC at $600, but I have a feeling in terms of security nobody would be happy about it!

[d5000]

@stompix: Ok, thanks for clarifications. The >10 was referred to the approximate 1-week average of daily hashrate, not diff adjustments.

Difficulty adjustments is indeed a better metric than daily hashrate. But difficulty until now fell only 5.1% since the maximum in April according to Coinwarz (88.1 T to 83.7 T). I guess it will fall a bit lower in the next adjustment but I'm still not convinced it will get lower than -15 or -20% from the pre-halving maximum.

Again, let's see

What I however don't understand is why you think that this time it's different to previous halvings and recovery will not occur or be slower than in 2016 and 2020.

If we look at the 2024 halving from a reward perspective, it was less devastating for miner income than 2016 and 2020, because the reward is already so low that transaction fees are increasing their share, so it's no more a 48-50% income reduction but more close to 40-45%.

But let's explore the possibilities a bit. One argument could be the stagnant price evolution since April, but a strong counter-argument is just 2016, when the post-halving price evolution was stagnant for a long time, basically until November/December, but hashrate/difficulty recovery was very fast. In 2020 we also had much more bearish conditions than now in 2024, if we take into account that the price in 2019 had reached almost $15.000 and at halving date was around $10.000, and also there was price stagnation for some months (and the real bullrun only began in November).

Another argument could be that the current hashrate is "inflated" due to publicly listed mining companies like Riot who diluted their shares but are probably mining on a loss actually, i.e. operating close to a "ponzi" but preserving a high hashrate. This would be more convincing for me, as I already wrote in the last post. But does that apply to all bigger miners? I have some doubts here.

Edit: If I understand your posts well then your argument is that "attack cost" variable is going to lower with each halving, as hashrate could be going up but the attack cost not. I sorta agree here but don't think it will come into dangerous territory as long as we have significant transaction fees.

A new trend in miners (at least PubCO companies that im tracking) they are moving to HPC services,

Yes, miner diversification is definitely an interesting evolution. It could lead to more income stability for mining companies but the hashrate could stay relatively volatile, because it's easier to simply change hardware than to set up or dismantle entire mining farms.

[stompix]

If we look at the 2024 halving from a reward perspective, it was less devastating for miner income than 2016 and 2020, because the reward is already so low that transaction fees are increasing their share, so it's no more a 48-50% income reduction but more close to 40-45%.

Income! That's the problem!
I mined at 45 cents/th back in 2021, I could take a 66% drop because I would still be profitable even at 15 cents/th.
If I would still have mined at 10 cents/th (before halving) and got even a 33% I would be losing money!

Income at 45 cents and expenses at 8 cents/ths means a cut of 50% I still make 18cents/s profit!
Income at 10 cents and expenses at 8 cents means that a 50% I'm in red by 3 cents!

In 2020 we also had much more bearish conditions than now in 2024, if we take into account that the price in 2019 had reached almost $15.000 and at halving date was around $10.000, and also there was price stagnation for some months (and the real bullrun only began in November).

A lot of different things, profitability was still higher by 40%.
The s19 was shipping in May after a shitton of preorders because it was outperforming the s17 from 0.045j/Gh to 0.034j/Gh.
The summer had cheap energy from China, which is not here anymore see the power curtailing in the US now .
ROI at 0 costs for the s19 was still just over a year, not two and a half years for the s21 as now.

Another argument could be that the current hashrate is "inflated" due to publicly listed mining companies like Riot who diluted their shares but are probably mining on a loss actually, i.e. operating close to a "ponzi" but preserving a high hashrate. This would be more convincing for me, as I already wrote in the last post. But does that apply to all bigger miners? I have some doubts here.

Well Riot has never made money, Stronghold is for sale, Core is taking a $75m loan not to enter bankruptcy again, Mara is sitting on 600 million of debt and "investors" money.....

Edit: If I understand your posts well then your argument is that "attack cost" variable is going to lower with each halving, as hashrate could be going up but the attack cost not. I sorta agree here but don't think it will come into dangerous territory as long as we have significant transaction fees.

Exactly, each halving when the price doesn't double means less security overall, and even if does double it still means 1/2 security to market cap.
As for the fees, they are 4% of the reward, if you expect people to pay 30 million for 400k tx day, well, how can I say it... don't! 

[d5000]

Thank you for this post, I now understand your arguments better.

Basically so your point is that in the last halvings the profitability was much higher than now and miners had margin to "manage" the halvings with minor adjustments to the business model, While now the margins for miners are much thinner, so with every income problem (like halvings or price crashes) there's danger to lose larger parts of the hashrate without immediate recovery. So it's basically what I meant with the "inflated" hashrate.

I still don't see this as critical for Bitcoin's wellbeing / security, at least not in the short/mid term.

If the assumption is true, then the mining market was never really mature: Until 2021 we may had seen a market with lower supply than the optimum (and thus high profitability margins). It's possible according what I read in the forum and other communities that this was mainly caused by hardware shortage - there were less gears available than people willing to mine. And according to this assumption, we are now in a phase with a higher supply (of hashrate) than the optimum, with several miners mining at a loss.

The consequences would be that we could se a sharper hashrate drop, but in general this would mean that the market would be maturing and that would be in general favourable for Bitcoin because if we see really a major hashrate drop this year, this will probably not happen again then so easy and the curves would become smooth again. Miner diversification into housing / AI / HPC is a sign of that business models are evolving to more sustainable ones.

The problem that halvings are still a reduction of security vs. market cap of course remains, I never disputed that. This is of course also the root of the big block/small block debate or of ideas like "Bitcoin should go PoS" or "tail emissions". My argument is that if nothing changes, we could lose 40-45% attack cost vs. market cap in this halving, the next time it will be closer to 30-40%, then 20-30% and so on because fees will make up a larger portion of the income even if the fees in USD stay constant.

But we could improve that equation with models like merged mined sidechains (higher throughput for the same fee level -> slightly higher cost for miners but much larger attractivity for users -> higher usage -> higher price -> higher overall security).