10 minutes blockchain vs difficulty level

[Anarc Senior]

I apologize if I ask the following  obvious questions and perhaps risk wasting everyone's time.  But, I have these nagging questions for a while now:

1).  As I understand it, the 10 minutes delay is to create a new block that there's enough/ sufficient time to fill and confirm the transactions (globally).  But isn't it quite wasteful to keep adjusting the difficulty level to maintain the 10 minutes delay ?  What is so special about the 10 minutes delay?  Has there been any study to quantify more accurately the amount of time to reach the nodes globally ?

2). Let say if we don't have to worry about the trust issue,  in theory we only need one, or perhaps two confirmations right ?  So for the remaining 51% confirmations is essentially to ensure that there's  no cheating could happen.  I got that so far...

3). But what if we could accomplish item#1 and #2 in 5 minutes, 3 minutes or even 30 seconds - shouldn't that be a good thing ?  Why make it more difficult, delay until 10 minutes and empowering expensive equipment ? That seems to feed into the endless cycles of who's got bigger and faster mining capability?  Understand that it seems to justify the rise in bitcoin price...

4). What about making the 51st % node (with the longest chain) to be a lucky lottery winner and avoid increasing the difficulty level and eliminate  the need for fancy equipment and energy burning all together -wouldn't that be more fair and efficient ways to utilize energy and resources ? At the same time avoiding the centralization of miners all together ??

I am guessing that this is too simple and too good to be true - but I have to ask...

Thank you in advance for your reply/ input !

[aleksej996]

Yeah, this would be nice, but everything has it's drawbacks. Satoshi considered all of this, but this was the best solution he could think of.
More you wait, the bigger security, there is just no surpassing that.
1) 10 minutes was thought to be enough to make Bitcoin very fast. Decreasing the average time between blocks increases the risks of orphan blocks. You need to understand that 10 minutes are an average time between blocks, some are closer together.
2 and 3) It isn't about confirmations, it isn't that simple. If you decrease the confirmation time then you decrease the security of that one confirmation and need to have multiple to reach the same security level. And as I said above, that has big drawbacks. There is a reason that 6 confirmations are recommended. Orphan blocks have to happen every now and then, that is just up to chance. The longest orphan chain was 4 blocks long, as far as I know.
4) That would just mean that security of Bitcoin isn't present at all times. Every now and then an attacker would get control of the whole Bitcoin network and during that time Bitcoin would be insecure. A financial system that is secure sometime isn't worth anything.

[HeRetiK]

1).  As I understand it, the 10 minutes delay is to create a new block that there's enough/ sufficient time to fill and confirm the transactions (globally).  But isn't it quite wasteful to keep adjusting the difficulty level to maintain the 10 minutes delay ?  What is so special about the 10 minutes delay?  Has there been any study to quantify more accurately the amount of time to reach the nodes globally ?

You're not going to get the network any more energy efficient -- ie. higher transaction throughput for less electricity spent -- by simply decreasing the block interval. Apart from the orphan / propagation problem that aleksej already mentioned, this would also cause the blockchain to grow faster than is likely sustainable for healthy node decentralization.

2). Let say if we don't have to worry about the trust issue,  in theory we only need one, or perhaps two confirmations right ?  So for the remaining 51% confirmations is essentially to ensure that there's  no cheating could happen.  I got that so far...

Yes. In practice you can very well accept small transactions with just one confirmation. If it weren't for a full mempool, even zero confirmations would be fine for some cases.

3). But what if we could accomplish item#1 and #2 in 5 minutes, 3 minutes or even 30 seconds - shouldn't that be a good thing ?  Why make it more difficult, delay until 10 minutes and empowering expensive equipment ? That seems to feed into the endless cycles of who's got bigger and faster mining capability?  Understand that it seems to justify the rise in bitcoin price...

Hashrate will always be a reflection of Bitcoin's price and the size of its block rewards / transaction fees. As long as its profitable to squeeze some more miners in, that's exactly what's going to happen. Block intervals have little to do with mining profitability and reducing block intervals would not cause a decrease in hashrate.

All things equal, the only way to reduce electricity spent on Bitcoin is by reducing the block reward. Which is exactly what is happening every ~4 years. It's just that Bitcoin's price and thus mining profitability has always managed to keep up with the decline of mining profitability caused by the halvings -- and then some.

4). What about making the 51st % node (with the longest chain) to be a lucky lottery winner and avoid increasing the difficulty level and eliminate  the need for fancy equipment and energy burning all together -wouldn't that be more fair and efficient ways to utilize energy and resources ? At the same time avoiding the centralization of miners all together ??

I don't understand what you are trying to suggest. What, according to your definition, would be the 51st % node? Every node follows the longest chain. Every miner that creates a new block by definition has prolonged the longest chain and thus created the longest chain.

[Anarc Senior]

Thank you Gentlemen:  for your informative and kind responses.  As you could tell that I still have a lot to learn, but better late than never...

Regarding the item #4, forgive for being confused about how a Block get confirmed and awarded to a miner...I read somewhere that it would take 51% of nodes to confirm a block, but I think that 51% only applies to forks perhaps ?

If I understand correctly now, the block with longest chain won the rewards after ~ 10 minutes.

I'm still trying to figure that if it is possible that miners to win rewards purely base on randomness- like a lottery, rather than base on how expensive, and high power equipment...essentially leveling the playing field.  Wouldn't that eliminate the unfair advantage of large mining companies vs smaller individual miner  ?  And decentralize the mining portion of blockchain ?  I just don't think adjusting the difficulty level is the most sufficient way to confirm blockchain ?

On a good note:  I finally get a round to setup my MacBook Pro to be a bitcoin core full node...

Thanks

[master2080]

A miner gets a 'reward' after confirming a block and adding it to the chain, then after 101 confirmations he may use those rewards.

Until then, he is unable to spend the reward.

The 51% is regarding forks mostly, which directly influences who gets the reward for a certain block.

I'm still trying to figure that if it is possible that miners to win rewards purely base on randomness- like a lottery, rather than base on how expensive, and high power equipment...essentially leveling the playing field.

Of course you can. Mining is basically a lottery anyway, better equipment just lets you buy more tickets.

[mobi1981]

A miner gets a 'reward' after confirming a block and adding it to the chain, then after 101 confirmations he may use those rewards.

Until then, he is unable to spend the reward.

The 51% is regarding forks mostly, which directly influences who gets the reward for a certain block.

I'm still trying to figure that if it is possible that miners to win rewards purely base on randomness- like a lottery, rather than base on how expensive, and high power equipment...essentially leveling the playing field.

Of course you can. Mining is basically a lottery anyway, better equipment just lets you buy more tickets.

in current situation, do u still think mining is good in BTC?

[Andre_Goldman]

I apologize if I ask the following  obvious questions and perhaps risk wasting everyone's time.  But, I have these nagging questions for a while now:

1).  As I understand it, the 10 minutes delay is to create a new block that there's enough/ sufficient time to fill and confirm the transactions (globally).  But isn't it quite wasteful to keep adjusting the difficulty level to maintain the 10 minutes delay ?  What is so special about the 10 minutes delay?  Has there been any study to quantify more accurately the amount of time to reach the nodes globally ?

globally
That is a tough question ... are we talking about users ? nodes ? tx's ? if we talking about scale we need a metric isn't it ?

[Monartis]

Certainly feels like the issue of energy consumption in relation to Bitcoin has been rising up the agenda and that change is probably needed sooner, rather than later.

[donovank]

You can act as a node in the network, checking for added blocks in the blockchain sequences.

[Anarc Senior]

Of course you can. Mining is basically a lottery anyway, better equipment just lets you buy more tickets.
[/quote]

I wish better equipment is just simply buying more tickets - but we all know there's more to it...they essentially force all individual miners out of business - they change the way the lottery being drawn, they have the power to (almost successfully) changing the lottery rules of engagement...I don't think this is just a simple case of buying more tickets in hoping to get a better change of winning at the present time, but to influent the future winning.  Specifically in favor for one group of people vs the rest of the population.  We could call it what ever we'd like, but in reality, it is just flat out monopoly !

I also know enough to embrace the idea of competition and reward to advance technology and serve the common interests.  But competition should not impede progress, as some of us whose have been around long enough to see the effect of VHS vs Beta format or Windows vs Linus...and having to cough up to $300 for a marginal operating software for your PC.

[ranochigo]

1).  As I understand it, the 10 minutes delay is to create a new block that there's enough/ sufficient time to fill and confirm the transactions (globally). But isn't it quite wasteful to keep adjusting the difficulty level to maintain the 10 minutes delay ?

Why would it be? It's there also to ensure that the supply of Bitcoins would be evenly distributed.

What is so special about the 10 minutes delay?  Has there been any study to quantify more accurately the amount of time to reach the nodes globally ?

I believe that Satoshi chose this specific amount of time so that there would be lesser number of orphans blocks. If the intervals of the blocks gets too fast, then there is a higher chance with two or more miner generating a block at the same block height. This would pose as a risk for merchants, I'll explain more below.

2). Let say if we don't have to worry about the trust issue,  in theory we only need one, or perhaps two confirmations right ?  So for the remaining 51% confirmations is essentially to ensure that there's  no cheating could happen.  I got that so far...

In theory, you don't need any, if you have no trust issue. Confirmation is just a way to imprint transactions into the Blockchain. Once its included in a block, it is inside the Blockchain and you need immense power to reverse it. There's no such thing as 51% of confirmation.

Anyway, just to elaborate on the point I made before this quote. Imagine that there's two forks at the same block height of 15. One of the blocks has transaction A inside it and the other doesn't. If the difficulty of producing blocks is low, then the fork could potentially grow. If at any point, either of the fork overtakes the other, the slower chain would be orphaned. If transaction A was included in the orphaned chain, it would be back to unconfirmed and anyone can double spend it. With a longer interval, this would have a lesser chance of happening.

3). But what if we could accomplish item#1 and #2 in 5 minutes, 3 minutes or even 30 seconds - shouldn't that be a good thing ?  Why make it more difficult, delay until 10 minutes and empowering expensive equipment ? That seems to feed into the endless cycles of who's got bigger and faster mining capability?  Understand that it seems to justify the rise in bitcoin price...

Of course, of course. First of all, we are trading something for Bitcoin and in this case, miners are giving up their electricity and investments to try to earn Bitcoins. If everyone were to be able to generate the same amount of Bitcoin as before, there would be zero point of mining. If I can generate 1 coin at 1GH/s my whole life, Bitcoin wouldn't have the value it has today, nothing near it.

Refer to point 2 and 1. If you're having better hardware, you should be receiving more proportionately. Doesn't make sense for anyone to develop miners if you don't get more for having faster miners.

4). What about making the 51st % node (with the longest chain) to be a lucky lottery winner and avoid increasing the difficulty level and eliminate  the need for fancy equipment and energy burning all together -wouldn't that be more fair and efficient ways to utilize energy and resources ? At the same time avoiding the centralization of miners all together ??

Honestly, I really don't get what is a 51% node. It doesn't make sense at all.

Regarding the item #4, forgive for being confused about how a Block get confirmed and awarded to a miner...I read somewhere that it would take 51% of nodes to confirm a block, but I think that 51% only applies to forks perhaps ?

If I understand correctly now, the block with longest chain won the rewards after ~ 10 minutes.

Given that you have 2 forks A & B. If you mine a block on fork A such that it becomes longer than fork B, you will get the reward and the other chain is orphaned, vice versa.

I'm still trying to figure that if it is possible that miners to win rewards purely base on randomness- like a lottery, rather than base on how expensive, and high power equipment...essentially leveling the playing field.  Wouldn't that eliminate the unfair advantage of large mining companies vs smaller individual miner  ?  And decentralize the mining portion of blockchain ?  I just don't think adjusting the difficulty level is the most sufficient way to confirm blockchain ?

I don't see any reason to make mining a lottery game. Mining should always be based on the amount of power a miner has. If you don't have sufficient amount of money or land, don't mine Bitcoins.

I wish better equipment is just simply buying more tickets - but we all know there's more to it...they essentially force all individual miners out of business - they change the way the lottery being drawn, they have the power to (almost successfully) changing the lottery rules of engagement...I don't think this is just a simple case of buying more tickets in hoping to get a better change of winning at the present time, but to influent the future winning.  Specifically in favor for one group of people vs the rest of the population.  We could call it what ever we'd like, but in reality, it is just flat out monopoly !

Of course. We are using a "currency", not some game credits. If you have more power, of course you have a higher chance. The mining process is totally dependent on how much hashpower you have or how many hashes can you try.

Isn't it well known that you would get better rates by ordering a bulk of stuff? If you want to have the same advantage as them, get a huge warehouse, loads of electricity and loads of ASICs.

I also know enough to embrace the idea of competition and reward to advance technology and serve the common interests.  But competition should not impede progress, as some of us whose have been around long enough to see the effect of VHS vs Beta format or Windows vs Linus...and having to cough up to $300 for a marginal operating software for your PC.

You can still mine Bitcoins, why not? Just get an ASIC.

If there is a higher hashrate overall, the difficulty of anyone executing a 51% attack is harder. I don't see anything bad with helping to secure the network even if it means I can't get free Bitcoins.

[brontosaurus]

I apologize if I ask the following  obvious questions and perhaps risk wasting everyone's time.  But, I have these nagging questions for a while now:

1).  As I understand it, the 10 minutes delay is to create a new block that there's enough/ sufficient time to fill and confirm the transactions (globally).  But isn't it quite wasteful to keep adjusting the difficulty level to maintain the 10 minutes delay ?  What is so special about the 10 minutes delay?  Has there been any study to quantify more accurately the amount of time to reach the nodes globally ?

See to maintain an equilibrium between the swiftness of transactions and limited supply of bitcoin this delay of 10 minutes was set. If there would have been no delay time miners could have even found hundreds of blocks within seconds using the current amount of technology. Moreover the problem of blocks with quite less or even zero number of transactions would also increase. Such blocks would just add some wasteful load over the network.

2). Let say if we don't have to worry about the trust issue,  in theory we only need one, or perhaps two confirmations right ?  So for the remaining 51% confirmations is essentially to ensure that there's  no cheating could happen.  I got that so far...

Ofcourse its possible but have you ever heard about reversal of transactions? Any bitcoin transaction processed can be manipulated and reversed by someone with good amount of computing power and knowledge. More amount of confirmations make sure that the block becomes almost immovable thus no way to reverse the transactions. Generally 6 confirmations are considered quite good.

3). But what if we could accomplish item#1 and #2 in 5 minutes, 3 minutes or even 30 seconds - shouldn't that be a good thing ?  Why make it more difficult, delay until 10 minutes and empowering expensive equipment ? That seems to feed into the endless cycles of who's got bigger and faster mining capability?  Understand that it seems to justify the rise in bitcoin price...

Yes, we could but the problem would be the same you will see more amount of blocks with lesser transactions getting confirmed things are not going to change because ultimately one block would contain lesser number of transactions which need to be in same number of blocks to get all confirmations.

4). What about making the 51st % node (with the longest chain) to be a lucky lottery winner and avoid increasing the difficulty level and eliminate  the need for fancy equipment and energy burning all together -wouldn't that be more fair and efficient ways to utilize energy and resources ? At the same time avoiding the centralization of miners all together ??

But it would decrease the amount of competitiveness in mining. More number of miners will enter the market. Infact everyone would just leave everything and mine because its a "chance" that they might find some bitcoin out of this task with no increased efforts in technology. Along with making bitcoin decentralize it will eliminate its whole purpose to be used as currency.

[Anarc Senior]

But it would decrease the amount of competitiveness in mining. More number of miners will enter the market. Infact everyone would just leave everything and mine because its a "chance" that they might find some bitcoin out of this task with no increased efforts in technology. Along with making bitcoin decentralize it will eliminate its whole purpose to be used as currency.
[/quote]

I disagree:  what you described is actually an  "unfair competitive advantage" not "competitive".  The more people whose get an opportunity to participate, the more competitive it would become, not less.  If you create a higher barrier to entry for mining, you are not being competitive, you are a monopoly- same as cheating...

Not to be confused between "better technology" vs more capital to purchase large mining farm...

[ranochigo]

I disagree:  what you described is actually an  "unfair competitive advantage" not "competitive".  The more people whose get an opportunity to participate, the more competitive it would become, not less.  If you create a higher barrier to entry for mining, you are not being competitive, you are a monopoly- same as cheating...

Not to be confused between "better technology" vs more capital to purchase large mining farm...

Anyone can mine, its just who would profit more. Mining isn't a way to get easy money. Think about it, the purpose of proof of work is to distribute coin with the concept of it being difficult in mind. If you have more resources, you would obviously be able to get more stuff. In Bitcoin, the competitiveness of mining is with who has more hashrate and not how many people are able to mine. We don't need it to competitive either.

Okay, lets put all that aside. If you were to let everyone generate Bitcoins, how do you make Bitcoin so scarce? It would simply defeat the purpose of having a fixed market cap and is essentially just your traditional fiat isn't it?

[Anarc Senior]

I disagree:  what you described is actually an  "unfair competitive advantage" not "competitive".  The more people whose get an opportunity to participate, the more competitive it would become, not less.  If you create a higher barrier to entry for mining, you are not being competitive, you are a monopoly- same as cheating...

Not to be confused between "better technology" vs more capital to purchase large mining farm...

Anyone can mine, its just who would profit more. Mining isn't a way to get easy money. Think about it, the purpose of proof of work is to distribute coin with the concept of it being difficult in mind. If you have more resources, you would obviously be able to get more stuff. In Bitcoin, the competitiveness of mining is with who has more hashrate and not how many people are able to mine. We don't need it to competitive either.

Okay, lets put all that aside. If you were to let everyone generate Bitcoins, how do you make Bitcoin so scarce? It would simply defeat the purpose of having a fixed market cap and is essentially just your traditional fiat isn't it?

The rate of bitcoin being produced is absolutely fixed - currently it is approximately 12.5 bitcoins can be harvested every 10 minutes.  That is not the debate here !  The question here is how and who get to earn them ?  Do we want a few large conglomerates mining companies to control the mining or the larger population whose could get a shot at earning the Bitcoins ??

[ranochigo]

The rate of bitcoin being produced is absolutely fixed - currently it is approximately 12.5 bitcoins can be harvested every 10 minutes.  That is not the debate here !  The question here is how and who get to earn them ?  Do we want a few large conglomerates mining companies to control the mining or the larger population whose could get a shot at earning the Bitcoins ??

Obviously. Aren't you suggesting that we don't adjust the difficulty of Bitcoin such that it never changes so everyone can have a chance at earning a decent amount of Bitcoin?

I'm talking about market cap. That is the factor that you are influencing. By fixing the difficulty and not changing the block reward, you are essentially increasing the market cap. Even if you're not fixing the difficulty, based on your motivations, you are still increasing the market cap. That is the main issue here.

Of course we want it to be decentralised. So do we want Bitcoin to be stable and secure or would you want an altcoin which everyone can easily obtain and is very unstable and insecure? The tradeoff for only mining to be controlled by a minority is that most people can't mine. I don't see anything bad in that. Want to make money? Invest some resources. It doesn't grow on trees.

The point is, with more resources, you are sure to do better. That's the basics. If you restrict it to CPU mining only, such that most people can mine it, botnet owners would have a great time counting money.

[brontosaurus]

But it would decrease the amount of competitiveness in mining. More number of miners will enter the market. Infact everyone would just leave everything and mine because its a "chance" that they might find some bitcoin out of this task with no increased efforts in technology. Along with making bitcoin decentralize it will eliminate its whole purpose to be used as currency.

I disagree:  what you described is actually an  "unfair competitive advantage" not "competitive".  The more people whose get an opportunity to participate, the more competitive it would become, not less.  If you create a higher barrier to entry for mining, you are not being competitive, you are a monopoly- same as cheating...

Not to be confused between "better technology" vs more capital to purchase large mining farm...
[/quote]
What I wanted to say with decreased competitiveness was that the quality of competition would fall because the new entrants would not be able to bring equal amount of capital. Better technology doesn't gets build up in the air. One has to invest capital to gain certain technology. But what I meant was that making it like lottery system would decrease the motivational incentive as people would become reluctant in becoming new technology because rewards would be based merely on who mines the 51st block.

But if you say that we can normalize difficulty then this would merely bring everyone on mining. And if we imagine a whole crypto world. Everyone would just do mining with their personal computers in hand. There just won't be any other job. By employing everyone on same job you can't say that you are increasing competition to make bitcoin decentralized.

[Anarc Senior]

The rate of bitcoin being produced is absolutely fixed - currently it is approximately 12.5 bitcoins can be harvested every 10 minutes.  That is not the debate here !  The question here is how and who get to earn them ?  Do we want a few large conglomerates mining companies to control the mining or the larger population whose could get a shot at earning the Bitcoins ??

Obviously. Aren't you suggesting that we don't adjust the difficulty of Bitcoin such that it never changes so everyone can have a chance at earning a decent amount of Bitcoin?

I'm talking about market cap. That is the factor that you are influencing. By fixing the difficulty and not changing the block reward, you are essentially increasing the market cap. Even if you're not fixing the difficulty, based on your motivations, you are still increasing the market cap. That is the main issue here.

Of course we want it to be decentralised. So do we want Bitcoin to be stable and secure or would you want an altcoin which everyone can easily obtain and is very unstable and insecure? The tradeoff for only mining to be controlled by a minority is that most people can't mine. I don't see anything bad in that. Want to make money? Invest some resources. It doesn't grow on trees.

The point is, with more resources, you are sure to do better. That's the basics. If you restrict it to CPU mining only, such that most people can mine it, botnet owners would have a great time counting money.

You seems to make one point, which perhaps could be true:  but we need concrete evidences to be convinced:

1). Consider the hash rate and its level of difficulty is within a black box:  from the end users standpoint, there are 12.5 bitcoins being produced every 10 minutes - no more, no less.  I cannot fatom or see any clear evidence that the higher hash rate, difficulty would directly correlate to a larger market cap of bitcoin ??

2). I don't believe for one second that more powerful and faster computers is the absolute single solution to have a secured blockchain, which would maintains its scarcity and holding its high value.  IMHO, higher hash rate is unnecessary and a completely waste of time and energy - its sole purpose is merely to give people a delusional
perceptions of some "intrinsic values" built in with the newly mined bitcoins with the higher hashrate and high level of difficulty !!  Which we all know is a complete BS !

3). More expensive equipment  and larger pool of miners do not equate to true technological innovation- let more general population in the task and soon there will be true competitition and innovation emerging...

[/quote] The tradeoff for only mining to be controlled by a minority is that most people can't mine. I don't see anything bad in that. Want to make money? Invest some resources. It doesn't grow on trees.[/quote]. You have jut described a text book definition of Centralization !

[haltingprobability]

Wow, a lot of bolded text in this thread... 

Regarding the item #4, forgive for being confused about how a Block get confirmed and awarded to a miner...I read somewhere that it would take 51% of nodes to confirm a block, but I think that 51% only applies to forks perhaps ?

51% is theoretical. Each node makes an independent choice of which chain to follow. We expect that full nodes will always follow the chain with longest proof-of-work, among valid chains (invalid chains will be rejected by all nodes). It can happen that two valid blocks are mined almost simultaneously. Rather than trying to figure out "which block was really mined first", the network just waits to see which block will get extended by the mining nodes. So, if A&B appear almost simultaneously, then the network will wait for C to appear - C must either extend A or extend B. This can happen multiple times and the network will handle it just fine, although affected transactions will be in an uncertain status until the chain is fully resolved. This is why large transactions need to wait at least 6 blocks (1 hour) to confirm.

I'm still trying to figure that if it is possible that miners to win rewards purely base on randomness- like a lottery, rather than base on how expensive, and high power equipment...essentially leveling the playing field.

Bitcoin mining is a lottery, a distributed lottery. You get lottery tickets by running mining equipment. The more mining equipment you run and the faster your mining equipment, the more tickets you are scratching. So, miners will build as many machines as is profitable given electricity price versus block reward + tx fees so they can scratch as many lottery tickets as possible.

Wouldn't that eliminate the unfair advantage of large mining companies vs smaller individual miner  ?  And decentralize the mining portion of blockchain ?  I just don't think adjusting the difficulty level is the most sufficient way to confirm blockchain ?

There is no unfair advantage. You can mine Bitcoins for about $4k - just buy a mining rig and join a mining pool.

[Anarc Senior]

The point is, with more resources, you are sure to do better. That's the basics. If you restrict it to CPU mining only, such that most people can mine it, botnet owners would have a great time counting money.

This reminds me a lot of the same argument about Gun Control:  " let's take all the guns from the law abiding citizens in America, then we are all going to be extremely safe !!"