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Author Topic: What assumptions are people using to justify adding mining rigs?  (Read 4431 times)
Sjalq
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June 03, 2011, 06:00:59 AM
 #41

I want Bitcoins and I want to help secure and process Bitcoin transactions. I assume others will exchange Bitcoins with me in the future. I justify this with the fact that I don't like other people to control my currency and I assume there are others like me.

Bingo.  The goal here is to participate in the revolution.

Shall I drop $4k into a top-of-the-line tri-GPU monster, without any guarantees of return?  You sure-as-hell bet I will!

With WikiLeaks busy leaking, DarkNets in production, and NameCoin/BitCoin all working together to revolutionize and free the world's communications and monetary systems, a couple of high-end gaming computers is the *least* I can contribute.

Oh, and, there's still a chance for profit, too!  Win/Win.

Amandla!

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Litt
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June 03, 2011, 08:10:47 AM
 #42

I for one is ok with the Russians ddosing pools reaching 50%. Some thing has to be done.

And as for people using assumptions to justify mining rigs... well it's mostly ignorance I bet. Because speculating for higher btc price means buying will still yield higher again compared to mining as it's been since the rise of btc pricing this year. The times of mining for profit for long time at .70 cent per btc is over. The cat is out of the bag if you didn't notice. The difficulty will keep climing at high rates now and it won't slow down like people hope. The opposite is more likely to happen and speed up even faster.

At current uptrend on pricing, sure mining looks to be safe, but investing has proven much better with prices going up anyways. If you are still buying instead of investing now.. you are simply ignorant imo and haven't done the math. Free hardware can be bought with or without mining..  As for me I'm putting money where my mouth is and stopping reinvesting in mining equip and buying instead. My profits speak for themselves and I won't need anyone here to agree with me. I just hope people will finally realize and make even more money with me. I mine and invest both and making money from holding btc is infinitely easier than monitoring and running miners at home with noise and heat.
fnord123
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June 03, 2011, 05:37:42 PM
 #43

Plus, the attacker can "prepare" his own new pool while attacking all remaining. All would switch to his pool, and he would easily gain >50% of network. You would not know at all, he can "fake" his pool stats. Then, he rules the network.
A smart attacker would create his pool ahead of time - e.g. one of the current pools could actually be the attacker.  They would have two versions of the mining pool SW - version #1 is the "honest" one, they would run this for a while, likely with low-to-no fees, to get a reasonable user base and reputation.  Then, when they feel they are ready, they would DDOS enough other pools to make people flock to theirs. Once they hit 50%, they would activate version #2 of their mining pool SW, the one that steals coins/double spends/whatever.  Since they own more than half the hashing power at that point, they win.  People will eventually figure it out, but when they do, confidence in BTC will be crushed and you would see a crash in values.
Sjalq
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June 04, 2011, 06:58:21 AM
 #44

Is this actively being discussed in the security related parts of the forum?

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Ulysses
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June 07, 2011, 03:03:06 PM
 #45

A smart attacker would create his pool ahead of time - e.g. one of the current pools could actually be the attacker.  They would have two versions of the mining pool SW - version #1 is the "honest" one, they would run this for a while, likely with low-to-no fees, to get a reasonable user base and reputation.  Then, when they feel they are ready, they would DDOS enough other pools to make people flock to theirs. Once they hit 50%, they would activate version #2 of their mining pool SW, the one that steals coins/double spends/whatever.  Since they own more than half the hashing power at that point, they win.  People will eventually figure it out, but when they do, confidence in BTC will be crushed and you would see a crash in values.

You miss the quote from Satoshi's paper:

The incentive may help encourage nodes to stay honest.  If a greedy attacker is able to
assemble more CPU power than all the honest nodes, he would have to choose between using it
to defraud people by stealing back his payments, or using it to generate new coins.  He ought to
find it more profitable to play by the rules, such rules that favour him with more new coins than
everyone else combined, than to undermine the system and the validity of his own wealth.


Of course there are sociopaths, who don't want make money. But usually they can't raise capital. And the notion of state (who doesn't need to be for profit and have capital) running >50% of network power to double spend seems to be absurd to me (though i can be wrong).
jfourmo
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June 07, 2011, 03:22:58 PM
 #46

I put together my own Google spreadsheet to examine whether it makes sense to add to what I am currently using to mine, and the numbers keep looking bad.  E.g. for a triple 5830 system:

Days to next reset:5.0, based on http://blockexplorer.com/q/eta
Difficulty of next reset: 513600, based on http://blockexplorer.com/q/estimate
Days per difficulty increase after the next one: 8
Difficulty increase factor after the next one: 1.3 (30% average increase)
Watts: 550
$/KWh: 0.12
MHash/Sec: 840 (3 * 280 per 5830)
$/Bitcoin: 10

Running the above numbers, on August 18 the electric cost exceeds the generated bitcoin value. Total income at that point (assuming selling bitcoins at $10 apiece) is $492 - putting together a 3-way 5830 system for $492 is pretty tough (used parts maybe?)

Are other people using more optimistic numbers?

How about this, at no time in the last year has bitcoin cost more than 1/4 of its exchange value to generate based on electricity. It's currently at about 1/17th the value to generate (this fluctuates over time and just left an all time high). People have been doing calculations like you have for months saying the same thing you have
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