Bitcoin Mining Cartel

[bonker]

Comrades, the current high difficulty and block chain split have heaped an unbearable burden upon the shoulders of the mining proletariat.

I propose the formation of a mining cartel of the main pools and the collectively lowering of hash rate to an agreed maximum.

This would:

1) Lower difficulty
2) Drive the price of Bitcoin up

While no one pool could be forced to restrict hash rate, transparency would expose any cheaters.

[lassdas]

Not sure what blockchain split you're talking about,
but what would a lower difficulty be good for? It just makes it easier to "51%-attack" the network, which isn't a good thing.
And why would a lower difficulty drive the price of BTC up?

A high difficulty is a good thing, the higher, the better.

[bonker]

Not sure what blockchain split you're talking about,
but what would a lower difficulty be good for? It just makes it easier to "51%-attack" the network, which isn't a good thing.
And why would a lower difficulty drive the price of BTC up?

A high difficulty is a good thing, the higher, the better.

Reward split I meant, sorry.

Lower difficulty =  more mining reward per Joule

Lower difficulty wouldn't drive price up, but restricted bitcoin generation would, by the law of supply and demand.

Just think OPEC for bitcoin. It's achievable and in the miner's best interest

[Fiyasko]

You want all the pools to get togeather, Become centralised, And Cap the growth of bitcoin to artificially boost the price?

Do you not understand the concept for bitcoins? Do you not realise why they were created?
Your on my ignore list because what your stating is

"lets turn the bitcoin free market into communistic currency control"

[bonker]

You want all the pools to get togeather, Become centralised, And Cap the growth of bitcoin to artificially boost the price?

Do you not understand the concept for bitcoins? Do you not realise why they were created?
Your on my ignore list because what your stating is

"lets turn the bitcoin free market into communistic currency control"

Ignore lists... what a stupid idea eh? Just bury your head in the sand.

Bitcoin is esentially still a toy and you can choose to ignore the cartel idea as a matter of principle.

But if the world were run by men of principle, then the present fiat system would be just fine.

As it stands, Bitcoin can and will be subverted by the cartel system, as far as I can tell.

[niko]

Comrades, the current high difficulty and block chain split have heaped an unbearable burden upon the shoulders of the mining proletariat.

I propose the formation of a mining cartel of the main pools and the collectively lowering of hash rate to an agreed maximum.

This would:

1) Lower difficulty
2) Drive the price of Bitcoin up

While no one pool could be forced to restrict hash rate, transparency would expose any cheaters.

Let's go a step further, and rid of mining altogether. We could simply announce transactions here in the forum, or in densely populated areas we can just yell from balconies. Transparency would expose any cheaters.

[bonker]

2) Drive the price of Bitcoin up

Why would a reduction in global network hash rate increase the exchange rate?

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

[bonker]

Comrades, the current high difficulty and block chain split have heaped an unbearable burden upon the shoulders of the mining proletariat.

I propose the formation of a mining cartel of the main pools and the collectively lowering of hash rate to an agreed maximum.

This would:

1) Lower difficulty
2) Drive the price of Bitcoin up

While no one pool could be forced to restrict hash rate, transparency would expose any cheaters.

Let's go a step further, and rid of mining altogether. We could simply announce transactions here in the forum, or in densely populated areas we can just yell from balconies. Transparency would expose any cheaters.

An excellent point well made!

[crazyates]

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

If a portion of the network agrees to this, and decides to stop mining for 2.4 hours a day, the difficulty at the end of 2 weeks will not go down by 10%. All that will happen is the difficulty will go down 1%, and you just lost 10% of your earnings while everyone else lost 0%. Does that make it worth it? Hell no.

This idea was tossed about years ago, where they were wondering if a large farm could be more profitable by mining for 2 weeks, and then stopping for 2 weeks. If > 10% of the network shut itself off for one whole diff recalc period, and turned itself on when the difficulty went down by 10%, would the next 2 weeks be more profitable? Yes, those 2 weeks would be profitable, but it would not compensate for the 2 weeks of ZERO income. Over the 4 week period, you would lose out by 45%.

TL:DR
Trying to limit your hashrate to artificially lower the difficulty only hurts you and you're earnings, while everyone else mining 24/7 profits.

[Nachtwind]

2) Drive the price of Bitcoin up

Why would a reduction in global network hash rate increase the exchange rate?

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

Unfortunately supply/demand dont work for a mostly traded currenty. Its not like a large fraction of whats traded is being mined anymore per day anyway..

[bonker]

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

You're an idiot. Plain and simple. If a portion of the network agrees to this, and decides to stop mining for 2.4 hours a day, the difficulty at the end of 2 weeks will not go down by 10%. All that will happen is the difficulty will go down 1%, and you just lost 10% of your earnings while everyone else lost 0%. Does that make it worth it? Hell no.

This idea was tossed about years ago, where they were wondering if a large farm could be more profitable by mining for 2 weeks, and then stopping for 2 weeks. If > 10% of the network shut itself off for one whole diff recalc period, and turned itself on when the difficulty went down by 10%, would the next 2 weeks be more profitable? Yes, those 2 weeks would be profitable, but it would not compensate for the 2 weeks of ZERO income. Over the 4 week period, you would lose out by 45%.

TL:DR
Trying to limit your hashrate to artificially lower the difficulty only hurts you and you're earnings, while everyone else mining 24/7 profits.

That was a rather unnecessary insult I'm quite upset.

Though I understand your arguement, the key term is *consortium*. If the big pools or perhaps the ASIC manufacturers colluded  - consisting of say 90% total hashing power - then it can be very profitable for them.

It's a case of a ASIC manufacturers and a few pool heads sitting in a room and stating the obvious really.

[lassdas]

Lower difficulty wouldn't drive price up, but restricted bitcoin generation would, by the law of supply and demand.

And why do you think a lower difficulty would restrict bitcoin generation?
When Difficulty was around 8 when i started mining (yeah, i'm serious, it was 8!), the network created 1 block in ~10minutes,
today the difficulty is around 3million and guess what...the network still creates 1 block in ~10minutes.

The only thing that actually restricted bitcoin generation was the reward halving.

[DiCE1904]

Comrades, the current high difficulty and block chain split have heaped an unbearable burden upon the shoulders of the mining proletariat.

I propose the formation of a mining cartel of the main pools and the collectively lowering of hash rate to an agreed maximum.

This would:

1) Lower difficulty
2) Drive the price of Bitcoin up

While no one pool could be forced to restrict hash rate, transparency would expose any cheaters.

Let's go a step further, and rid of mining altogether. We could simply announce transactions here in the forum, or in densely populated areas we can just yell from balconies. Transparency would expose any cheaters.

ROFL

[bonker]

Lower difficulty wouldn't drive price up, but restricted bitcoin generation would, by the law of supply and demand.

And why do you think a lower difficulty would restrict bitcoin generation?
When Difficulty was around 8 when i started mining (yeah, i'm serious, it was 8!), the network created 1 block in ~10minutes,
today the difficulty is around 3million and guess what...the network still creates 1 block in ~10minutes.

The only thing that actually restricted bitcoin generation was the reward halving.

You have misunderstood. Lower difficulty would result from restricted bitcoin generation (by agreement of the cartel), not the other way around.

More importantly, prices should also rise by restricting bitcoin generation. This is the real point.

These three variable systems are quite tricky to understand.

[lassdas]

Well, ok then.
But what i still don't understand is how you would accomplish that restriction.

As you know, the network handles the generation by itself, by lowering or raising the difficulty to meet the ~10minute-target, there's no way to change that by any mining-cartel, pool-owner or anyone else. It would require a protocol change and most probably lead to a fork, or IOW another currency != bitcoin.

[Dalkore]

2) Drive the price of Bitcoin up

Why would a reduction in global network hash rate increase the exchange rate?

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

Price would actually stay the same when you restrict the supply at current levels and demand stays the same.

[bonker]

2) Drive the price of Bitcoin up

Why would a reduction in global network hash rate increase the exchange rate?

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

Price would actually stay the same when you restrict the supply at current levels and demand stays the same.

Read it again, I wrote: "growth in demand stays the same"

[Raize]

Trying to limit your hashrate to artificially lower the difficulty only hurts you and you're earnings, while everyone else mining 24/7 profits.

If Bitcoin became commonplace, we'd have a government run by a mining lobby using exactly this fact as an excuse as to why new artificial limits must be imposed. Cartels are stupid. It's already bad enough that we have pools.

[lassdas]

Read it again, I wrote: "growth in demand stays the same"

Read it again: you can not restrict the supply.
A protocol change like that would just create another alternate cryptocurrency. It wouldn't be bitcoin anymore.
You are of course free to create a new cryptocurrency, but you'll have a hard time convincing people to use it.

[Jack1Rip1BurnIt]

Sorry I have to jump in but this just sounds stupid. Try getting a bunch of people who just spent millions on asic mining hardware to not run them 24/7 is an incredibly bad idea. Don't we want the network hash rate to be astronomically high? What about increased security? Let it go because it's just not gonna happen.