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Author Topic: Mining Centralization Concerns  (Read 2259 times)
aerobatic
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April 23, 2016, 11:08:09 AM
 #41


  • 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.


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April 27, 2016, 07:03:16 AM
 #42


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 Cheesy

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 Cheesy

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