Analysis and list of top big blocks shills (XT #REKT ignorers)

[VeritasSapere]

...
P.S. To avoid complicated maths, model this at the limit, i.e. "the cost of mining 1 BTC is slightly less than market price of 1 BTC, as per satoshi's prognostication.

P.P.S: Which would you do:
1. spend 10 dollars to make five dollars
2. spend "five hundred and twenty million dollars" to make a billion dollars
(chose one)

The cost of mining one BTC is not slightly less than the market price of one BTC. When Satoshi mentioned this he was pointing out something that I am alluding to as well however. Which is that miners will chase profit until it is not as profitable anymore. For example, if Bitcoin doubles in price my mining operation will all of a sudden make twice as much money, at such a point it does make sense for me to expand my operation so that more profit can be made. A good mining operation should expand and retract depending on the network conditions, an increased price is a very clear sign for most miners to expand, unless the difficulty is skyrocketing as well, which does however imply that other miners beat them to the expansion, which is pretty much what is happening now with the mining industry.

Assume: you are a perfect miner, mining at the ragged edge of profitability today.
Wat do nao?

@BlindMayorBitcorn: we'll figure it out as we go along, don't worry

I do not understand your question. I am actually a real world miner though, so I do have insights in how mining works today. The equipment I set up a year ago is still running profitably today, and I have already past my ROI. Hopefully I will be able to buy into the next generation of miners. If the Bitcoin price did increase more I would actually buy more of the present generation now, for me this does depend on the price however, most likely I will end up waiting for the next generation of chips before I expand my operation more.

[BlindMayorBitcorn]

...
P.S. To avoid complicated maths, model this at the limit, i.e. "the cost of mining 1 BTC is slightly less than market price of 1 BTC, as per satoshi's prognostication.

P.P.S: Which would you do:
1. spend 10 dollars to make five dollars
2. spend "five hundred and twenty million dollars" to make a billion dollars
(chose one)

The cost of mining one BTC is not slightly less than the market price of one BTC. When Satoshi mentioned this he was pointing out something that I am alluding to as well however. Which is that miners will chase profit until it is not as profitable anymore. For example, if Bitcoin doubles in price my mining operation will all of a sudden make twice as much money, at such a point it does make sense for me to expand my operation so that more profit can be made. A good mining operation should expand and retract depending on the network conditions, an increased price is a very clear sign for most miners to expand, unless the difficulty is skyrocketing as well, which does however imply that other miners beat them to the expansion, which is pretty much what is happening now with the mining industry.

Assume: you are a perfect miner, mining at the ragged edge of profitability today.
Wat do nao?

@BlindMayorBitcorn: we'll figure it out as we go along, don't worry

I do not understand your question. I am actually a real world miner though, so I do have insights in how mining works today.

What will you do when you're getting half what you're getting now??

[bargainbin]

...
P.S. To avoid complicated maths, model this at the limit, i.e. "the cost of mining 1 BTC is slightly less than market price of 1 BTC, as per satoshi's prognostication.

P.P.S: Which would you do:
1. spend 10 dollars to make five dollars
2. spend "five hundred and twenty million dollars" to make a billion dollars
(chose one)

The cost of mining one BTC is not slightly less than the market price of one BTC. When Satoshi mentioned this he was pointing out something that I am alluding to as well however. Which is that miners will chase profit until it is not as profitable anymore. For example, if Bitcoin doubles in price my mining operation will all of a sudden make twice as much money, at such a point it does make sense for me to expand my operation so that more profit can be made. A good mining operation should expand and retract depending on the network conditions, an increased price is a very clear sign for most miners to expand, unless the difficulty is skyrocketing as well, which does however imply that other miners beat them to the expansion, which is pretty much what is happening now with the mining industry.

Assume: you are a perfect miner, mining at the ragged edge of profitability today.
Wat do nao?

@BlindMayorBitcorn: we'll figure it out as we go along, don't worry

I do not understand your question. I am actually a real world miner though, so I do have insights in how mining works today.

So, as an IRL miner, what are you doing? Expanding? With the difficulty pretty much doubling over the past 3 month, how is that working out for you?
Or are you 'retracting'? If so, how does one go about doing that? (assuming scale here, or do you mean you got a couple of S7s in the garage?)

@BlindMayorBitcorn: he thinks the price of BTC will magically grow overnight, to make up for losses caused by halvening. Because reasons.

[brg444]

I do not understand your question. I am actually a real world miner though, so I do have insights in how mining works today.

Meh you know how to turn on mining gear, big deal. That's all the insight you can provide really. There are so many holes in your arguments all you're left doing is constantly moving the goal post.

[jonald_fyookball]

...
P.S. To avoid complicated maths, model this at the limit, i.e. "the cost of mining 1 BTC is slightly less than market price of 1 BTC, as per satoshi's prognostication.

P.P.S: Which would you do:
1. spend 10 dollars to make five dollars
2. spend "five hundred and twenty million dollars" to make a billion dollars
(chose one)

The cost of mining one BTC is not slightly less than the market price of one BTC. When Satoshi mentioned this he was pointing out something that I am alluding to as well however. Which is that miners will chase profit until it is not as profitable anymore. For example, if Bitcoin doubles in price my mining operation will all of a sudden make twice as much money, at such a point it does make sense for me to expand my operation so that more profit can be made. A good mining operation should expand and retract depending on the network conditions, an increased price is a very clear sign for most miners to expand, unless the difficulty is skyrocketing as well, which does however imply that other miners beat them to the expansion, which is pretty much what is happening now with the mining industry.

Assume: you are a perfect miner, mining at the ragged edge of profitability today.
Wat do nao?

P.S. also, what do you mean by "expand and retract"? How does a mining operation go about retractng, exactly?

@BlindMayorBitcorn: we'll figure it out as we go along, don't worry

Cost of mining IS slightly less than market price at least in theory.   If price rises then miners will expand operations en masse , driving up hashrate and difficulty, in turn driving profits back to market prices.  Such is the case for any commodity.  

[VeritasSapere]

...
P.S. To avoid complicated maths, model this at the limit, i.e. "the cost of mining 1 BTC is slightly less than market price of 1 BTC, as per satoshi's prognostication.

P.P.S: Which would you do:
1. spend 10 dollars to make five dollars
2. spend "five hundred and twenty million dollars" to make a billion dollars
(chose one)

The cost of mining one BTC is not slightly less than the market price of one BTC. When Satoshi mentioned this he was pointing out something that I am alluding to as well however. Which is that miners will chase profit until it is not as profitable anymore. For example, if Bitcoin doubles in price my mining operation will all of a sudden make twice as much money, at such a point it does make sense for me to expand my operation so that more profit can be made. A good mining operation should expand and retract depending on the network conditions, an increased price is a very clear sign for most miners to expand, unless the difficulty is skyrocketing as well, which does however imply that other miners beat them to the expansion, which is pretty much what is happening now with the mining industry.

Assume: you are a perfect miner, mining at the ragged edge of profitability today.
Wat do nao?

@BlindMayorBitcorn: we'll figure it out as we go along, don't worry

I do not understand your question. I am actually a real world miner though, so I do have insights in how mining works today.

What will you do when you're getting half what you're getting now??

That depends on the price, most likely scenario is that I will have to down clock or turn off my older equipment while I should be able to keep all of the newer equipment running, especially if I buy into the next generation of equipment closer to the next halving.

[Fatman3001]

@bargainbinlambie Any attack will be clear for all to see. The value of what's stolen will be destroyed.

So what's the plan here exactly? Was the block reward intended to just bootstrap the network? Fees are supposed to suddently up and kick everybody in the face? That seems odd.  

Bootstrap the network and distribute coins. For there to be fees there has to be users. For there to be users Bitcoin needs to be useful. Right now it's useful for speculation. Sort of hard for the network to make money from fees when this is the case. So basically, the people who's supposed to pay the fees haven't arrived yet.

[BlindMayorBitcorn]

@bargainbinlambie Any attack will be clear for all to see. The value of what's stolen will be destroyed.

So what's the plan here exactly? Was the block reward intended to just bootstrap the network? Fees are supposed to suddently up and kick everybody in the face? That seems odd.  

Bootstrap the network and distribute coins. For there to be fees there has to be users. For there to be users Bitcoin needs to be useful. Right now it's useful for speculation. Sort of hard for the network to make money from fees when this is the case. So basically, the people who's supposed to pay the fees haven't arrived yet.

Oh dear. 

[VeritasSapere]

...
P.S. To avoid complicated maths, model this at the limit, i.e. "the cost of mining 1 BTC is slightly less than market price of 1 BTC, as per satoshi's prognostication.

P.P.S: Which would you do:
1. spend 10 dollars to make five dollars
2. spend "five hundred and twenty million dollars" to make a billion dollars
(chose one)

The cost of mining one BTC is not slightly less than the market price of one BTC. When Satoshi mentioned this he was pointing out something that I am alluding to as well however. Which is that miners will chase profit until it is not as profitable anymore. For example, if Bitcoin doubles in price my mining operation will all of a sudden make twice as much money, at such a point it does make sense for me to expand my operation so that more profit can be made. A good mining operation should expand and retract depending on the network conditions, an increased price is a very clear sign for most miners to expand, unless the difficulty is skyrocketing as well, which does however imply that other miners beat them to the expansion, which is pretty much what is happening now with the mining industry.

Assume: you are a perfect miner, mining at the ragged edge of profitability today.
Wat do nao?

@BlindMayorBitcorn: we'll figure it out as we go along, don't worry

I do not understand your question. I am actually a real world miner though, so I do have insights in how mining works today.

So, as an IRL miner, what are you doing? Expanding? With the difficulty pretty much doubling over the past 3 month, how is that working out for you?
Or are you 'retracting'? If so, how does one go about doing that? (assuming scale here, or do you mean you got a couple of S7s in the garage?)

@BlindMayorBitcorn: he thinks the price of BTC will magically grow overnight, to make up for losses caused by halvening. Because reasons.

I do not think it would grow over night, I think that the price will increase over time though, but that is the bet that I am making for myself of course. To answer your question, I am planning to expand, however this very much depends both on the price and what equipment will be available to me as a small independent miner in the near future. Deciding when to expand or contract as a miner can depend on many variables which are hard to predict, mining is a risky business I will not deny that, fortunately I have done well with my operation so far.

The halving will be a great shock to many miners I am sure however mining is a self balancing economy, I do not think it is something we should be overly concerned about in terms of the design chooses we make, unless we plan to change these incentive mechanism specifically. We should not care to much about the profitability of mining, miners will sort that out themselves, it is more important to make Bitcoin appealing to the masses, this is what would bring about more profit for the miners ultimately.

[johnyj]

If the blocks become larger it implies that there is increased adoption and use of Bitcoin. A high volume of low fee transactions over the long run would actually pay out more for the miners compared to a high volume of low fee transactions. The idea that if we increase the blocksize over time as the technology allows as it improves would lead to the network collapsing is not supported by the facts.

If we had a sixty four megabyte blocksize limit for instance with the same fees per transaction payed out today it would already exceed the present block reward. It is not impossible to have blocks this large, in a decade from now it might even seem trivial. It would even take BIP101 eight years to reach this point, and the newly proposed Bitcoin Classic more then twelve years. Most of the other blocksize limit increase proposals are even more conservative then this, which is fine. My point being is that a high volume of low value transactions can pay for the networks security and this would not lead to the network collapsing as you claim, especially as the limit is slowly increased as our technology improves.

As I explained HERE, as long as the blocks are not full, the fee income will always be a small percentage of the block reward, and it shrinks every 4 years. A reduced block reward + fee will make future miners only be able to mine a fraction of a bitcoin per each block (even fiat wise that means lots of money), greatly reduce the mining incentive, especially when most of the coins were mined

25-50 BTC per block fee is a much better incentive, and maybe the best incentive for the miners to continuously expand their operation, since it keeps every miner feels like an early adopter. But that is impossible to reach if we don't have block size limit

[bargainbin]

...
That depends on the price, most likely scenario is that I will have to down clock or turn off my older equipment while I should be able to keep all of the newer equipment running, especially if I buy into the next generation of equipment closer to the next halving.

"That depends on the price"? You don't know that, no more than any other miners (well, at least those not swapping spit with big exchange owners).
I mean what YOU yourself are doing, right now. Are you expanding? Or 'retracting'? Is downclocking what you mean by 'retracting'?

[VeritasSapere]

If the blocks become larger it implies that there is increased adoption and use of Bitcoin. A high volume of low fee transactions over the long run would actually pay out more for the miners compared to a high volume of low fee transactions. The idea that if we increase the blocksize over time as the technology allows as it improves would lead to the network collapsing is not supported by the facts.

If we had a sixty four megabyte blocksize limit for instance with the same fees per transaction payed out today it would already exceed the present block reward. It is not impossible to have blocks this large, in a decade from now it might even seem trivial. It would even take BIP101 eight years to reach this point, and the newly proposed Bitcoin Classic more then twelve years. Most of the other blocksize limit increase proposals are even more conservative then this, which is fine. My point being is that a high volume of low value transactions can pay for the networks security and this would not lead to the network collapsing as you claim, especially as the limit is slowly increased as our technology improves.

As I explained HERE, as long as the blocks are not full, the fee income will always be a small percentage of the block reward, and it shrinks every 4 years. A reduced block reward + fee will make future miners only be able to mine a fraction of a bitcoin per each block (even fiat wise that means lots of money), greatly reduce the mining incentive, especially when most of the coins were mined

25-50 BTC per block fee is a much better incentive, and maybe the best incentive for the miners to continuously expand their operation, since it keeps every miner feels like an early adopter. But that is impossible to reach if we don't have block size limit

I think that you are wrong in this conception, It has been shown that we can have a fee market without a blocksize limit.

https://scalingbitcoin.org/papers/feemarket.pdf
http://www.bitcoinunlimited.info/1txn

[Fatman3001]

@bargainbinlambie Any attack will be clear for all to see. The value of what's stolen will be destroyed.

So what's the plan here exactly? Was the block reward intended to just bootstrap the network? Fees are supposed to suddently up and kick everybody in the face? That seems odd.  

Bootstrap the network and distribute coins. For there to be fees there has to be users. For there to be users Bitcoin needs to be useful. Right now it's useful for speculation. Sort of hard for the network to make money from fees when this is the case. So basically, the people who's supposed to pay the fees haven't arrived yet.

Oh dear. 

We need this guy to repackage it and talk about it in a slow and intense way in a charcoal shirt against a white backdrop.

[VeritasSapere]

...
That depends on the price, most likely scenario is that I will have to down clock or turn off my older equipment while I should be able to keep all of the newer equipment running, especially if I buy into the next generation of equipment closer to the next halving.

"That depends on the price"? You don't know that, no more than any other miners (well, at least those not swapping spit with big exchange owners).
I mean what YOU yourself are doing, right now. Are you expanding? Or 'retracting'? Is downclocking what you mean by 'retracting'?

It is true that I can not know the future price or the difficulty, this is part of the risk of mining. I am holding so I am not retracting or expanding. I do not think the S7 is such a great buy, so I am holding and waiting to see if a better miner is put onto the market. If it is I will most likely buy that as soon as it is released. Otherwise I will continue to hold until the price goes up or like I said better and more competitive miners come onto the market. I am presently running the last generation of equipment, mostly S5's and SP31's.

[bargainbin]

I am presently running the last generation of equipment, mostly S5's and SP31's.

So you're currently not scaling up? How much can the difficulty rise (in %) before you're mining at a loss (power/misc costs only, not talking about 'ROI' on gear)?

[BlindMayorBitcorn]

@bargainbinlambie Any attack will be clear for all to see. The value of what's stolen will be destroyed.

So what's the plan here exactly? Was the block reward intended to just bootstrap the network? Fees are supposed to suddently up and kick everybody in the face? That seems odd.  

Bootstrap the network and distribute coins. For there to be fees there has to be users. For there to be users Bitcoin needs to be useful. Right now it's useful for speculation. Sort of hard for the network to make money from fees when this is the case. So basically, the people who's supposed to pay the fees haven't arrived yet.

Oh dear. 

We need this guy to repackage it and talk about it in a slow and intense way in a charcoal shirt against a white backdrop.

I guess I just assumed victims of ransomware attacks would be enough?

[johnyj]

If the blocks become larger it implies that there is increased adoption and use of Bitcoin. A high volume of low fee transactions over the long run would actually pay out more for the miners compared to a high volume of low fee transactions. The idea that if we increase the blocksize over time as the technology allows as it improves would lead to the network collapsing is not supported by the facts.

If we had a sixty four megabyte blocksize limit for instance with the same fees per transaction payed out today it would already exceed the present block reward. It is not impossible to have blocks this large, in a decade from now it might even seem trivial. It would even take BIP101 eight years to reach this point, and the newly proposed Bitcoin Classic more then twelve years. Most of the other blocksize limit increase proposals are even more conservative then this, which is fine. My point being is that a high volume of low value transactions can pay for the networks security and this would not lead to the network collapsing as you claim, especially as the limit is slowly increased as our technology improves.

As I explained HERE, as long as the blocks are not full, the fee income will always be a small percentage of the block reward, and it shrinks every 4 years. A reduced block reward + fee will make future miners only be able to mine a fraction of a bitcoin per each block (even fiat wise that means lots of money), greatly reduce the mining incentive, especially when most of the coins were mined

25-50 BTC per block fee is a much better incentive, and maybe the best incentive for the miners to continuously expand their operation, since it keeps every miner feels like an early adopter. But that is impossible to reach if we don't have block size limit

I think that you are wrong in this conception, It has been shown that we can have a fee market without a blocksize limit.

https://scalingbitcoin.org/papers/feemarket.pdf
http://www.bitcoinunlimited.info/1txn

Peter_R's paper made the same mistake as mainstream economists that they tried to use a simple formula to describe the complex real world that have millions of different actors, thus lost focus on the most important aspects. The supply and demand curve in his paper are all different for different miners since their cost structure are different

If there is no block size limit, when facing a rising orphan rate (e.g. large number of transactions), a miner's best approach is not to raise the fee, because that will make his node receive less and less transactions in a free block relay market, he would just move to large data centers to benefit from increased performance, thus he can use a low fee to attract more transactions, and this is exactly the centralization we don't want to see

[VeritasSapere]

I am presently running the last generation of equipment, mostly S5's and SP31's.

So you're currently not scaling up? How much can the difficulty rise (in %) before you're mining at a loss (power/misc costs only, not talking about 'ROI' on gear)?

The difficulty would need to double before I would have to start down clocking my miners at the present price. I want to scale up, though it is a strategic choice however, everything considered deciding to skip a generation of miners does not mean I have stopped scaling up. It does not always make sense to buy every new miner on the market. Much of the challenge of being a profitable miner is knowing when to buy equipment and when not to buy equipment. For a long time Antminer did not have any competition for their latest miner, this is why I suspect they are charging much more then it actually costs for them to make the unit, I was hoping that the increased price would bring about more competition in asic manufacturing and therefore bring about more favorable products. Saving my Bitcoins to buy into the next generation, still thinking it is a smart move, if price skyrockets then it was the wrong move but that can always be the case in retrospect, everything considered I think that I am doing the right thing. My mining operation is thriving and I expect it to continue to thrive, as long as Bitcoin does as well.

[BlindMayorBitcorn]

So basically we need all sorts of users doing all sorts of things. As many as possible. I'm beginning to see.

[VeritasSapere]

If the blocks become larger it implies that there is increased adoption and use of Bitcoin. A high volume of low fee transactions over the long run would actually pay out more for the miners compared to a high volume of low fee transactions. The idea that if we increase the blocksize over time as the technology allows as it improves would lead to the network collapsing is not supported by the facts.

If we had a sixty four megabyte blocksize limit for instance with the same fees per transaction payed out today it would already exceed the present block reward. It is not impossible to have blocks this large, in a decade from now it might even seem trivial. It would even take BIP101 eight years to reach this point, and the newly proposed Bitcoin Classic more then twelve years. Most of the other blocksize limit increase proposals are even more conservative then this, which is fine. My point being is that a high volume of low value transactions can pay for the networks security and this would not lead to the network collapsing as you claim, especially as the limit is slowly increased as our technology improves.

As I explained HERE, as long as the blocks are not full, the fee income will always be a small percentage of the block reward, and it shrinks every 4 years. A reduced block reward + fee will make future miners only be able to mine a fraction of a bitcoin per each block (even fiat wise that means lots of money), greatly reduce the mining incentive, especially when most of the coins were mined

25-50 BTC per block fee is a much better incentive, and maybe the best incentive for the miners to continuously expand their operation, since it keeps every miner feels like an early adopter. But that is impossible to reach if we don't have block size limit

I think that you are wrong in this conception, It has been shown that we can have a fee market without a blocksize limit.

https://scalingbitcoin.org/papers/feemarket.pdf
http://www.bitcoinunlimited.info/1txn

Peter_R's paper made the same mistake as mainstream economists that they tried to use a simple formula to describe the complex real world that have millions of different actors, thus lost focus on the most important aspects. The supply and demand curve in his paper are all different for different miners since their cost structure are different

If there is no block size limit, when facing a rising orphan rate (e.g. large number of transactions), a miner's best approach is not to raise the fee, because that will make his node receive less and less transactions in a free block relay market, he would just move to large data centers to benefit from increased performance, and this is exactly the centralization we don't want to see

Mining nodes are all already in data centres. We are already far past this point, so I would not consider that to be a good reason not to increase the blocksize. Miners can not "raise the fee" they simply just choose what transactions to include and not to include, collectively this creates a free market for fees. With an arbitrarily small block size limit it has more in common with a centrally planned economy.