Google & Co. Mining ?!??

[Michele1940]

Hi,

what would happen if Giang corporations would start mining from tomorrow ?

[Maasu]

Solo / Enthusiast mining would die over night, but the legitimacy of bitcoins would probably increase several fold along with potentially the value.

[Michele1940]

But if they mine just to get rid of BTC i/of using them, where is the value ?

[malditonuke]

But if they mine just to get rid of BTC i/of using them, where is the value ?

the other bitcoins would still exist and be able to be traded.  if the "giants" don't spend the coins they generated, that would put upward pressure on the value of the old coins.

[BitcoinPorn]

But if they mine just to get rid of BTC i/of using them, where is the value ?

The value is a shitload of Bitcoin gets put into the community and all of a sudden the legitimacy problems with big merchants that is holding back the coin right now, will no longer be an issue, it could be the thing to not only make the coin official, but you know Google would try and regulate how fast they generate coin.

Also, they would do things by solar power or wind

[Michele1940]

But if they mine just to get rid of BTC i/of using them, where is the value ?

the other bitcoins would still exist and be able to be traded.  if the "giants" don't spend the coins they generated, that would put upward pressure on the value of the old coins.

If there will be ways to spend BTC aside from the speculative markets, I guess....

[Michele1940]

BY the way, what is your mining rate ?? How many BTC did you actually mind and how many did you buy on the market ??

Share this info with the community.

Me : 0 Mined, 22 Bought.

[BitcoinPorn]

Bought 1 on the market.

Donated > 1

Earned 1

Have not checked browser mining stats in a bit, but I am not sure if I want to put those out with how people intend to abuse the technology.

Would have bought more if I had the cash.

[epii]

Mined 6, and lost them.  Bought 20ish.

[Missy]

If Google (or some well-resourced TLA) wanted to kill BTC (I'm not saying they do, just if they did) and they decided to get serious then I imagine that they could do so fairly easily.

If they threw even a fraction of their computing power into mining I suspect that they could outpace the total output of the current miners and grab the lion's share of new coins for themeselves.  They could then simply sit on these (or even "destroy" them).  Some people may argue that this would increase the value of existing coins, but I don't think so.  If there were no freely-available new coins then the barrier to entry would become much higher for potential new adopters.  The outcome would be a smaller user base, and possibly also the ultimate a collapse of the system, except pehaps amongst those already holding coins.

There's also the 51% thing to consider.  Any big player with sufficient resources could conceivably disrupt or corrupt the block chain.

[shata]

We definitely should not talk about this lol... This could screw everyone over when you have huge company with $$$$ up the ass start building mining rig farms.

[JoelKatz]

This scenario is really unlikely. But it would be terrible for miners, great for early adopters, and awesome for BitCoin itself. Obviously, miners would be screwed because the difficulty would go through the roof. Early adopters would be thrilled because the value of a BitCoin would go up and they could consume a very high fraction of the market volume selling off their BitCoins without causing it to crash. Not only would they get absurdly rich, but they'd be *helping* BitCoins by doing it. It would be awesome for BitCoin itself because the value of coins would go up and the involvement of large companies would legitimize BitCoins further.

The only motive I could see for them doing this would be to try to kill BitCoins. But like the Goldfinger attack, this is an absurdly inefficient way to do that.

[Missy]

We definitely should not talk about this

Not talking about it won't reduce the risk of it happening.

These people aren't stupid, are very likely to be aware of bitcoins, and have huge resources at their disposal.

A head-in-the-sand attitude won't help anyone.  It's better to be aware of and address these (very real) possibilities rather than brushing them under the carpet and hoping it won't happen.

[edit]
Added the quote to make it clear what i replying to
[/edit]

[joepie91]

We definitely should not talk about this lol... This could screw everyone over when you have huge company with $$$$ up the ass start building mining rig farms.

Not talking about problems doesn't make them disappear.

If Google (or some well-resourced TLA) wanted to kill BTC (I'm not saying they do, just if they did) and they decided to get serious then I imagine that they could do so fairly easily.

If they threw even a fraction of their computing power into mining I suspect that they could outpace the total output of the current miners and grab the lion's share of new coins for themeselves.  They could then simply sit on these (or even "destroy" them).  Some people may argue that this would increase the value of existing coins, but I don't think so.  If there were no freely-available new coins then the barrier to entry would become much higher for potential new adopters.  The outcome would be a smaller user base, and possibly also the ultimate a collapse of the system, except pehaps amongst those already holding coins.

There's also the 51% thing to consider.  Any big player with sufficient resources could conceivably disrupt or corrupt the block chain.

How would the barrier be higher? For the majority of people mining already isn't profitable, so they would have to "enter the economy" by exchange fiat money for bitcoins, or accepting payments/donations in bitcoin. That doesn't change if mined coins are hoarded by one player, the value just goes up.

[Missy]

This scenario is really unlikely. But it would be terrible for miners, great for early adopters, and awesome for BitCoin itself. Obviously, miners would be screwed because the difficulty would go through the roof. Early adopters would be thrilled because the value of a BitCoin would go up and they could consume a very high fraction of the market volume selling off their BitCoins without causing it to crash. Not only would they get absurdly rich, but they'd be *helping* BitCoins by doing it. It would be awesome for BitCoin itself because the value of coins would go up and the involvement of large companies would legitimize BitCoins further.

The only motive I could see for them doing this would be to try to kill BitCoins. But like the Goldfinger attack, this is an absurdly inefficient way to do that.

Without commenting on the likelihood or otherwise, I don't see how it would be good for anyone.

If a Big Player™ decided to undermine bitcoins then they could do so very easily.  All they'd have to do is throw enough resources at it to capture the majority of the mining capability and they'd be able to sit on whatever they mine.  This would be likely to temporarily push up the value of existing coins, thereby making it much more difficult for any new adopters to jump in.  Then when the number of people using bitcoins contracts and the number of services accepting them in payment shrinks (both of which I think would be likely in this scenario) the value of each coin would decrease as the existing supply outpaced the demand.

And don't forget the 51% thing.  That's potentially a very big issue.  If someone could control the block chain, even partialy, then the intergity of the entire system would be compromised.

If such a player actually wanted to help bitcoins then the best thing they could do is not mine at all, but rather just start accepting them as payments.

[JoelKatz]

If a Big Player™ decided to undermine bitcoins then they could do so very easily.  All they'd have to do is throw enough resources at it to capture the majority of the mining capability and they'd be able to sit on whatever they mine.  This would be likely to temporarily push up the value of existing coins, thereby making it much more difficult for any new adopters to jump in.

If the value of existing coins goes up, then people don't need as many of them. So it doesn't matter that they're more difficult to get. It cancels out.

Then when the number of people using bitcoins contracts and the number of services accepting them in payment shrinks (both of which I think would be likely in this scenario) the value of each coin would decrease as the existing supply outpaced the demand.

Then, when the value drops, people can get as many bitcoins as they need. So if you assume the problem occurs, it will solve itself. This tends to suggest the problem won't actually happen.

If they push up the price of bitcoins, people will need fewer of them. If they make bitcoins expensive and thereby discourage people, the reduced demand will lower the price, ending the discouragement.

And don't forget the 51% thing.  That's potentially a very big issue.  If someone could control the block chain, even partialy, then the intergity of the entire system would be compromised.

That's true, but that's a different issue from them mining. At worst, they could significantly increase the time it would take before you could be assured a bitcoin transaction wasn't going to be reversed.

[joepie91]

This scenario is really unlikely. But it would be terrible for miners, great for early adopters, and awesome for BitCoin itself. Obviously, miners would be screwed because the difficulty would go through the roof. Early adopters would be thrilled because the value of a BitCoin would go up and they could consume a very high fraction of the market volume selling off their BitCoins without causing it to crash. Not only would they get absurdly rich, but they'd be *helping* BitCoins by doing it. It would be awesome for BitCoin itself because the value of coins would go up and the involvement of large companies would legitimize BitCoins further.

The only motive I could see for them doing this would be to try to kill BitCoins. But like the Goldfinger attack, this is an absurdly inefficient way to do that.

Without commenting on the likelihood or otherwise, I don't see how it would be good for anyone.

If a Big Player™ decided to undermine bitcoins then they could do so very easily.  All they'd have to do is throw enough resources at it to capture the majority of the mining capability and they'd be able to sit on whatever they mine.  This would be likely to temporarily push up the value of existing coins, thereby making it much more difficult for any new adopters to jump in.  Then when the number of people using bitcoins contracts and the number of services accepting them in payment shrinks (both of which I think would be likely in this scenario) the value of each coin would decrease as the existing supply outpaced the demand.

And don't forget the 51% thing.  That's potentially a very big issue.  If someone could control the block chain, even partialy, then the intergity of the entire system would be compromised.

If such a player actually wanted to help bitcoins then the best thing they could do is not mine at all, but rather just start accepting them as payments.

How does the value going up make the entry barrier any higher? A number is just a number. Regardless of whether you can get 10 or 100 bitcoins for $100, 100 dollar worth of bitcoins is 100 dollar worth of bitcoins.

[BitcoinPorn]

How does the value going up make the entry barrier any higher? A number is just a number. Regardless of whether you can get 10 or 100 bitcoins for $100, 100 dollar worth of bitcoins is 100 dollar worth of bitcoins.

I was going to Photoshop a chart with a pound of feathers and a pound of rocks but I'm too tired.

[Michele1940]

Well, I have started this discussion and I am happy to see that it is taken into consideration.

I fully agree with Missy's answers given in the discussion. Always remember that the big guys, not only have the hardware resources and the money to mine but also they have a lot of intellectual's added value of so many smart guys working for them. This means to me they are fully aware of BTC and they might even have taken it into consideration for a sort of brain storming section on the subject.

To me, BTC has a value only in the terms presented by its inventor. Quoting from the original document of Mr.Satoshi Nakamoto:

"Abstract. A purely peer-to-peer version of electronic cash would allow online
payments to be sent directly from one party to another without going through a
financial institution. Digital signatures provide part of the solution, but the main
benefits are lost if a trusted third party is still required to prevent double-spending.
We propose a solution to the double-spending problem using a peer-to-peer network."

Therefore BTC, is merely a way to avoid double spending transactions on Internet Commerce.

I would address you to read my post about a Paradigm Shift @ http://pointapp.blogspot.com/2011/06/comment-to-bitcoin-uncensored-blog.html

Than, let's continue the discussion.

[Missy]

If a Big Player™ decided to undermine bitcoins then they could do so very easily.  All they'd have to do is throw enough resources at it to capture the majority of the mining capability and they'd be able to sit on whatever they mine.  This would be likely to temporarily push up the value of existing coins, thereby making it much more difficult for any new adopters to jump in.

If the value of existing coins goes up, then people don't need as many of them. So it doesn't matter that they're more difficult to get. It cancels out.

So, by extension, it's practical for the bitcoin economy to continue as it is now, with no more coins being created or introduced than are currently in circulation?

Then when the number of people using bitcoins contracts and the number of services accepting them in payment shrinks (both of which I think would be likely in this scenario) the value of each coin would decrease as the existing supply outpaced the demand.

Then, when the value drops, people can get as many bitcoins as they need. So if you assume the problem occurs, it will solve itself. This tends to suggest the problem won't actually happen.

If they push up the price of bitcoins, people will need fewer of them. If they make bitcoins expensive and thereby discourage people, the reduced demand will lower the price, ending the discouragement.

I think there's a 'perceived value' thing to be addressed.  I think that people are unlikey to be drawn in if the price of a single coin is excessively high (in fiat terms).

And don't forget the 51% thing.  That's potentially a very big issue.  If someone could control the block chain, even partialy, then the intergity of the entire system would be compromised.

That's true, but that's a different issue from them mining. At worst, they could significantly increase the time it would take before you could be assured a bitcoin transaction wasn't going to be reversed.

Yes, I agree that it's unrelated to mining, but it's a very real possibilty if someone decides to throw enough power at it.

Unless I'm misunderstanding things (which is quite possible) then it seems to me that it's also a much much bigger issue than the time it takes to confirm a transaction.  Doesn't control of the block chain enable the controller to reverse every transaction (or at least a significant proprotion of them), and also create fraudulent transcations?