shmadz
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September 03, 2015, 02:52:42 AM |
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My personal impression is that hash rate is dictated by price and (more importantly?) technology, with rate reacting to price and not the inverse. The two big ramps were directly related to a paradigm shift in mining tech, CPU to GPU, and GPU to ASIC. With ASIC gear becoming increasingly efficient we will probably see a rise in hashrate even in the face of a flat or modestly declining price. The upcoming halving should be pretty interesting for those watching this relationship.
Agreed. Hashrate should follow price, but it seems like during those two massive increases it was the price chasing the hashrate.... ![Huh](https://bitcointalk.org/Smileys/default/huh.gif) Someone better suited to scientific analysis of data sets would do a better job of analyzing this relationship ( hint, hint, Professor Stolfi ) ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) Anyways, I don't expect any further large expansions in mining technology or efficiency, certainly nothing on the scale of cpu>gpu>asic. Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show))
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ChartBuddy
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September 03, 2015, 03:05:03 AM |
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ChartBuddy
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September 03, 2015, 04:02:15 AM |
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Cconvert2G36
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![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
September 03, 2015, 04:08:04 AM |
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My personal impression is that hash rate is dictated by price and (more importantly?) technology, with rate reacting to price and not the inverse. The two big ramps were directly related to a paradigm shift in mining tech, CPU to GPU, and GPU to ASIC. With ASIC gear becoming increasingly efficient we will probably see a rise in hashrate even in the face of a flat or modestly declining price. The upcoming halving should be pretty interesting for those watching this relationship.
Agreed. Hashrate should follow price, but it seems like during those two massive increases it was the price chasing the hashrate.... ![Huh](https://bitcointalk.org/Smileys/default/huh.gif) Someone better suited to scientific analysis of data sets would do a better job of analyzing this relationship ( hint, hint, Professor Stolfi ) ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) Anyways, I don't expect any further large expansions in mining technology or efficiency, certainly nothing on the scale of cpu>gpu>asic. Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show)) The big difference this time around... We have our own little OPEC (OCDM organization of chip designing miners), with apparently only bitmain selling next gen hardware to the small fish. Small fish are more likely to mine and hoard, using it almost as a form of indirect purchase. The current dynamic makes me think that as a percentage, more coins are being mined and sold than in days of yore. The days of mining at a loss with your gaming rig in 2012 are surely over.
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BitThink
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September 03, 2015, 04:09:49 AM |
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My personal impression is that hash rate is dictated by price and (more importantly?) technology, with rate reacting to price and not the inverse. The two big ramps were directly related to a paradigm shift in mining tech, CPU to GPU, and GPU to ASIC. With ASIC gear becoming increasingly efficient we will probably see a rise in hashrate even in the face of a flat or modestly declining price. The upcoming halving should be pretty interesting for those watching this relationship.
Agreed. Hashrate should follow price, but it seems like during those two massive increases it was the price chasing the hashrate.... ![Huh](https://bitcointalk.org/Smileys/default/huh.gif) Someone better suited to scientific analysis of data sets would do a better job of analyzing this relationship ( hint, hint, Professor Stolfi ) ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) Anyways, I don't expect any further large expansions in mining technology or efficiency, certainly nothing on the scale of cpu>gpu>asic. Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show)) Block size has almost nothing to do with the hashing. The concern is the bandwidth and storage space, not the CPU. Validation of transactions is much faster than mining, and even today's PC can handle validating all transactions in 20M block. So the main question is whether the network bandwidth and storage space will increase exponentially for next 20 years, not the CPU.
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brg444
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![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
September 03, 2015, 04:10:54 AM |
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My personal impression is that hash rate is dictated by price and (more importantly?) technology, with rate reacting to price and not the inverse. The two big ramps were directly related to a paradigm shift in mining tech, CPU to GPU, and GPU to ASIC. With ASIC gear becoming increasingly efficient we will probably see a rise in hashrate even in the face of a flat or modestly declining price. The upcoming halving should be pretty interesting for those watching this relationship.
Agreed. Hashrate should follow price, but it seems like during those two massive increases it was the price chasing the hashrate.... ![Huh](https://bitcointalk.org/Smileys/default/huh.gif) Someone better suited to scientific analysis of data sets would do a better job of analyzing this relationship ( hint, hint, Professor Stolfi ) ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) Anyways, I don't expect any further large expansions in mining technology or efficiency, certainly nothing on the scale of cpu>gpu>asic. Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show)) The big difference this time around... We have our own little OPEC (OCDM organization of chip designing miners), with apparently only bitmain selling next gen hardware to the small fish. Small fish are more likely to mine and hoard, using it almost as a form of indirect purchase. The current dynamic makes me think that as a percentage, more coins are being mined and sold than in days of yore. The days of mining at a loss with your gaming rig in 2012 are surely over. Contrary to popular opinion I am confident that a considerable (it may be a majority) part of newly minted bitcoins are being held.
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Cconvert2G36
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![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
September 03, 2015, 04:18:30 AM |
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My personal impression is that hash rate is dictated by price and (more importantly?) technology, with rate reacting to price and not the inverse. The two big ramps were directly related to a paradigm shift in mining tech, CPU to GPU, and GPU to ASIC. With ASIC gear becoming increasingly efficient we will probably see a rise in hashrate even in the face of a flat or modestly declining price. The upcoming halving should be pretty interesting for those watching this relationship.
Agreed. Hashrate should follow price, but it seems like during those two massive increases it was the price chasing the hashrate.... ![Huh](https://bitcointalk.org/Smileys/default/huh.gif) Someone better suited to scientific analysis of data sets would do a better job of analyzing this relationship ( hint, hint, Professor Stolfi ) ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) Anyways, I don't expect any further large expansions in mining technology or efficiency, certainly nothing on the scale of cpu>gpu>asic. Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show)) The big difference this time around... We have our own little OPEC (OCDM organization of chip designing miners), with apparently only bitmain selling next gen hardware to the small fish. Small fish are more likely to mine and hoard, using it almost as a form of indirect purchase. The current dynamic makes me think that as a percentage, more coins are being mined and sold than in days of yore. The days of mining at a loss with your gaming rig in 2012 are surely over. Contrary to popular opinion I am confident that a considerable (it may be a majority) part of newly minted bitcoins are being held. Meaning their profit margin may be > 50% of their revenue? ![Grin](https://bitcointalk.org/Smileys/default/grin.gif)
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brg444
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![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
September 03, 2015, 04:24:54 AM |
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My personal impression is that hash rate is dictated by price and (more importantly?) technology, with rate reacting to price and not the inverse. The two big ramps were directly related to a paradigm shift in mining tech, CPU to GPU, and GPU to ASIC. With ASIC gear becoming increasingly efficient we will probably see a rise in hashrate even in the face of a flat or modestly declining price. The upcoming halving should be pretty interesting for those watching this relationship.
Agreed. Hashrate should follow price, but it seems like during those two massive increases it was the price chasing the hashrate.... ![Huh](https://bitcointalk.org/Smileys/default/huh.gif) Someone better suited to scientific analysis of data sets would do a better job of analyzing this relationship ( hint, hint, Professor Stolfi ) ![Wink](https://bitcointalk.org/Smileys/default/wink.gif) Anyways, I don't expect any further large expansions in mining technology or efficiency, certainly nothing on the scale of cpu>gpu>asic. Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show)) The big difference this time around... We have our own little OPEC (OCDM organization of chip designing miners), with apparently only bitmain selling next gen hardware to the small fish. Small fish are more likely to mine and hoard, using it almost as a form of indirect purchase. The current dynamic makes me think that as a percentage, more coins are being mined and sold than in days of yore. The days of mining at a loss with your gaming rig in 2012 are surely over. Contrary to popular opinion I am confident that a considerable (it may be a majority) part of newly minted bitcoins are being held. Meaning their profit margin may be > 50% of their revenue? ![Grin](https://bitcointalk.org/Smileys/default/grin.gif) Consider that some of these mining firms have other revenue streams. You cite BitMain and it is an absolutely perfect example. Considering the amount of money and profit they make selling mining gear. Do you actually believe that they need to sell any % of the bitcoins they mine to cover expenses? Another example is BitFury which is getting fed by VC money at record rates and have also, in the past, had their fair share of surely spectacular revenues and profit selling their mining gears. Now we don't actually have to speculate about them since they have made it clear in interviews they are absolutely not considering selling any of the bitcoins they mine. These together amount to nearly 25% of the network. Would you like to suggest they are the exception?
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Franciem
Sr. Member
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Real power doesnt hit hard,but right to the target
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September 03, 2015, 04:28:19 AM |
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welcome back 230$ we will hit 250$ this week ![Grin](https://bitcointalk.org/Smileys/default/grin.gif)
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Cconvert2G36
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September 03, 2015, 04:50:06 AM |
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Consider that some of these mining firms have other revenue streams. You cite BitMain and it is an absolutely perfect example. Considering the amount of money and profit they make selling mining gear. Do you actually believe that they need to sell any % of the bitcoins they mine to cover expenses?
Selling mining gear is a welcome addition to mining yourself (unless it dilutes you too much via difficulty, an OCDM would likely frown on selling to the public), Bitmain's prices seem to track what the device might return before it becomes inefficient. It's almost like selling a bond to another bond investor. Another example is BitFury which is getting fed by VC money at record rates and have also, in the past, had their fair share of surely spectacular revenues and profit selling their mining gears. Now we don't actually have to speculate about them since they have made it clear in interviews they are absolutely not considering selling any of the bitcoins they mine.
These together amount to nearly 25% of the network. Would you like to suggest they are the exception?
VC funded mining operations as the new 2012 guy with GPU's mining at a loss... I like it. For everyone else, profit vs loss is a more tenuous balance, and as a whole, I think the industry sells more as a % vs the hobbyist days.
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Chef Ramsay
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September 03, 2015, 04:58:59 AM |
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A. zerohedge. B. Communist China is not just like Greece. Go figure. C. A zerohedge article? Wrong?! If you can't trust zerohedge, who can you trust?
@spud21 even if the Chinese could buy BTC directly from miners (miners who could themselves sell that BTC on exchanges for USD or Euro), what would that change?
A. Zerohedge has an agenda. It's no secret; but judging a book by the cover will probably not allow you to obtain some knowledge. I read his articles - not always accept them. In this case though, he has solid points and that's the reason I've crossposted it from klee's comment on another thread. B. I don't want to comment. I vowed not to talk about politics in public ever since I voted for the previous government of ours with 62% NO to new austerity measures and our PM acted as the sockpuppet of the EU politics. Communism? No, just economic totalitarianism. Yeah, it's different as a concept, not as an outcome to the people though. FWIW, we're en route for new elections. We have no government anymore in Greece and I think we will never have under these circumstances.Well, I have a whole shitload of it (gov.usd that is) and I'm at a point where I'd trade my citizenship to you for your lot over there and you can have my guns to go with it. I know I'm being brash and all but there's a huge sinking ship over here w/ an epic amount of dependents on the state which outnumbers your country in whole by 2:1 or more. I wish i could go Atlas at this point but there doesn't seem anywhere to go to do that and I'm still young so I need more to earn and save to do such a thing. If EW is the ticket then 2020 is when many of us can fly out. /rant
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brg444
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![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
September 03, 2015, 04:59:54 AM |
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Consider that some of these mining firms have other revenue streams. You cite BitMain and it is an absolutely perfect example. Considering the amount of money and profit they make selling mining gear. Do you actually believe that they need to sell any % of the bitcoins they mine to cover expenses?
Selling mining gear is a welcome addition to mining yourself (unless it dilutes you too much via difficulty, an OCDM would likely frown on selling to the public), Bitmain's prices seem to track what the device might return before it becomes inefficient. It's almost like selling a bond to another bond investor. Another example is BitFury which is getting fed by VC money at record rates and have also, in the past, had their fair share of surely spectacular revenues and profit selling their mining gears. Now we don't actually have to speculate about them since they have made it clear in interviews they are absolutely not considering selling any of the bitcoins they mine.
These together amount to nearly 25% of the network. Would you like to suggest they are the exception?
VC funded mining operations as the new 2012 guy with GPU's mining at a loss... I like it. For everyone else, profit vs loss is a more tenuous balance, and as a whole, I think the industry sells more as a % vs the hobbyist days. Did you not read what I wrote? I won't bother hunting down the source because you are apparently too obtuse to change your mind about it but a BitFury is not alone in publicly stating they are not selling their bitcoins. Selling mining gear is by all account a ridiculously profitable business because if it weren't they wouldn't bother with it and just use the gear to mine themselves as you've stated. It is quite likely the profit they derive from it is well enought to cover a large portion of their expenses.
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ChartBuddy
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September 03, 2015, 05:02:13 AM |
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billyjoeallen
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Hide your women
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September 03, 2015, 05:08:00 AM |
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Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show))
Block size MUST scale exponentially whether it's simple or not. A crypto with a block size limit is analogous to an Internet with a bandwidth limit of 56K modems. No video. No VOIP. Vastly more limited functionality. It may be hard, but don't fucking tell me it's impossible. Some other crypto will do it if we don't.
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Cconvert2G36
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![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
September 03, 2015, 05:09:21 AM |
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Consider that some of these mining firms have other revenue streams. You cite BitMain and it is an absolutely perfect example. Considering the amount of money and profit they make selling mining gear. Do you actually believe that they need to sell any % of the bitcoins they mine to cover expenses?
Selling mining gear is a welcome addition to mining yourself (unless it dilutes you too much via difficulty, an OCDM would likely frown on selling to the public), Bitmain's prices seem to track what the device might return before it becomes inefficient. It's almost like selling a bond to another bond investor. Another example is BitFury which is getting fed by VC money at record rates and have also, in the past, had their fair share of surely spectacular revenues and profit selling their mining gears. Now we don't actually have to speculate about them since they have made it clear in interviews they are absolutely not considering selling any of the bitcoins they mine.
These together amount to nearly 25% of the network. Would you like to suggest they are the exception?
VC funded mining operations as the new 2012 guy with GPU's mining at a loss... I like it. For everyone else, profit vs loss is a more tenuous balance, and as a whole, I think the industry sells more as a % vs the hobbyist days. Did you not read what I wrote? I won't bother hunting down the source because you are apparently too obtuse to change your mind about it but a BitFury is not alone in publicly stating they are not selling their bitcoins. Selling mining gear is by all account a ridiculously profitable business because if it weren't they wouldn't bother with it and just use the gear to mine themselves as you've stated. It is quite likely the profit they derive from it is well enought to cover a large portion of their expenses. If you bothered to read, I agree with you about bitfury, bitmain, knc, 21. I was hoping you would see they aren't yet 100% of the mining industry. Drop the confrontation tone, it's tiresome.
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brg444
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![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
September 03, 2015, 05:11:10 AM |
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Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show))
Block size MUST scale exponentially whether it's simple or not. A crypto with a block size limit is analogous to an Internet with a bandwidth limit of 56K modems. No video. No VOIP. Vastly more limited functionality. It may be hard, but don't fucking tell me it's impossible. Some other crypto will do it if we don't. You are clearly clueless about why the block size limit is necessary and there in the first place. Go back to your homeworks. First assignement: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-May/007880.htmlTo elaborate, in my view there is a at least a two fold concern on this particular ("Long term Mining incentives") front:
One is that the long-held argument is that security of the Bitcoin system in the long term depends on fee income funding autonomous, anonymous, decentralized miners profitably applying enough hash-power to make reorganizations infeasible.
For fees to achieve this purpose, there seemingly must be an effective scarcity of capacity. The fact that verifying and transmitting transactions has a cost isn't enough, because all the funds go to pay that cost and none to the POW "artificial" cost; e.g., if verification costs 1 then the market price for fees should converge to 1, and POW cost will converge towards zero because they adapt to whatever is being applied. Moreover, the transmission and verification costs can be perfectly amortized by using large centralized pools (and efficient differential block transmission like the "O(1)" idea) as you can verify one time instead of N times, so to the extent that verification/bandwidth is a non-negligible cost to miners at all, it's a strong pressure to centralize. You can understand this intuitively: think for example of carbon credit cap-and-trade: the trade part doesn't work without an actual cap; if everyone was born with a 1000 petaton carbon balance, the market price for credits would be zero and the program couldn't hope to share behavior. In the case of mining, we're trying to optimize the social good of POW security. (But the analogy applies in other ways too: increases to the chain side are largely an externality; miners enjoy the benefits, everyone else takes the costs--either in reduced security or higher node operating else.)
This area has been subject to a small amount of academic research (e.g. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519). But there is still much that is unclear.
The second is that when subsidy has fallen well below fees, the incentive to move the blockchain forward goes away. An optimal rational miner would be best off forking off the current best block in order to capture its fees, rather than moving the blockchain forward, until they hit the maximum. That's where the "backlog" comment comes from, since when there is a sufficient backlog it's better to go forward. I'm not aware of specific research into this subquestion; it's somewhat fuzzy because of uncertainty about the security model. If we try to say that Bitcoin should work even in the face of most miners being profit-maximizing instead of altruistically-honest, we must assume the chain will not more forward so long as a block isn't full. In reality there is more altruism than zero; there are public pressures; there is laziness, etc.
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notme
Legendary
Offline
Activity: 1904
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September 03, 2015, 05:18:54 AM |
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Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show))
Block size MUST scale exponentially whether it's simple or not. A crypto with a block size limit is analogous to an Internet with a bandwidth limit of 56K modems. No video. No VOIP. Vastly more limited functionality. It may be hard, but don't fucking tell me it's impossible. Some other crypto will do it if we don't. You are clearly clueless about why the block size limit is necessary and there in the first place. Go back to your homeworks. First assignement: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-May/007880.htmlTo elaborate, in my view there is a at least a two fold concern on this particular ("Long term Mining incentives") front:
One is that the long-held argument is that security of the Bitcoin system in the long term depends on fee income funding autonomous, anonymous, decentralized miners profitably applying enough hash-power to make reorganizations infeasible.
For fees to achieve this purpose, there seemingly must be an effective scarcity of capacity. The fact that verifying and transmitting transactions has a cost isn't enough, because all the funds go to pay that cost and none to the POW "artificial" cost; e.g., if verification costs 1 then the market price for fees should converge to 1, and POW cost will converge towards zero because they adapt to whatever is being applied. Moreover, the transmission and verification costs can be perfectly amortized by using large centralized pools (and efficient differential block transmission like the "O(1)" idea) as you can verify one time instead of N times, so to the extent that verification/bandwidth is a non-negligible cost to miners at all, it's a strong pressure to centralize. You can understand this intuitively: think for example of carbon credit cap-and-trade: the trade part doesn't work without an actual cap; if everyone was born with a 1000 petaton carbon balance, the market price for credits would be zero and the program couldn't hope to share behavior. In the case of mining, we're trying to optimize the social good of POW security. (But the analogy applies in other ways too: increases to the chain side are largely an externality; miners enjoy the benefits, everyone else takes the costs--either in reduced security or higher node operating else.)
This area has been subject to a small amount of academic research (e.g. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519). But there is still much that is unclear.
The second is that when subsidy has fallen well below fees, the incentive to move the blockchain forward goes away. An optimal rational miner would be best off forking off the current best block in order to capture its fees, rather than moving the blockchain forward, until they hit the maximum. That's where the "backlog" comment comes from, since when there is a sufficient backlog it's better to go forward. I'm not aware of specific research into this subquestion; it's somewhat fuzzy because of uncertainty about the security model. If we try to say that Bitcoin should work even in the face of most miners being profit-maximizing instead of altruistically-honest, we must assume the chain will not more forward so long as a block isn't full. In reality there is more altruism than zero; there are public pressures; there is laziness, etc. There will never be no limit. Sure, we could remove the limit from consensus requirements (which I would actually support), but transactions still have a cost. They have to be verified and then stored until all outputs are spent. This requires storage hardware and bandwidth. Also, larger blocks will be orphaned more frequently, providing additional pressure for miners to voluntarily keep blocks small.
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Cconvert2G36
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![](https://bitcointalk.org/Themes/custom1/images/post/xx.gif) |
September 03, 2015, 05:23:58 AM |
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Go back to your homeworks. First assignement: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-May/007880.htmlTo elaborate, in my view there is a at least a two fold concern on this particular ("Long term Mining incentives") front:
One is that the long-held argument is that security of the Bitcoin system in the long term depends on fee income funding autonomous, anonymous, decentralized miners profitably applying enough hash-power to make reorganizations infeasible.
For fees to achieve this purpose, there seemingly must be an effective scarcity of capacity. The fact that verifying and transmitting transactions has a cost isn't enough, because all the funds go to pay that cost and none to the POW "artificial" cost; e.g., if verification costs 1 then the market price for fees should converge to 1, and POW cost will converge towards zero because they adapt to whatever is being applied. Moreover, the transmission and verification costs can be perfectly amortized by using large centralized pools (and efficient differential block transmission like the "O(1)" idea) as you can verify one time instead of N times, so to the extent that verification/bandwidth is a non-negligible cost to miners at all, it's a strong pressure to centralize. You can understand this intuitively: think for example of carbon credit cap-and-trade: the trade part doesn't work without an actual cap; if everyone was born with a 1000 petaton carbon balance, the market price for credits would be zero and the program couldn't hope to share behavior. In the case of mining, we're trying to optimize the social good of POW security. (But the analogy applies in other ways too: increases to the chain side are largely an externality; miners enjoy the benefits, everyone else takes the costs--either in reduced security or higher node operating else.)
This area has been subject to a small amount of academic research (e.g. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519). But there is still much that is unclear.
The second is that when subsidy has fallen well below fees, the incentive to move the blockchain forward goes away. An optimal rational miner would be best off forking off the current best block in order to capture its fees, rather than moving the blockchain forward, until they hit the maximum. That's where the "backlog" comment comes from, since when there is a sufficient backlog it's better to go forward. I'm not aware of specific research into this subquestion; it's somewhat fuzzy because of uncertainty about the security model. If we try to say that Bitcoin should work even in the face of most miners being profit-maximizing instead of altruistically-honest, we must assume the chain will not more forward so long as a block isn't full. In reality there is more altruism than zero; there are public pressures; there is laziness, etc. I thought billyjoe was being silly and hyperbolic about the fight being over tor mining... Damn ![Huh](https://bitcointalk.org/Smileys/default/huh.gif) Oh yeah, and we need to focus on building a fee market at the 25 per block level...
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brg444
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September 03, 2015, 05:24:47 AM |
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Many people mocked me many pages ago for my concern that the block size could not simply scale exponentially for the next 20 years, but I still believe we are reaching the limits of physics and any further significant exponential type gains in computing power beyond asic will likely take us beyond the singularity. I just hope our new synthetic overlords accept bitcoin. (Ok, yes, I've been watching too much humans (tv show))
Block size MUST scale exponentially whether it's simple or not. A crypto with a block size limit is analogous to an Internet with a bandwidth limit of 56K modems. No video. No VOIP. Vastly more limited functionality. It may be hard, but don't fucking tell me it's impossible. Some other crypto will do it if we don't. You are clearly clueless about why the block size limit is necessary and there in the first place. Go back to your homeworks. First assignement: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2015-May/007880.htmlTo elaborate, in my view there is a at least a two fold concern on this particular ("Long term Mining incentives") front:
One is that the long-held argument is that security of the Bitcoin system in the long term depends on fee income funding autonomous, anonymous, decentralized miners profitably applying enough hash-power to make reorganizations infeasible.
For fees to achieve this purpose, there seemingly must be an effective scarcity of capacity. The fact that verifying and transmitting transactions has a cost isn't enough, because all the funds go to pay that cost and none to the POW "artificial" cost; e.g., if verification costs 1 then the market price for fees should converge to 1, and POW cost will converge towards zero because they adapt to whatever is being applied. Moreover, the transmission and verification costs can be perfectly amortized by using large centralized pools (and efficient differential block transmission like the "O(1)" idea) as you can verify one time instead of N times, so to the extent that verification/bandwidth is a non-negligible cost to miners at all, it's a strong pressure to centralize. You can understand this intuitively: think for example of carbon credit cap-and-trade: the trade part doesn't work without an actual cap; if everyone was born with a 1000 petaton carbon balance, the market price for credits would be zero and the program couldn't hope to share behavior. In the case of mining, we're trying to optimize the social good of POW security. (But the analogy applies in other ways too: increases to the chain side are largely an externality; miners enjoy the benefits, everyone else takes the costs--either in reduced security or higher node operating else.)
This area has been subject to a small amount of academic research (e.g. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519). But there is still much that is unclear.
The second is that when subsidy has fallen well below fees, the incentive to move the blockchain forward goes away. An optimal rational miner would be best off forking off the current best block in order to capture its fees, rather than moving the blockchain forward, until they hit the maximum. That's where the "backlog" comment comes from, since when there is a sufficient backlog it's better to go forward. I'm not aware of specific research into this subquestion; it's somewhat fuzzy because of uncertainty about the security model. If we try to say that Bitcoin should work even in the face of most miners being profit-maximizing instead of altruistically-honest, we must assume the chain will not more forward so long as a block isn't full. In reality there is more altruism than zero; there are public pressures; there is laziness, etc. There will never be no limit. Sure, we could remove the limit from consensus requirements (which I would actually support), but transactions still have a cost. They have to be verified and then stored until all outputs are spent. This requires storage hardware and bandwidth. Also, larger blocks will be orphaned more frequently, providing additional pressure for miners to voluntarily keep blocks small. Did you bother reading this part? The fact that verifying and transmitting transactions has a cost isn't enough, because all the funds go to pay that cost and none to the POW "artificial" cost; e.g., if verification costs 1 then the market price for fees should converge to 1, and POW cost will converge towards zero because they adapt to whatever is being applied. Moreover, the transmission and verification costs can be perfectly amortized by using large centralized pools (and efficient differential block transmission like the "O(1)" idea) as you can verify one time instead of N times, so to the extent that verification/bandwidth is a non-negligible cost to miners at all, it's a strong pressure to centralize. This pressure for miners to keep blocks small is temporary and will eventually decline and disappear, it's already starting to seeing as numerous improvements have been made in improving general block propagation time between miners.
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brg444
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September 03, 2015, 05:27:15 AM |
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I thought billyjoe was being silly and hyperbolic about the fight being over tor mining... Damn ![Huh](https://bitcointalk.org/Smileys/default/huh.gif) Oh yeah, and we need to focus on building a fee market at the 25 per block level... When do you propose we focus on this? When the block reward disappears? Raising the block size is basically a subsidy. If you insist on constantly subsidizing transactions cost people will begin expecting it and it will be considerably more difficult to say no in the future. That is the slippery slope of raising the block size.
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