Mining Centralization Concerns

[RealBitcoin]

I am really concerned about mining centralization, and possible influence of politics over miners, especially shady bribery deals that might go on with big miners or mining pool owners (like the Bitcoin Classic shady stuff practices or this one MIT Totalitarian Takeover)

Problems:

• Most miners, mining pools are from 1 political zone: China, which exposes the bitcoin network to political centralization risks
• The upcoming halving (until the price doesnt double) will temporarly or even longer, knock out many smaller miners who already were in losses, and can centralize bitcoin even further amongst mining pools. We must be careful in those times, because bitcoin is the most vulnerable in the 1 month after the halving. We must watch out for totalitarian takeovers of bitcoin in this timeframe
• Miner bribery becomes more likely as the profits of big miners shrink, and if they are centralized, the systemic risk becomes larger
• If the top 4 mining pools do a shady backdoor meeting, and allow by consensus a malicious or totalitarian BIP to be passed, then we are screwed!

Solutions:

• If the bitcoin price increases, more miners will join us due to greed and existing smaller miners will have enough profits to uppgrade, thus mining decentralizes
• Current mining equipment has reached the cutting edge of technology, the 16 nanometer chips are currently the best, and mining efficiency increase will probably slow down to a logarithmic curve now. This means that big miners wont have huge advantage anymore over little miners, by uppgrading to new stuff. Also people who buy the latest mining equipment, will suffer less deflation, and if a newer one comes out they can sell them at a better price and not lose that much money. This will keep more money in pockets of smaller miners, and they can uppgrade now more efficiently with less losses. Also miners that buy mining equipment now, can use that equipment longer before the difficulty increases thus making faster ROI and more profits so they can expand faster.
• The upcoming halving should double the price, but it can increase it even more in the longer term, making it easier for miners to mine, and decentralize it
• We must have a very good alert system and comunication system in case of a malicious hardfork happens. Especially a pre-planned one, that was due to bribery. Totalitarian takeovers of bitcoin should be fight against by the entire community!
• We must incentivize bitcoin mining again, and raise awareness to it, especially in countries where the electricity is cheap by default. People who live in cheap electricity countries must participate in bitcoin mining for the sake of bitcoin's future!
• Anyone who cares about bitcoin, should support it now, and should spread the word about it! We should stop hoping for bitcoin to succeed and start working on bitcoin's success!
• 21 Inc mining chips to be integrated in every electronic gadget, so that the masses can mine bitcoin in idle mode, decentralizing mining even more!
  https://www.cryptocoinsnews.com/breaking-21-inc-releases-new-bitcoin-mining-chip-smartphones/
• Bitcoin mining chips integrated in heating systems. That way the extra heat will warm up the house in cold climates. It can add tons of mining power to bitcoin once it becomes trendy in cold areas.

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[matt4054]

Unfortunately most of your solutions appear like wishful thinking to me

[pedrog]

Unfortunately most of your solutions appear like wishful thinking to me

Not just the solutions but also the problems...

[RealBitcoin]

Unfortunately most of your solutions appear like wishful thinking to me

Not just the solutions but also the problems...

Elaborate that? I think my concerns are pretty well founded and not just fantasies.

These bad things can happen anytime like a black swan even, if the community is not prepared for them, or doest nothing to prevent them before they could happen.

[gentlemand]

Ever spiraling difficulty is surely the major factor in centralisation. The makers and operators of the best machines are going to hoard them. The richer they get the further ahead they pull. Nothing's going to change now I don't think. Satoshi missed a trick there.

[franky1]

the only pools that will make a profit are those that have manufacturing linked to their business.

no matter how much you try to tell people in the west to start mining. they are going to be buying the rigs from the east at a huge markup. so the west will NEVER be as competitive as the east.

its already happening. for every rig sold for $1000. has an actual cost price of under $200. so for every rig someone in the west buys, they are literally giving 4 other rigs to the competition in the east.(and they 'thank you long time' for those free-bies that allow 400% competition advantage)

there is no way to compete unless you are part of the manufacturing of the rigs.

the solution. expand the manufacturing and get more rig manufacturers on the market. which will trickle down as more choice, and more options and also a price war on the rigs. which will result in cheaper rigs to allow for more chance of competition.

EG if there are suddenly 10 manufacturers.. you will see the smart ones drop their price to $400 so that they still get a free rig, but also are still beating the competitors

but if there remains only 2 main mining rig manufacturers, they will continue to overprice the competition and cause less distribution amungst the pools. basically they see no point in dropping the retail price as it hurts them while there remains only a couple big players. after all if your the king and queen why would you lower your price point to let the court-jester have a chance..

but if there are 10 main players. then the smart ones will lower prices to remain on top and grab the business to suffocate the rest

[bitbite111]

A solution is to move to a proof of stake coin. But nobody wants to hear that.

[RealBitcoin]

the solution. expand the manufacturing and get more rig manufacturers on the market. which will trickle down as more choice, and more options and also a price war on the rigs. which will result in cheaper rigs to allow for more chance of competition.

Where is silicon valley folks? All those manufacturing plants...

Dont let them go to waste, they should start producing cheap mining equipment for americans and europeans.

[Kakmakr]

the solution. expand the manufacturing and get more rig manufacturers on the market. which will trickle down as more choice, and more options and also a price war on the rigs. which will result in cheaper rigs to allow for more chance of competition.

Where is silicon valley folks? All those manufacturing plants...

Dont let them go to waste, they should start producing cheap mining equipment for americans and europeans.

The Chinese still have the manufacturing edge over the west with the 16 nanometer chips. It will take time for Silicon valley to pick up the slack and even if they do this, the Chinese will just find ways to do it cheaper. They have much cheaper labor and they are more disciplined.

The technology will stagnate for a while, until something new pops up and then we will rinse and repeat. The only way for the West to dominate, will be to subsidize the electricity to boost investment into Bitcoin mining and this must be cheaper than the Chinese, which will be very difficult. 

[RealBitcoin]

The Chinese still have the manufacturing edge over the west with the 16 nanometer chips. It will take time for Silicon valley to pick up the slack and even if they do this, the Chinese will just find ways to do it cheaper. They have much cheaper labor and they are more disciplined.

The technology will stagnate for a while, until something new pops up and then we will rinse and repeat. The only way for the West to dominate, will be to subsidize the electricity to boost investment into Bitcoin mining and this must be cheaper than the Chinese, which will be very difficult. 

Why dont they buy the blueprints?

I guess it would be cheaper to buy the blueprints from them and design an equally powerful or even cheaper mining equipment in silicon valley.

Technology is already stagnating, so acquiring the blueprints now is the best investment now for the manufacturers.

[franky1]

Why dont they buy the blueprints?

I guess it would be cheaper to buy the blueprints from them and design an equally powerful or even cheaper mining equipment in silicon valley.

Technology is already stagnating, so acquiring the blueprints now is the best investment now for the manufacturers.

1. even knowing how to make it does not suddenly or magically become cheaper simply because silicon valley is involved.
2. buying blueprints is meaningless. once you spent millions of dollars and months of negotiations the blue prints are already out of date because a new design has already started production by the competitor.
3. no matter where you get the talent. (bitmain already has engineers from san fransisco) the physical manufacturing wont be cheaper done in USA
4. it does not matter where in the world the headquarters is. the manufacturing has to be done somewhere with low labour cost, low facility cost

the solution is to follow antpool(bitmains) business plan.

have talent from san fran. have manufacturing in [cheap location], run the rigs in 1 hour delivery distance of manufacturing factory but have the main pool server in any country you please.

i wont suggest african, indian or any of the 'stan' countries based on the heat(adding costs to keep rigs cool).
looking at a non middle east country to set up. i would say the Ukraine or russia has potential. compared to america or the UK, based on labour and facility costs.
ukraine has cheaper labour($0.30c /h) and also cheap electricity($0.02c-$0.06c /kwh). aswell as an acceptable climate for electronics.

though that was just my 2 minute browsing of stats, im sure there is another eastern europe/north europe country that can beat that

[RealBitcoin]

1. even knowing how to make it does not suddenly or magically become cheaper simply because silicon valley is involved.
2. buying blueprints is meaningless. once you spent millions of dollars and months of negotiations the blue prints are already out of date because a new design has already started production by the competitor.
3. no matter where you get the talent. (bitmain already has engineers from san fransisco) the physical manufacturing wont be cheaper done in USA
4. it does not matter where in the world the headquarters is. the manufacturing has to be done somewhere with low labour cost, low facility cost

the solution is to follow antpool(bitmains) business plan.

have talent from san fran. have manufacturing in [cheap location], run the rigs in 1 hour delivery distance of manufacturing factory but have the main pool server in any country you please.

i wont suggest african, indian or any of the 'stan' countries based on the heat(adding costs to keep rigs cool).
looking at a non middle east country to set up. i would say the Ukraine or russia has potential. compared to america or the UK, based on labour and facility costs.
ukraine has cheaper labour($0.30c /h) and also cheap electricity($0.02c-$0.06c /kwh). aswell as an acceptable climate for electronics.

though that was just my 2 minute browsing of stats, im sure there is another eastern europe/north europe country that can beat that

Yea but I`m talking about comercially available mining equipment.

Its useless if they develop the miners and only use it themselves, or sell it for a 8x profit.

That wont help bitcoin become decentralized.

So we need more producers to flood the market to make the cost of those equipments ultra cheap.

[franky1]

1. even knowing how to make it does not suddenly or magically become cheaper simply because silicon valley is involved.
2. buying blueprints is meaningless. once you spent millions of dollars and months of negotiations the blue prints are already out of date because a new design has already started production by the competitor.
3. no matter where you get the talent. (bitmain already has engineers from san fransisco) the physical manufacturing wont be cheaper done in USA
4. it does not matter where in the world the headquarters is. the manufacturing has to be done somewhere with low labour cost, low facility cost

the solution is to follow antpool(bitmains) business plan.

have talent from san fran. have manufacturing in [cheap location], run the rigs in 1 hour delivery distance of manufacturing factory but have the main pool server in any country you please.

i wont suggest african, indian or any of the 'stan' countries based on the heat(adding costs to keep rigs cool).
looking at a non middle east country to set up. i would say the Ukraine or russia has potential. compared to america or the UK, based on labour and facility costs.
ukraine has cheaper labour($0.30c /h) and also cheap electricity($0.02c-$0.06c /kwh). aswell as an acceptable climate for electronics.

though that was just my 2 minute browsing of stats, im sure there is another eastern europe/north europe country that can beat that

Yea but I`m talking about comercially available mining equipment.

Its useless if they develop the miners and only use it themselves, or sell it for a 8x profit.

That wont help bitcoin become decentralized.

So we need more producers to flood the market to make the cost of those equipments ultra cheap.

like i said.. if someone was to set up another manufacturing company in a cheap eastern euro country (to compete) they can sell rigs cheaper. and start a price war to get cheaper rigs from both china and europe.

but here is the thing. no matter what delusions that a westerner has, they will never be able to buy a rig and run it in their basement and be competitive vs the east.
manufacturers will always be far ahead of the game in many ways. so the concentration should be on an increase of manufacturers, which results in a ripple effect to make consumers slightly better off (but never better off then the manufacturing company)

even if a manufacturer was to sell a rig AT COST. (eg $200)
the delivery to usa would be $30 (15% less competitive before it even arrives)
electricity is double so profit vs cost takes another cut (china has 70% profitability. 30% cost, meaning usa is 40% profit 60% cost)

and then there is the delivery time itself, usually 2 weeks.

so imagine 1 rig can make 0.1btc a week.
week one(china): 0.1btc(0.07btc profit)
week one(USA): 0btc
week two(china): 0.1btc(0.07btc profit)
week two(USA): 0btc
week three(china): 0.09btc(0.063btc profit) - (10% drop of reward due to difficulty jump)
week three(USA): 0.09btc(0.036btc profit)
week four(china): 0.09btc(0.063btc profit)
week four(USA): 0.09btc(0.036btc profit)

so in just 1 month even selling rigs at cost price. china would earn 0.266btc
so in just 1 month even selling rigs at cost price. USA would earn 0.076btc

meaning china has already got over $100 for their $200 rig. usa only has $30 for their $230 purchase

[RealBitcoin]

like i said.. if someone was to set up another manufacturing company in a cheap eastern euro country (to compete) they can sell rigs cheaper. and start a price war to get cheaper rigs from both china and europe.

1) People should setup their own solar power farms
2) Perhaps they should manufacture the parts and assemble it at the destination and then the manufacturer wont have a huge profit margin
3) Yes the more manufacturers the bigger supply and the lower price

4) What about the 21 INC mining chips, they said that it can be integrated in any appliance or electronic item in the future?
https://www.cryptocoinsnews.com/breaking-21-inc-releases-new-bitcoin-mining-chip-smartphones/

For example Iphone 8 to mine bitcoins directly from the phone.

[franky1]

like i said.. if someone was to set up another manufacturing company in a cheap eastern euro country (to compete) they can sell rigs cheaper. and start a price war to get cheaper rigs from both china and europe.

1) People should setup their own solar power farms
2) Perhaps they should manufacture the parts and assemble it at the destination and then the manufacturer wont have a huge profit margin
3) Yes the more manufacturers the bigger supply and the lower price

4) What about the 21 INC mining chips, they said that it can be integrated in any appliance or electronic item in the future?

For example Iphone 8 will mine bitcoins directly from the phone.

1. solar power in USA (buying equipment, install etc) is not cheaper.. people only break even after several years. by that time they need to repair and maintain the panels.

2. having consumers assemble it in their basement wont work.. (i presume thats what u meant). if you mean running the rigs at or near the manufacturing facility.. then thats already happening and why manufacturers line bitmain are so profitable.

3. obviously.

[spartacusrex]

Trying to have this very discussion in the Technical forum..

https://bitcointalk.org/index.php?topic=1430548.0

I think that trying to compete as a standard miner, with the current miners, isn't going to work..

An efficient bitcoin mining chip, installed in every Android phone, coupled with seamless pool integration so that it all 'just works', may be the only way to overcome the current situation..

A billion mining chips controlled by the users vs the current miners would be a good match up.

.. we'd need a billion users though.. 

Or would a million be enough ? Not up on chip speeds, can anyone enlighten ?

[franky1]

Trying to have this very discussion in the Technical forum..

https://bitcointalk.org/index.php?topic=1430548.0

I think that trying to compete as a standard miner, with the current miners, isn't going to work..

An efficient bitcoin mining chip, installed in every Android phone, coupled with seamless pool integration so that it all 'just works', may be the only way to overcome the current situation..

A billion mining chips controlled by the users vs the current miners would be a good match up.

.. we'd need a billion users though..  

Or would a million be enough ? Not up on chip speeds, can anyone enlighten ?

replying to you and continuing point 4 of 'realbitcoins' post

4. the heat coming off a chip will burn out the batter of a iphone/android.. if not ur hand first. putting chips into any piece of home appliance is meaningless.. if there are only 20 pools. it does not matter of there are a million users.. because a manufacturer will probably have more hash power alone compared to the 50k people per pool

we are no longer in the solo mining era where competition is measured by individual users/equipment. its done by the combined power around the world linked to a particular pool server. (emphasis on the pool server being the main thing)

even if we had Apple pool where all apple phones connect to an apple pool. we had a samsung pool where all smart Tv's connected to a samsung pool. and 20 other brand pools.. the manufacturer of the chip itself will make rigs that are 100x more powerful then a iphone/40"tv while being at the same price point of a tv/phone.
basically if an home appliance costs $200 with 1x 40ghash chip inside. someone else would spend $200 to get a rig with 4thash of power.

its also worth noting that asic chips have NO HARDDRIVE. they do not store the blockchain. they just connect to a server and send hashes.. so it doesnt really matter if samsung sell 1 million TV's across america with asic chips inside.. a asic manufacturer can sell 10,000 asics. and out compete samsung.

mining rig distribution is meaningless if they are all connecting to just a few pool servers.

[RealBitcoin]

1. solar power in USA (buying equipment, install etc) is not cheaper.. people only break even after several years. by that time they need to repair and maintain the panels.

2. having consumers assemble it in their basement wont work.. (i presume thats what u meant). if you mean running the rigs at or near the manufacturing facility.. then thats already happening and why manufacturers line bitmain are so profitable.

3. obviously.

4. the heat coming off a chip will burn out the batter of a iphone.. if not ur hand. putting chips into any piece of home appliance is meaningless.. if there are only 20 pools. it does not matter of there are a million users.. because a manufacturer will probably have more hash power alone compared to the 50k people per pool

1) Damn those pesky regulations and sales tax or whatnot taxes are probably in the way... Anyway new technology will come out and will make everything more efficient.

2) Not necessarly that way, but what I mean is that the manufacturer to sell the parts to assembly plants. The manufactoring factories have always the lowers profit margin so, an extra middleman here is actually beneficial. Then if you worry about assembly plants being greedy, then just have many of them. It's easier to assemble it from parts than to make the parts, and it's the assembler that would be the greedy one. So just have more assemblers than manufacturers and the price should come down. An extra middleman in this case is probably good.

Otherwise the regulations and taxes are the biggest issue. International manufacturing and export has tens of thousands of regulations that make those items expensive...

4) Doesnt have to run at full capacity. Even if they just mine a few satoshis/day. It's idle and i bet that many people would use it, just like many people use PTC sites for 1 cent payments... People love to work for nothing, because they are addicted to the new money, not the size of it.
So an automatic bitcoin generator that would generate them 1 satoshi/minute would make them addicted to it

[franky1]

2) Not necessarly that way, but what I mean is that the manufacturer to sell the parts to assembly plants. The manufactoring factories have always the lowers profit margin so, an extra middleman here is actually beneficial. Then if you worry about assembly plants being greedy, then just have many of them. It's easier to assemble it from parts than to make the parts, and it's the assembler that would be the greedy one. So just have more assemblers than manufacturers and the price should come down. An extra middleman in this case is probably good.

that worked out so well for Butterfly labs.. 2 years on and they couldnt even release an end product.

its actually cheaper to have the manufacturing and mining facility right next door to each other (1 hour delivery at most). instead of making the chips in china/europe shipping them to america and then have someone at $9 an hour making the rigs and then another group of guys at $9 an hour supervising the mining(fully produced running asics) facility.
sorry but america wont EVER be a good production centre for asics

4) Doesnt have to run at full capacity. Even if they just mine a few satoshis/day. It's idle and i bet that many people would use it, just like many people use PTC sites for 1 cent payments... People love to work for nothing, because they are addicted to the new money, not the size of it.
So an automatic bitcoin generator that would generate them 1 satoshi/minute would make them addicted to it

ok lets imagine we had 1million phones with a chip in them. 1 million smart Tv's,, blah blah blah.. 20 home appliences with 20 pools.

thats 20 million devices. or 720sat a day if evenly rewarded.

knowing that the 20 pools are evenly distributed as 1million x 40ghash chips per pool (the dream your thinking)
an asic manufacturer just needs to make 10,001 4thash rigs and bam.. they have more power then the other pools.

right now antpool has 88,000 4thash rigs running

so lets say it was 10million devices per brand. the consumer only gets 72sats. and an asic manufacturer only needs to make 100,001 asics to outcompete.

knowing that the hashrate moves up by 10% every few weeks. antpool will have that hashpower in a month.. yet how long do you think it would take a phone manufacturer to not only design a phone with a chip in it, but also to get it on the market.

do you really think that iphone can saturate the bitcoin market with lets say 100 million phones in the next couple years?(giving people 7sat a day)
or do you think that antpool will get to a couple exohash before that..

[RealBitcoin]

2) Not necessarly that way, but what I mean is that the manufacturer to sell the parts to assembly plants. The manufactoring factories have always the lowers profit margin so, an extra middleman here is actually beneficial. Then if you worry about assembly plants being greedy, then just have many of them. It's easier to assemble it from parts than to make the parts, and it's the assembler that would be the greedy one. So just have more assemblers than manufacturers and the price should come down. An extra middleman in this case is probably good.

that worked out so well for Butterfly labs.. 2 years on and they couldnt even release an end product.

its actually cheaper to have the manufacturing and mining facility right next door to each other (1 hour delivery at most). instead of making the chips in china/europe shipping them to america and then have someone at $9 an hour making the rigs and then another group of guys at $9 an hour supervising the mining(fully produced running asics) facility.
sorry but america wont EVER be a good production centre for asics

No because then they just mop up the profits, because they create everything, they will entitle themselves to 8x profit margin as no competitor exists that can compete with the complexity of their business.

If they just make the parts, then the profit margin normalizes to 10-30%.

And the assembler just charges based on supply and demand. Then many hobbyists can just turn this into a business, they buy the parts at factory rates, and assemble it in a garage and sell the mining equipment on e-bay or openbazaar

So the overall retail price then will decrease massively as the manufacturing process will be decentralized as well.

[RealBitcoin]

replying to you and continuing point 4 of 'realbitcoins' post

4. the heat coming off a chip will burn out the batter of a iphone/android.. if not ur hand first. putting chips into any piece of home appliance is meaningless.. if there are only 20 pools. it does not matter of there are a million users.. because a manufacturer will probably have more hash power alone compared to the 50k people per pool

I answered this in the previous post

we are no longer in the solo mining era where competition is measured by individual users/equipment. its done by the combined power around the world linked to a particular pool server. (emphasis on the pool server being the main thing)

Sure but we can do anything to make the process as decentralized as possible.

its also worth noting that asic chips have NO HARDDRIVE.

Indeed this is an issue now. Maybe we need some remote mining BIPs in the future so that miners could mine without being nodes.

Or lightweight mining where miners would only need the past x blocks to validate stuff from.

[chek2fire]

i fell more safe that most of the miners are in china than to be in USA. USA is a very corrupt country with agent organizations like NSA, CIA to act in the shadows and without any democracy permission. Of course China has no democracy but this paramilitary organizations as i say in USA is a danger to freedom.

[RealBitcoin]

i fell more safe that most of the miners are in china than to be in USA. USA is a very corrupt country...

China is communist.

And they have totalitarian internet censorship.

I would not put my money on China.

[franky1]

2) Not necessarly that way, but what I mean is that the manufacturer to sell the parts to assembly plants. The manufactoring factories have always the lowers profit margin so, an extra middleman here is actually beneficial. Then if you worry about assembly plants being greedy, then just have many of them. It's easier to assemble it from parts than to make the parts, and it's the assembler that would be the greedy one. So just have more assemblers than manufacturers and the price should come down. An extra middleman in this case is probably good.

that worked out so well for Butterfly labs.. 2 years on and they couldnt even release an end product.

its actually cheaper to have the manufacturing and mining facility right next door to each other (1 hour delivery at most). instead of making the chips in china/europe shipping them to america and then have someone at $9 an hour making the rigs and then another group of guys at $9 an hour supervising the mining(fully produced running asics) facility.
sorry but america wont EVER be a good production centre for asics

No because then they just mop up the profits, because they create everything, they will entitle themselves to 8x profit margin as no competitor exists that can compete with the complexity of their business.

If they just make the parts, then the profit margin normalizes to 10-30%.

And the assembler just charges based on supply and demand. Then many hobbyists can just turn this into a business, they buy the parts at factory rates, and assemble it in a garage and sell the mining equipment on e-bay or openbazaar

So the overall retail price then will decrease massively as the manufacturing process will be decentralized as well.

i dare you to buy a DIY car 'kit' and build your own car. and sell it.
i guarantee you it wont be cheaper then buying the car from the manufacturer. and i guarantee you the employee's of the manufacturer get it even cheaper again.

the only way to be competitive is if you follow bitmains business plan and do EVERYTHING inhouse. not only will you save on the shipping and labour, but the delay in times of shipping, fabricating and then ultimately selling..

so there is no point making chips in china/europe. ship them to america and some garage geek makes the rigs in america to sell on open bazaar.. it should wont be price or time friendly in regards to mining rewards

[chek2fire]

i fell more safe that most of the miners are in china than to be in USA. USA is a very corrupt country...

China is communist.

And they have totalitarian internet censorship.

I would not put my money on China.

as i say if i have to choose between the "capital-communist-Frankenstein" China and Usa i will definitely choose China. I dont have trust to USA because they have too many organizations that they do whatever they want without any permission from anyone.

[franky1]

i fell more safe that most of the miners are in china than to be in USA. USA is a very corrupt country...

China is communist.

And they have totalitarian internet censorship.

I would not put my money on China.

lol im guessing you watch fox new's interpretation of communism.

[RealBitcoin]

i dare you to buy a DIY car 'kit' and build your own car. and sell it.
i guarantee you it wont be cheaper then buying the car from the manufacturer. and i guarantee you the employee's of the manufacturer get it even cheaper again.

the only way to be competitive is if you follow bitmains business plan and do EVERYTHING inhouse. not only will you save on the shipping and labour, but the delay in times of shipping, fabricating and then ultimately selling..

so there is no point making chips in china/europe. ship them to america and some garage geek makes the rigs in america to sell on open bazaar.. it should wont be price or time friendly in regards to mining rewards

Ok have it your way, the no middleman version is frictionless and should be cheaper, but I tell you that in high-tech manufacturing you wont find a big supply of things.

Aside from Silicon Valley, China and Israel and Japan, there arent many high tech manufacturing countries left, so you can probably count the total manufacturers with your fingers.

Or they really need to convince everyone in the industry to stop making smart phones and start making bitcoin miners, which will be hard

I`m not sure how many idle factories you will find for this.

[Soros Shorts]

The concept of millions of miners mining small amounts at a loss has some merit. I wouldn't mind plugging something into the wall that costs $5/month in electricity and generates $1/month worth of BTC if millions of other people were doing it in order to keep mining distributed. No need for a fancy chip in my phone or car. Devices like the AntRouter but one that can mine on any pool would be ideal.

[chek2fire]

The concept of millions of miners mining small amounts at a loss has some merit. I wouldn't mind plugging something into the wall that costs $5/month in electricity and generates $1/month worth of BTC if millions of other people were doing it in order to keep mining distributed. No need for a fancy chip in my phone or car. Devices like the AntRouter but one that can mine on any pool would be ideal.

i think this is the future of bitcoin mining. The mining era that we have now is near the ending. Imo we have 4 more years with big miining data centers and after that the mining definitely will pass to lot

[franky1]

The concept of millions of miners mining small amounts at a loss has some merit. I wouldn't mind plugging something into the wall that costs $5/month in electricity and generates $1/month worth of BTC if millions of other people were doing it in order to keep mining distributed. No need for a fancy chip in my phone or car. Devices like the AntRouter but one that can mine on any pool would be ideal.

USB block eruptors already exist. yet the issue is not the distribution of the asics. they do not store the blockchain after all... no asic does..

its the POOLS that need distributing.

and this will only happen if there was enough variety of getting asics from different locations at a price that competes against the main players.
otherwise people are just going to contract to an ASIC that is maintained remotely by couple the manufacturing companies (like they do now)

a good way to force it. is to get nodes to ignore a block if it was created by the same pool in the last X amount of blocks.. this would equal the chances of many pools getting a chance and slow down the dominance of just a couple.

getting a rig delivered to your house is not profitable nor helpful. but expanding the choice of pool companies that also manufacture is.
if there was atleast 10 manufacturers of asics that house the rigs for users to contract to remotely, then there are more chances and choices of pools. while letting the whole world have a chance

i know people have dream scenario's of the utopian idea of how mining should be. but that would only ever last 2 months before people start to change back to old ways due to profit. so we might aswell stick to realistic long term case scenarios of expanding the manufacturing and pools. as thats the important part.

individuals with a micro miner embedded in a phone is meaningless for a multitude of practical reasons

[AmDD]

I had this discussion with a friend not long ago and here is my thoughts... This came about when talking about 21INC and Intel being involved in blockchain tech.

There are about 2 billion PCs in the world at the moment. If each motherboard had a single ASIC chip from the AntMiner S7 (25GH/s @ 5 watts) it would equal 50billion GH/s. The entire network is about 1.3 billion GH/s at the moment. 8 watts isnt going to break the bank for any homeowner, or even a large corporation I wouldnt think. The miner could be configured in the BIOS and locked down somehow to help guard against botnets taking over systems or even a physical switch/jumper on the board that when opened would allow changing of the mining address but when closed was impossible to change via software. like old 3.5" floppy drives with a lock switch.

As mentioned above, the biggest issue will be where they mine to. If to a pool then its not as decentralized. Solo would be ideal but with only 25GH/s the chances of hitting a block would be insane and so most people wont bother to keep track of a wallet address and check it so the coins would be mined and lost. You would need some third party way to monitor the address's and notify users of a mined block.
or even handle distributing the coin but there again, thats not the point of solo mining, it might as well be a pool at that point.

Maybe you could incorporate a pool into a router. In todays world, nearly every home with internet access has a router. No one sets up a DNS or DHCP server in their homes but they are there. Why? Because its built into the router. This would mean they would have to add hard drives to routers which would increase cost as well as physical size, however I dont think it would be by too much. All motherboards (or any other ASIC enabled device in the home) would just point to the default gateway as a mining pool for solo mining. Each home becomes its own pool.

[lumeire]

the solution. expand the manufacturing and get more rig manufacturers on the market. which will trickle down as more choice, and more options and also a price war on the rigs. which will result in cheaper rigs to allow for more chance of competition.

Where is silicon valley folks? All those manufacturing plants...

Dont let them go to waste, they should start producing cheap mining equipment for americans and europeans.

Even if you produce cheap mining equipment elsewhere besides China, operating costs such as electricity and manpower would still kill your profits. In all honesty the only situation that can keep mining as decentralized as possible is for the difficulty to remain stable.

[Ultrafinery]

I had this discussion with a friend not long ago and here is my thoughts... This came about when talking about 21INC and Intel being involved in blockchain tech.

There are about 2 billion PCs in the world at the moment. If each motherboard had a single ASIC chip from the AntMiner S7 (25GH/s @ 5 watts) it would equal 50billion GH/s.

Are those boxen running 24/7? Never switched off? And Toto Laptops too?
Constantly connected to the internet?
Why would anyone pay an extra, let's say $25 (because arbitrary numbers are fun)  for a computer, knowing they will "mine" $5?
Is Grandma/Visa/my hospital interested in Bitcoin mining?

The entire network is about 1.3 billion GH/s at the moment. 8 watts isnt going to break the bank for any homeowner, or even a large corporation I wouldnt think.

When I was a kid, I reasoned like that too: "Most people don't even pick up a penny when they drop it, they couldn't care less. If everyone in the world just sent me a penny, it "isnt going to break the bank," but I'd be a millionaire!"

[pedrog]

the solution. expand the manufacturing and get more rig manufacturers on the market. which will trickle down as more choice, and more options and also a price war on the rigs. which will result in cheaper rigs to allow for more chance of competition.

Where is silicon valley folks? All those manufacturing plants...

Dont let them go to waste, they should start producing cheap mining equipment for americans and europeans.

Even if you produce cheap mining equipment elsewhere besides China, operating costs such as electricity and manpower would still kill your profits. In all honesty the only situation that can keep mining as decentralized as possible is for the difficulty to remain stable.

That's not, and should not be, an option.

A possible solution would be other variables gaining importance for mining, not just cheap electricity, for example, if blocks got bigger good Internet connections would be crucial for success when mining and the playing field could be leveled and a bigger percentage of mining would be done outside of China.

[AmDD]

I had this discussion with a friend not long ago and here is my thoughts... This came about when talking about 21INC and Intel being involved in blockchain tech.

There are about 2 billion PCs in the world at the moment. If each motherboard had a single ASIC chip from the AntMiner S7 (25GH/s @ 5 watts) it would equal 50billion GH/s.

Are those boxen running 24/7? Never switched off? And Toto Laptops too?
Constantly connected to the internet?
Why would anyone pay an extra, let's say $25 (because arbitrary numbers are fun)  for a computer, knowing they will "mine" $5?
Is Grandma/Visa/my hospital interested in Bitcoin mining?

Do you pay extra for your computer because it has 2 extra USB ports? or even firewire? No, its so cheap for them to add it that its just added. You dont sell it as a mining device, you sell it as a PC with an extra feature of mining. Ive never once used a firewire device but I have owned lots of systems that have the feature. If its not something you are interested in then you dont set it up. This is the same idea as the 21inc computer. Those who view it as a mining device are missing the point.

The entire network is about 1.3 billion GH/s at the moment. 8 watts isnt going to break the bank for any homeowner, or even a large corporation I wouldnt think.

When I was a kid, I reasoned like that too: "Most people don't even pick up a penny when they drop it, they couldn't care less. If everyone in the world just sent me a penny, it "isnt going to break the bank," but I'd be a millionaire!"

Maybe this could be worded differently. Id be willing to 'donate' $0.50 a month to run the mining chip in order to help secure the network. Those who would not be can simply not configure the miner and it will sit idle.

[pedrog]

I had this discussion with a friend not long ago and here is my thoughts... This came about when talking about 21INC and Intel being involved in blockchain tech.

There are about 2 billion PCs in the world at the moment. If each motherboard had a single ASIC chip from the AntMiner S7 (25GH/s @ 5 watts) it would equal 50billion GH/s.

Are those boxen running 24/7? Never switched off? And Toto Laptops too?
Constantly connected to the internet?
Why would anyone pay an extra, let's say $25 (because arbitrary numbers are fun)  for a computer, knowing they will "mine" $5?
Is Grandma/Visa/my hospital interested in Bitcoin mining?

Do you pay extra for your computer because it has 2 extra USB ports? or even firewire? No, its so cheap for them to add it that its just added. You dont sell it as a mining device, you sell it as a PC with an extra feature of mining. Ive never once used a firewire device but I have owned lots of systems that have the feature. If its not something you are interested in then you dont set it up. This is the same idea as the 21inc computer. Those who view it as a mining device are missing the point.

The entire network is about 1.3 billion GH/s at the moment. 8 watts isnt going to break the bank for any homeowner, or even a large corporation I wouldnt think.

When I was a kid, I reasoned like that too: "Most people don't even pick up a penny when they drop it, they couldn't care less. If everyone in the world just sent me a penny, it "isnt going to break the bank," but I'd be a millionaire!"

Maybe this could be worded differently. Id be willing to 'donate' $0.50 a month to run the mining chip in order to help secure the network. Those who would not be can simply not configure the miner and it will sit idle.

This is uber nonsense, if the bitcoin network can't sustain itself than it has to die, no one should be subsidizing the network, and yes, you bet you're paying those extra USB ports, otherwise they wouldn't be there...

[franky1]

That's not, and should not be, an option.

A possible solution would be other variables gaining importance for mining, not just cheap electricity, for example, if blocks got bigger good Internet connections would be crucial for success when mining and the playing field could be leveled and a bigger percentage of mining would be done outside of China.

1. i agree stablizing the difficulty is bad. the higher the difficuty is the more difficult it is for a bad actor to abuse
2. it does not matter where the ASICS are run from (from the point of view of block data). asics do not store or use a full block data. they are given a small slice of data to represent the block and they has it out. its the POOLS (separate entity) that relay and hold real block data. and these pool servers DO NOT need to be at the same location as the ASIC's.

EG chinese pools can run their pool servers in america but house the ASICS in china. (they already do)

3. the long debate going on for the last year about block data is a meaningless myth.. do you think that netflix is crying, due to the false belief that only 6000 people can see their 3gb for an hour long HD show? .. no because millions of people can see 3gb in under an hour (ofcourse thats download rate)
do you think twitch is crying because only 6000 people can play an online game(upload data) while in teamspeak(upload) while livestreaming it all to twitch(upload).... no because millions of people do it.

in short internet speeds are not an issue.

[Ultrafinery]

I had this discussion with a friend not long ago and here is my thoughts... This came about when talking about 21INC and Intel being involved in blockchain tech.

There are about 2 billion PCs in the world at the moment. If each motherboard had a single ASIC chip from the AntMiner S7 (25GH/s @ 5 watts) it would equal 50billion GH/s.

Are those boxen running 24/7? Never switched off? And Toto Laptops too?
Constantly connected to the internet?
Why would anyone pay an extra, let's say $25 (because arbitrary numbers are fun)  for a computer, knowing they will "mine" $5?
Is Grandma/Visa/my hospital interested in Bitcoin mining?

Do you pay extra for your computer because it has 2 extra USB ports? or even firewire? No, its so cheap for them to add it that its just added.

Yes, I do pay extra for those USB ports. If I didn't need those USB ports, and a similar MB was available for less (without them), I would buy that instead.
If most people didn't need the extra USB ports, that MB company would soon go out of business.
That's why MB don't come with 50 USB ports -- because while the costs are negligible, the rewards are zip.
Successful businesses become successful by eliminating unnecessary costs, not adding them (as you suggest).

You dont sell it as a mining device, you sell it as a PC with an extra feature of mining.

While no one ever went broke by banking on stupidity of others, this will likely be the first time. I'm sure some people will say "Gee Honey, it's comfabulator-compatible and shnurgles SHA256, for only $25 more! OMG, let's get this!" I'm certain of this because actual, IRL people bough 21inc's $400 PiTato. The important bit here is most stayed away in droves.

The entire network is about 1.3 billion GH/s at the moment. 8 watts isnt going to break the bank for any homeowner, or even a large corporation I wouldnt think.

When I was a kid, I reasoned like that too: "Most people don't even pick up a penny when they drop it, they couldn't care less. If everyone in the world just sent me a penny, it "isnt going to break the bank," but I'd be a millionaire!"

Maybe this could be worded differently. Id be willing to 'donate' $0.50 a month to run the mining chip in order to help secure the network. Those who would not be can simply not configure the miner and it will sit idle.

Then buy yourself a USB stick. Easy peasy.
You keep comparing an extra USB port (pennies) to a miner (chip, new MB layout, likely extra VR/cooling/other support circuitry (chip != miner, other stuff there too). So apples to oranges.

If you insist on making people pay for shit they don't need, just start selling computers pre-loaded with adware, which also makes their boxen a part of your bot net. Most people wouldn't notice that either.

P.S. also see boldface, which you might've missed.

[RealBitcoin]

Even if you produce cheap mining equipment elsewhere besides China, operating costs such as electricity and manpower would still kill your profits. In all honesty the only situation that can keep mining as decentralized as possible is for the difficulty to remain stable.

Like there arent any cheap countries other than china?

I`m sure you can setup a sweathshop in any 3rd world country, but we are talking mostly about robot work here, and for  that you only need materials ,a few engineers and electricity.

For example you could setup manufacturing plants in Iceland, cheap electricity and probably less regulations.

[aerobatic]

• If the bitcoin price increases, more miners will join us due to greed and existing smaller miners will have enough profits to uppgrade, thus mining decentralizes
• Current mining equipment has reached the cutting edge of technology, the 16 nanometer chips are currently the best, and mining efficiency increase will probably slow down to a logarithmic curve now. This means that big miners wont have huge advantage anymore over little miners, by uppgrading to new stuff. Also people who buy the latest mining equipment, will suffer less deflation, and if a newer one comes out they can sell them at a better price and not lose that much money. This will keep more money in pockets of smaller miners, and they can uppgrade now more efficiently with less losses. Also miners that buy mining equipment now, can use that equipment longer before the difficulty increases thus making faster ROI and more profits so they can expand faster.
• The upcoming halving should double the price, but it can increase it even more in the longer term, making it easier for miners to mine, and decentralize it
• We must have a very good alert system and comunication system in case of a malicious hardfork happens. Especially a pre-planned one, that was due to bribery. Totalitarian takeovers of bitcoin should be fight against by the entire community!
• We must incentivize bitcoin mining again, and raise awareness to it, especially in countries where the electricity is cheap by default. People who live in cheap electricity countries must participate in bitcoin mining for the sake of bitcoin's future!
• Anyone who cares about bitcoin, should support it now, and should spread the word about it! We should stop hoping for bitcoin to succeed and start working on bitcoin's success!
• 21 Inc mining chips to be integrated in every electronic gadget, so that the masses can mine bitcoin in idle mode, decentralizing mining even more!
  https://www.cryptocoinsnews.com/breaking-21-inc-releases-new-bitcoin-mining-chip-smartphones/
  

RBC -

your grasp of the technology and economics of mining are superficial and wrong in places.

1.  Every mining chip could be integrated into electronic gadgets.  Whether its from 21 Inc or Bitfury or Antminer, there's nothing stopping anyone from doing it.  The question is whether a market exists and whether the punters want it and are willing to pay for it?  (so far it doesn't seem like the market wants it)

2.  We all care about bitcoin, all the miners, and both Core and Classic camps care about bitcoin.  Its just they have different priorities and think different solutions are whats needed to scale it (and have different incentives).   Im with Andreas Antonopolous in saying that ALL scaling solutions are needed, not just SegWit and Lightning Network for the long term but ALSO increasing the block size for the short term (...asap!)

3.  the simple fact is that mining is sensitive to electricity costs so you either have to mine in places where its cheap (like Iceland, Venezuela etc) or you have to mine in places where the electrical companies are willing to be paid a share of the bitcoin proceeds instead of fiat KwH prices (some of china/mongolia etc)

4.  16 nm is just the current process (and is the most efficient to date).  Not every mining chip is there yet.   But i don't think you grasp just how expensive it is to create a 16nm asic.  It would've cost any company that did it at least $30m.   (thats just design, NRE costs and the first few wafers)  That limits creating bitcoin mining chips to only the biggest and best financed companies.   Thats probably the biggest cause of the mining centralisation.  And its going to get worse.  9 & 10nm processes are coming next year).  And they will be even more expensive than 16nm.   The requirement to mine efficiently requires the latest custom asic chips, and that drives centralisation.  Companies that have invested significant shareholder funds to create a 16nm or next year, 10nm asics, are going to want to want to realise returns from their investment, and to do that they need to build out their own mines, and while their chip is better than everyone else's chip, they need to keep it to themselves and mine as much as they can so that they retain their cost advantage for the longest time.  They will only start selling their asic to smaller miners when their chip isn't better than anyone else's (better = lower power or lower cost) - or when the customer's pay anywhere close to the margins that they can make mining themselves.   This explains why the biggest miners in the world are the ones that make their own chips, and also explains why 21 Inc is nowhere, because  - at least historically - their chips weren't the best asics and in part explains why they try to sell them to the public.   the public, however, aren't stupid... and most of them realise they cant mine profitably nor earn back the cost of the miner they bought... thus the mining is a token effort.   the whole point of mining is to be profitable and have an incentive to do it.

5.  mining efficiency improvements are slowing down but not necessarily for the reasons you mention.  sha-256 isn't monolithic.  bit by bit, people have found ways of improving the circuit designs, both on chip and system-wide (long strings, without voltage converters).   the main reason efficiency improvements are slowing down is that previous mining chips either weren't on the latest process, or, that they weren't the most optimised designs.   but both of those things are now beginning to happen... designs are becoming more optimum (both asic design and system design)... and sha-256 algo's are getting tighter.  there's still further optimisations to be done to algorithms (for instance, asicboost.com).  the best mining chips, to date have been a combination of efficient designs, and new processes (16nm/14nm etc).  Once companies achieve the best algo's on the best processes, then they're locked into moore's law... and they're converging towards that but as yet they aren't there.  maybe next year we'll be closer tracking to moore's law, but previously we've been accelerating performance gains much faster than moore's law.

6.  agree with you that we should stop hoping and start doing.  but you haven't said anything that actually can be done.   imho we've got to stop in-fighting.  we all want bitcoin to succeed but we've got ridiculous problems that we shjouldnt be having.  We've got competing teams dissing each other.  we've got fanboys on both sides doing evil things like censorship, and down voting posts, or ridiculing people who are part of the solution.   it seems to me we're lacking a leader.  A Linus Torvalds.  its a shame Satoshi abdicated.  Maybe if he returns he can help bridge the chasm of bitcoin developers and miners.

7.  its not just people in cheap electricity places that can mine.  its also people in cold places that need heat.  that opens it up a bit more.

[RealBitcoin]

RBC -

1) It can probably be done, and it can be done intelligently. I`m sure there are tons of microearning services out there that people love to do. It is doable.

2) Well lets just leave that to tech people. I`m sure putting bitcoin out to unncesessary risks like a hardfork is not a wise idea, when thousands of hackers are waiting for a small vulnerability to have it their way.

3) Have you ever heard of solar panels? We dont live in the stoneage anymore with coal plants

4) Thats probably the hard edge of technology, I mean chips smaller than 16 nm? It would be pretty hard to do, and even if they do it, it will slow them down. So a mining equipment purchased today will have a slower deflation than all previous models.

So I`m sure those that get into mining today, can be luckyer than previous miners. So small mining is not entirely out the window yet.

5) Sure but the efficiency improvements will resemble a log curve, not an exponential one. The rate of efficiency increase will decrease. This is just natural, you cant grow forever.

6) No we dont need a ruler for bitcoin. Bitcoin has to work as it is, and no powergrabs.

7) Well you just gave a good idea. Bitcoin mining chips integrated in heating systems. That way the extra heat will warm up the house in cold climates