123

[Serith]

OP knows too much about Bitcoin for just 14 days of learning, I speculate it's Matthew N. Wright.

[gmaxwell]

Solo mining is pointless because of Moore's law - if you are mining off a single GPU the rate of technological change will outstrip your ability to get the 50btc  bounty even once. You can calculate it today based on the equipment you have today at the current difficultly - it will report in the next year you may get 50btc if you are lucky (based on today's values). But during the next year the difficulty will increase and processing power will increase so it will take you 3 years and then 10 and then 50 years.  You may as well buy lottery tickets.
As a solo minor you will be forever chasing it, because of the increasing difficulty and the relative decreasing power of your hardware.

Wow. I'm really disappointed to see this misinformation still being promoted. It is completely untrue.  It's perfectly possible to solo mine and solve a block with your very first hash operation— just unlikely.   Assuming an idealized zero latency zero fee pool your expected return is the same either way.  With real pools its somewhat lower compared to a well maintained local node solo mining (although that may be something of a stretch, the reference client has some scalability / stability issues that make maintaining it harder than should be, but we're working on that).

Sequential trials of N months each isnt the right way to think about this. There are sequential trials— but they're happening billions of times a second, one for each hash operation.   A better mental model is to imagining forking off 2 million copies of the universe, a million solo mining, and a million pool mining. After any span of time the average of each of the groups would be the same (minnus pool fees and stales from latency to the pool, and differential maintenance quality in each), but the distribution would be different: in each of the pool universes you'd have a similar amount of coins, while in the solo universes some of you would have nothing, some would have the expected, some would have an enormous amount more than expected, but the over expected would match up with the under expected and the result is the expected average.

Or you you can think about it as choosing between two lotteries to play, one has a 1/1000 odds and pays out $0.98 (2% fee) for each win, and the other has a 1/1000000 odds and pays out $1000 for each win. Playing the lotteries cost the same, and you can play them thousands of times a day. Sometime in the future the relative odds will change but the payouts will stay matched. Which lottery do you prefer to play?     If not getting $.98 right away would make you die of dehydration then the pool is a clear win... otherwise it just depends on your relative risk tolerance and how you value your time. If the risk reduction and time savings doesn't justify the pools fees and hazard to bitcoin security (even if just theoretical: FUD hurts bitcoin too) for you then you should prefer to solo-mine.  (Or P2Pool!)

Difficulty changes don't make a bit of difference in this.  If you instead think about hash rate in terms of percentage of the total you can pretty much ignore the difficulty changes entirely.  

[Luke-Jr]

The new ASIC-needed getblocktemplate mining protocol is intentionally designed to be decentralized, moving the block creation back from the mining pools into the individual miners.
Mining with GBT enables doing several automated security security audits of pools in realtime, and the same level of control for miners who are willing to run a local bitcoind instance.
Furthermore, ASICs are available to any consumer who wants to buy one, at more than reasonable prices as low as $150 - about as cheap as the average GPU.

On the other hand, there is currently a major problem of centralization on software for Bitcoin nodes and wallets.
This is also being dealt with, but at a slower pace. Hopefully the new Bitcoin Foundation will help move things along quicker: I imagine once Bitcoin-Qt and/or bitcoind reach 1.0, Bitcoin will be bigger and people will have more time for multiple independent implementations.

[kjj]

Solo mining is pointless because of Moore's law - if you are mining off a single GPU the rate of technological change will outstrip your ability to get the 50btc  bounty even once. You can calculate it today based on the equipment you have today at the current difficultly - it will report in the next year you may get 50btc if you are lucky (based on today's values). But during the next year the difficulty will increase and processing power will increase so it will take you 3 years and then 10 and then 50 years.  You may as well buy lottery tickets.
As a solo minor you will be forever chasing it, because of the increasing difficulty and the relative decreasing power of your hardware.

Wow. I'm really disappointed to see this misinformation still being promoted. It is completely untrue.  It's perfectly possible to solo mine and solve a block with your very first hash operation— just unlikely.   Assuming an idealized zero latency zero fee pool your expected return is the same either way.  With real pools its somewhat lower compared to a well maintained local node solo mining (although that may be something of a stretch, the reference client has some scalability / stability issues that make maintaining it harder than should be, but we're working on that).

I didn't read it like that at all.

An "average" CPU is about 4 times as powerful today as it was 4 years ago (2 doublings), but the difficulty is 3 million times higher.  That means an average of 30,000,000 minutes between blocks for a typical CPU, or about 14 years.  What fraction of 14 year old CPUs do you suppose are still running today?

The typical payout for CPU mining is zero, over the entire lifetime of the CPU, even though some people might get lucky.

[DoomDumas]

Solo mining, is it now comparable to go in western america, find a river and search for gold with a large metal plate, trying to filter some mini gold nuggets from the sand out of that river ?  Like if we're still in the klondike era ?

I think you get the image !

[markm]

This is silly.

It is far from true that mining will be centralised among beverage drinkers, with only drinkers of coffee using coffee-warmers.

Some ingenious tea-drinkers will find ways to adapt coffee-warmers for the purpose of warming tea, and drinkers of hot chocolate, ovaltine, mulled hot cider and other hot beverages will be inspired to attempt adapting them to the warming of their beverages also.

Now if you are asserting that the number of drinkers of hot beverages in the world is far from sufficient to match the mining power of various NSA cyber-centres, Wall Street datacentres, massively merged mining establishments and so on and so on, I'd like to see a few numbers put on your projections.

Or do you maybe consider a coffeewarmer for every hot beverage drinker simply another free hashingbot for the botnetters?

I paid more each for a couple of second-hand 5870s than a coffee-warmer is going to cost me. So the move to ASIC seems like a move toward making it less expensive, not more expensive, for average beverage-drinkers to obtain computers and equip those computers to mine cryptocoins...

-MarkM-

EDIT: p2pool is probably worth mentioning again too.

[cunicula]

I don't think decentralized means what you think it means.  Gold mining is far more decentralized than printing USD for example.  Is the gold supply not decentralized because every single person without skill or resources can't just dig a hole in their backyard and find gold?

The OP is pointing out that decentralization is related to returns-to-scale.

If the minting technology has increasing, but exhaustible, returns-to-scale, then it will tend towards oligopoly. This is the current status of proof-of-work.

If the minting technology has unlimited increasing returns-to-scale, then it will tend towards monopoly (full centralization). It is unclear if this will be true of proof-of-work in the long run.

Oligopoly is not that worrisome, monopoly is more concerning.

There are alternatives which, in the long-run, may not exhibit increasing returns at all (see PPC coin). If you are really worried about this issue, then take your investment elsewhere.

[cunicula]

You missed the point of this whole thread. How much Bitcoins each miner earns should be ... no, MUST be secondary to integrity of Bitcoin network.

You miss the whole point of Bitcoin. The profitability of being a miner IS integral to the security and integrity of the network.

This is a severe flaw, not a feature. It can be avoided with better design. For one attempt, see PPC coin.

[kjj]

You missed the point of this whole thread. How much Bitcoins each miner earns should be ... no, MUST be secondary to integrity of Bitcoin network.

You miss the whole point of Bitcoin. The profitability of being a miner IS integral to the security and integrity of the network.

This is a severe flaw, not a feature. It can be avoided with better design. For one attempt, see PPC coin.

LOL, yeah, checkpointcoin for the win.

P.S.  Proof-of-stake tends towards oligopoly/monopoly because stake has no ongoing cost and tends to accumulate.

[LoupGaroux]

subby- let's get the basics out of the way first, shall we? Kiss my ass. Your arrogant, ill-informed, pseudo-intellectual horseshit is nothing more than the drooling of an amateur Atlas. 88 posts and you are already willing to prostitute yourself with sig ads? You are a classic little bootlick aren't you?

1. Essentially nobody agrees with you. You have seized on one tangential argument, made it poorly and turned into a mouth breathing simpleton about it. Who cares about your thoughts on the matter?

2. Your open hostility and irrational potty mouth does nothing to enhance your worth as a agent provocateur for whatever cause you seem to want to spout. Nobody can hear your voice through the silliness.

3. You are utterly clueless about the nature of the best here. With the possible exception of 3 very noble souls who banked at unfathomable levels in the early adopter phase, nobody here gives fuck-all concern about the network. Nobody cares about the security of the beast, nobody wants to see anything. The only real purpose for bitcoin is to create pretend businesses that speculate in making more bitcoins out of nothing at all, and buying drugs on Silk Road. Beyond that everyone is too broke, stoned, or on the run with their ill-gotten gains to worry about the fucking network. It's a lot like a whorehouse in that respect... if you aren't the guy playing the piano you are either fucking or getting fucked, ain't no middle ground. And since very few whorehouses care at all about the network... you will end up being ignored by everyone. Especially because you think you should be a dick about it.

4. And if it is really all that important to you to come here and try the same tired foolishness, why not do it under your RealSolid/CoinHunter/DoucheBag handle? Why all the effort to create a new identity and whip up 88 worthless posts in two weeks?

[cunicula]

P.S.  Proof-of-stake tends towards oligopoly/monopoly because stake has no ongoing cost and tends to accumulate.

The system tends to oligopoly if the risk-adjusted rate of return on investment increases as more is invested. This is true in solo mining, but not in pooled mining or PPC coin's version of proof-of-stake.

You are saying that if people reinvest minting earnings in minting assets, then their share in total minting assets will grow over time. Okay, but of course that is equally true in proof-of-work as well.

Is there a logical argument supporting your views that I should be aware of?

[cunicula]

You may as well buy lottery tickets.

Wow. I'm really disappointed to see this misinformation still being promoted. It is completely untrue.

Where is the fallacy here? Solo mining is to pool mining as being paid in lottery tickets is to being paid in cash.
A perfectly valid analogy.

[kjj]

P.S.  Proof-of-stake tends towards oligopoly/monopoly because stake has no ongoing cost and tends to accumulate.

The system tends to oligopoly if the risk-adjusted rate of return on investment increases as more is invested. This is true in solo mining, but not in pooled mining or PPC coin's version of proof-of-stake.

You are saying that if people reinvest minting earnings in minting assets, then their share in total minting assets will grow over time. Okay, but of course that is equally true in proof-of-work as well.

Is there a logical argument supporting your views that I should be aware of?

How about the logical argument that I said, instead of the one the nonsense that you imagined me saying?  I'll repeat it for you, and highlight a key point.  "Proof-of-stake tends towards oligopoly/monopoly because stake has no ongoing cost and tends to accumulate."

[cunicula]

How about the logical argument that I said, instead of the one the nonsense that you imagined me saying?  I'll repeat it for you, and highlight a key point.  "Proof-of-stake tends towards oligopoly/monopoly because stake has no ongoing cost and tends to accumulate."

So proof-of-work mining has capital costs and electricity costs. Proof-of-stake mining only has capital costs. Can you make a logical argument why this would matter?

Hint: Consult an economics textbook. It doesn't matter. All that matters is whether returns-to-scale are decreasing, constant, or increasing.
 

[Luke-Jr]

Proof-of-stake (at least all existing attempts I know of) also allows miners to use it for attacks in parallel to the legitimate blockchain. That is, there is no cost to attempt to fork the blockchain. Incentively speaking, this means rational miners should mine every chain that does not hurt them personally.

[cunicula]

Proof-of-stake (at least all existing attempts I know of) also allows miners to use it for attacks in parallel to the legitimate blockchain. That is, there is no cost to attempt to fork the blockchain. Incentively speaking, this means rational miners should mine every chain that does not hurt them personally.

Yes, this is true and unfortunate. PPC coin is a pure proof-of-stake system. Attacks are costless. Miners should extend any and every fork they see.

I argued for a mixed proof-of-stake/proof-of-work system based on coin age in the proof of stake wiki.
https://en.bitcoin.it/wiki/Proof_of_Stake

Attack attempts would cause output losses under a mixed system.
 
I hope that PPC coin will eventually move to a mixed system, but who knows.

 

[kjj]

How about the logical argument that I said, instead of the one the nonsense that you imagined me saying?  I'll repeat it for you, and highlight a key point.  "Proof-of-stake tends towards oligopoly/monopoly because stake has no ongoing cost and tends to accumulate."

So proof-of-work mining has capital costs and electricity costs. Proof-of-stake mining only has capital costs. Can you make a logical argument why this would matter?

Hint: Consult an economics textbook. It doesn't matter. All that matters is whether returns-to-scale are decreasing, constant, or increasing.

Because there is no cost.  You make the investment once, and then benefit forever.  Your hybrid system has this same flaw, an investment in stake multiplies your apparent work for all eternity.  In POS, the returns-to-scale in stake is infinite.

I note that the length of your wiki page on POS has grown rather large and convoluted as you keep trying to throw different crutches into the system to prop up first the fundamental flaws, and then the secondary flaws created by the earlier crutches, and then tertiary, etc...

The source code for bitcoin is freely available, all of the functions for creating and verifying signatures exist already, there is room in the header to add a signature field, and none of your rules look particularly hard to implement.  Go ahead and create your altcoin, exactly the way you want it, so that you can prove to all of us that we are wrong about your ideas.  I'll bet you 1 BTC that someone like artforz will totally pwn your chain and have a near absolute, but still unstoppable, monopoly on generation within a week.

[kjj]

Sigh. I'm done with this 'discussion'. If you would like me to educate you further, send BTC to 1BQj536K9UdKexLbYvPvstc1awt8ZvJrBQ.

Meh.  I've read most of your thousand or so posts; I don't think I can take any more "education" without puking.  Very much looking forward to the launch of cuniculacoin though.

[Hawkix]

No one replied about making ASICs sort of access point to Bitcoin network. I had no time to elaborate yesterday, it was late here,
but today I'll try to sum my opinions on the matter. Keep in mind I might make serious errors here - 2 weeks is not enough time to
learn tinny but probably important details.

Pros:

1. Much bigger target customer base would drop price of ASIC access points - manufacturers can go with smaller profits per unit.
2. Very easy to set up - hook up few cables and you're ready to go.
3. Noticably increased strength of network - even the weakest node would be contributing at least few GHash/s.
4. No dependencies on pools - each and all devices are solo and only solo miners.
5. Wallet is not bound to device - usage of USB sticks as hardware wallets would allow anyone to use any device, regardless of location.

Cons:

1. Hackable? 

I probably understand what you intend to achieve, but it will not work. You cannot restrict users on doing whatever they want, the system must work even if anyone can hack the device etc. In current Bitcoin, once you can find hash difficult enough, it is valid, regardless if you find it on Pentium II, an array of ASICS, broke the SHA256 or have a monkey which can type in good nonce.

In addition, once the only-ASICs got popular and you will have tens of thousands of users, they will stop mining, because they will not want to wait year for their found block. Its human behavior to be greedy and unpatient .. if you cannot "feed them "regularly", they will abandon the idea.

[wachtwoord]

It's irrelevant if few thousands who are mining for profit and profit only, completely ignoring any other aspect of Bitcoin including
long-term integrity of network and thus their own BTCs, will quit.

The beauty is that the greed of the few will benefit the many because their goals are streamlined. It is what some of us refer to as the free market