Anyone whose own some fair amount of bitcoins should also own a mining machine

[Anarc Senior]

Considering the big threat of decentralization of bitcoin blockchain.  Doesn't it make a lot of sense for people whose a fair amount of bitcoin should at least operate one bitcoin miner machine ?  Considering the high fee and transactions unconfirmed...I am so sick of it and on the verge of pulling the trigger in purchasing one bitcoin miner for my home residence.  I'm not talking about running it for profit or as a business...I'll be happy to break even and accumulate some bitcoin to HODL !! Don't we want to take control of our bitcoin investment and its future ? We wouldn't have the high fee stuck on the blockchain of unconfirmed transactions.

Imagine million of bitcoin owner now could operate our own miner and have a stake in determining the bitcoin/ blockchain  future ?? People are complaining about the problem that bitcoin facing but yet they wouldn't lift their finger to do anything...

Can somebody here, whose running their single miner in their own private home - please share us the detail and how you are making it !!

Anybody whose own 10 or more bitcoins should buy one miner machine - what do you think ?

[Xynerise]

Mining is complex business.
There's electricity and heat costs, and even though you say you're not running it for a profit these costs can lead to a substantial loss(depending on where said person lives) which doesn't make it worthwhile.

Also having just one miner won't give you any substantial hashrate so I fail to see the point of buying one in the first place.
If the total hashrate of the network was low enough that having just one miner would give you a decent shot at finding a block then it would be a good idea, otherwise it's pointless, really.
Running a bunch of low hashrate miners doesn't give you a shot at finding a block so it doesn't make mining "more decentralised"

Ditto with forming or joining a pool, if the pool gets big enough it leads to the same problems you're trying to solve.

We wouldn't have the high fee stuck on the blockchain of unconfirmed transactions.

Increasing hashrate does nothing to unconfirmed transactions.
Unconfirmed transactions are as a result of the bitcoin block size (now block weight)
There will always be an average of 1 block every 10 minutes no matter the hashrate -- even if we could harness the full energy of the sun.

If you want lower fees then use segwit and tell others to use it also.

[Spendulus]

....

Anybody whose own 10 or more bitcoins should buy one miner machine - what do you think ?

No. I have some silver coins, but no silver mine.

....
If you want lower fees then use segwit and tell others to use it also.

Segwit does not solve the fee problem. This is simply mis information. A reduction in fees of 30-40% is not material.

The levels of fees have utterly destroyed large parts of the bitcoin economy, and segwit does not change that. Cutting fees to 1/10 of current levels does not change this.

Fees would have to go to 1/100 - 1/1000 of current levels for the old bitcoin economy to arise again.

I'm talking buying beers, pizzas, tipping on line, Starbucks gift cards, etc.

[Xynerise]

....
If you want lower fees then use segwit and tell others to use it also.

Segwit does not solve the fee problem. This is simply mis information. A reduction in fees of 30-40% is not material.

To rephrase your statement: "Reduction of fees does not solve the fee problem."

The levels of fees have utterly destroyed large parts of the bitcoin economy, and segwit does not change that. Cutting fees to 1/10 of current levels does not change this.

Fees would have to go to 1/100 - 1/1000 of current levels for the old bitcoin economy to arise again.

Segwit DOES cause fee reduction in the long run: because segwit transactions are smaller, more of them can fit in a block.

To better illustrate the point, assume that all transactions in the block are segwit transactions with 1 input and 1 output.
There will be ~12,195 transactions that can be contained in that block, compared to ~5,208 non segwit transactions of the same type

I'm talking buying beers, pizzas, tipping on line, Starbucks gift cards, etc.

You forgot to add coffee...

[Crypto Lion]

It makes sense that someone should have a Bitcoin mining machine, but it's better for long term investing. You're going to end up losing money on energy, and mine about .00053BTC after 3 months which wouldn't be that worthwhile in my opinion.

Now if you were able to mine altcoins, you might be able to gain something there. But still, it will take a long time before you break even doing this method.

 

[hatshepsut93]

Imagine million of bitcoin owner now could operate our own miner and have a stake in determining the bitcoin/ blockchain  future ?? People are complaining about the problem that bitcoin facing but yet they wouldn't lift their finger to do anything...

It seems like you are thinking that miners are in charge of Bitcoin and decide its rules and maybe even can do whatever they want with the network, right? This is a very common misunderstanding, Bitcoin has a pretty complex balance of powers, and miners are only a one part of it. First, you should know that miners can only create new blocks that are later validated by every participant of the network - they can't change the rules or spend someone's coins without signatures. So, every user who runs a full node also has a "vote" in Bitcoin's protocol, because the network nodes is one of the elements that makes Bitcoin decentralized and valuable. Also, miners are simply following the most profitable coin, so wealth in a form of cryptocurrency or fiat can be used to create incentives for miner - miners are not attacking or abandoning Bitcoin even if they really want to, because it's more profitable to be honest. And developers are also playing big role in consensus - Bitcoin is valuable because it has the best cryptocurrency developers in the world, so when miners try to create an altcoin, like they did with Bcash, most people don't take it seriously because it is developed by unknown people without any track record.

[Anarc Senior]

All these technical talks really confused the heck out of everbody- let's keep it simple:

1). If all the sudden we double the miners on the blockchain -  Please stop zooming in to the details, such as how difficult to get ASIC machines, blah blah blah.  Let's take a straight senerio where if we double up the miners in blockchain, it will definitely reduce the blockchain back log - by simple supply/ demand law it will reduce fees and less unconfirmed transactions - period !

2). Please keep in mind I'm not talking about the additional private miners for profit or become a business.  I'm only talking about bitcoin owners running mining machines to protect their bitcoins investment and defend the only true decentralization cryptocurrency vs the rest of fake centralized cryptocurrencies.  This is sad that I have to use the term "decentralized cryptocurrency", which is kind of redundant - as there are so many fake cryptocurrencies that are,  in true mean are not cryptocurrencies at all !

3). Now if there are more miners on blockchain, I suppose you'd get less chance of winning bitcoin, but you are not seaking for profit and just simply trying keep the blockchain decentralized and protect your bitcoin investment, think it would worth the effort...

[hatshepsut93]

All these technical talks really confused the heck out of everbody- let's keep it simple:

1). If all the sudden we double the miners on the blockchain -  Please stop zooming in to the details, such as how difficult to get ASIC machines, blah blah blah.  Let's take a straight senerio where if we double up the miners in blockchain, it will definitely reduce the blockchain back log - by simple supply/ demand law it will reduce fees and faster transactions - period !

2). Please keep in mind I'm not talking about the additional private miners for profit or become a business.  I'm only talking about bitcoin owners running mining machines to protect their bitcoins investment and defend the only true decentralization cryptocurrency vs the rest of fake centralized cryptocurrencies.  This is sad that I have to use the term "decentralized cryptocurrency", which is kind of redundant - as there are so many fake cryptocurrencies that are,  in true mean are not cryptocurrencies at all !

1) I'm sorry, but you really don't understand the most basic things in Bitcoin's protocol. We have backlog of transactions and high fees because blockspace is limited, which is a resource of full nodes, not miners. Adding more miners would have absolutely zero effect on it, because the algorithm adjust the difficulty to have a block every 10 minutes on average, in case you think that more miners = faster blocks or something.

2) Mining is already pretty centralized, 70-80% of hashpower might easily become a single entity. Bitcoin is decentralized thanks to full nodes, because they enforce the network rules, which prevents miners from doing whatever they want. It would be good to have a decentralized mining, but Bitcoin is not in danger of centralization right now.

[Anarc Senior]

All these technical talks really confused the heck out of everbody- let's keep it simple:

1). If all the sudden we double the miners on the blockchain -  Please stop zooming in to the details, such as how difficult to get ASIC machines, blah blah blah.  Let's take a straight senerio where if we double up the miners in blockchain, it will definitely reduce the blockchain back log - by simple supply/ demand law it will reduce fees and faster transactions - period !

2). Please keep in mind I'm not talking about the additional private miners for profit or become a business.  I'm only talking about bitcoin owners running mining machines to protect their bitcoins investment and defend the only true decentralization cryptocurrency vs the rest of fake centralized cryptocurrencies.  This is sad that I have to use the term "decentralized cryptocurrency", which is kind of redundant - as there are so many fake cryptocurrencies that are,  in true mean are not cryptocurrencies at all !

1) I'm sorry, but you really don't understand the most basic things in Bitcoin's protocol. We have backlog of transactions and high fees because blockspace is limited, which is a resource of full nodes, not miners. Adding more miners would have absolutely zero effect on it, because the algorithm adjust the difficulty to have a block every 10 minutes on average, in case you think that more miners = faster blocks or something.

2) Mining is already pretty centralized, 70-80% of hashpower might easily become a single entity. Bitcoin is decentralized thanks to full nodes, because they enforce the network rules, which prevents miners from doing whatever they want. It would be good to have a decentralized mining, but Bitcoin is not in danger of centralization right now.

Sorry I didn't correct my mistake soon enough in stating "fast transaction" I stand corrected- more miners doesn't help speed up transaction- however it will help reduce unconfirmed transactions- especially if people are willing to accept not winning the blocks in exchange to protect their investment and blockchain future as a whole

[Spendulus]

....
If you want lower fees then use segwit and tell others to use it also.

Segwit does not solve the fee problem. This is simply mis information. A reduction in fees of 30-40% is not material.

To rephrase your statement: "Reduction of fees does not solve the fee problem."

The levels of fees have utterly destroyed large parts of the bitcoin economy, and segwit does not change that. Cutting fees to 1/10 of current levels does not change this.

Fees would have to go to 1/100 - 1/1000 of current levels for the old bitcoin economy to arise again.

Segwit DOES cause fee reduction in the long run: because segwit transactions are smaller, more of them can fit in a block.

To better illustrate the point, assume that all transactions in the block are segwit transactions with 1 input and 1 output.
There will be ~12,195 transactions that can be contained in that block, compared to ~5,208 non segwit transactions of the same type

I'm talking buying beers, pizzas, tipping on line, Starbucks gift cards, etc.

You forgot to add coffee...

Please read before you post. But I'll repeat and rephrase.

Even if Segwit enables reductions in fees by 30-70%, this does not solve the problem with Bitcoin's fees having killed the entire ecosystem of transactions in the 0.01-$100.00 price range.

However, should Segwit enable more transactions and hence fees tend downward, strong evidence exists that a huge latent demand would enter in and simply push the fees back up. The resulting equilibrium would be something like double the activity with fee levels the maximum that would be tolerated by an open market in such conditions.

LN does seem to address this issue because people are "able to transact with bitcoin at low fees and huge volume." Although they are not interacting with the blockchain, end users don't care. The nerdy crypto nerds want to go in and buy their coffee with Bitcoin.

[ranochigo]

All these technical talks really confused the heck out of everbody- let's keep it simple:

1). If all the sudden we double the miners on the blockchain -  Please stop zooming in to the details, such as how difficult to get ASIC machines, blah blah blah.  Let's take a straight senerio where if we double up the miners in blockchain, it will definitely reduce the blockchain back log - by simple supply/ demand law it will reduce fees and less unconfirmed transactions - period !

A block can only fit that many transactions. By the protocol rules, the block target is adjusted such that it would have close to 10 minutes per block.

You won't reduce the unconfirmed transactions by any amount. The effect is only there for at most 2016 blocks. Please read the responses again.

2). Please keep in mind I'm not talking about the additional private miners for profit or become a business.  I'm only talking about bitcoin owners running mining machines to protect their bitcoins investment and defend the only true decentralization cryptocurrency vs the rest of fake centralized cryptocurrencies.  This is sad that I have to use the term "decentralized cryptocurrency", which is kind of redundant - as there are so many fake cryptocurrencies that are,  in true mean are not cryptocurrencies at all !

I don't expect anyone to spend hundreds of dollars, time and electricity to do something like this. Not everyone should run a miner.

3). Now if there are more miners on blockchain, I suppose you'd get less chance of winning bitcoin, but you are not seaking for profit and just simply trying keep the blockchain decentralized and protect your bitcoin investment, think it would worth the effort...

Wait, so is Bitcoin losing value because of it not being as decentralised as you want?

The problem is Bitcoin can never be truly decentralised. Running a miner not for profit doesn't make sense for anyone. I don't fancy having a noisy miner beside me which doesn't make a profit nor difference and just make the ASIC manufacturer even richer.

[DannyHamilton]

more miners . . . will help reduce unconfirmed transactions- especially if people are willing to accept not winning the blocks in exchange

You are incorrect.  You should probably take a little bit of time and effort and learn how the bitcoin confirmation process actually works if you are going to try and make suggestions about how to improve it.

If you instantly multiply the current amount of hash power by 4 immediately after a difficulty target adjustment, it would have a VERY short term effect of reducing unconfirmed transactions for the next 3.5 days.  Then the difficulty would re-adjust and the number of unconfirmed transactions would go right back to what it was.

I'm not talking about running it for profit or as a business...I'll be happy to break even

Unless you have access to the newest ASIC miners AND cheap electricity,  you will probably LOSE MONEY mining.  You will not "break even".  The amount you will lose will depend on how much mining you chose to do (more mining results in losing more money).

We wouldn't have the high fee stuck

The fee would not change at all.  It would have ZERO effect on the fee.

[Kprawn]

Even with a ASIC miner, most people still lose money in the long-run on Bitcoin. The difficulty adjustment and the amount of

hashing that are added, is just unreal. You can run a FULL Node to support the network, but it will not have an affect on the

miners fees. {As a individual, you are a drop of water in a lake}  

http://www.newsbtc.com/2016/05/26/brief-history-bitcoin-bitcoin-mining/

[gentlemand]

Bitcoin should not depend on the charity of its users. If that's what it takes to be healthy then its doom is already sealed.

Mining centralisation wasn't expected and is undoubtedly the biggest issue it's facing. If the incentives can't iron that out then this whole thing is an experiment that'll fail anyway. Better to get it over and done with rapidly.

[audaciousbeing]

Considering the big threat of decentralization of bitcoin blockchain.  Doesn't it make a lot of sense for people whose a fair amount of bitcoin should at least operate one bitcoin miner machine ?  Considering the high fee and transactions unconfirmed...I am so sick of it and on the verge of pulling the trigger in purchasing one bitcoin miner for my home residence.  I'm not talking about running it for profit or as a business...I'll be happy to break even and accumulate some bitcoin to HODL !! Don't we want to take control of our bitcoin investment and its future ? We wouldn't have the high fee stuck on the blockchain of unconfirmed transactions.

Imagine million of bitcoin owner now could operate our own miner and have a stake in determining the bitcoin/ blockchain  future ?? People are complaining about the problem that bitcoin facing but yet they wouldn't lift their finger to do anything...

Can somebody here, whose running their single miner in their own private home - please share us the detail and how you are making it !!

Anybody whose own 10 or more bitcoins should buy one miner machine - what do you think ?

I completely agree with you that until we start helping ourselves the better for us and for bitcoin also. Today we blame the miners for being greedy or even dumping bitcoin for other profitable coins in their own opinion, again we have read about the proposed crack down of bitcoin mining from China which will mean a lot of doom if that should happen. In some part of the world, people don't want for government to provide basic things for them. They have gardens at the back of their houses to plant fruits, there is borehole to provide water, there are community schools etc.

The moment we can all have a miner even a solo one that I can confirm my transaction, we have less issue to higher about as it relates to bitcoin.

[squatter]

....

Anybody whose own 10 or more bitcoins should buy one miner machine - what do you think ?

No. I have some silver coins, but no silver mine.

This is true, but it only applies to Bitcoin to an extent. Silver doesn't entail a digital network whose transactions are published by miners.

I believe we are in a growth/hype phase where mining concentration is driven only by ability to cheaply manufacture ASICs and cheap/subsidized electricity. However, it seems clear that we are transitioning to an era where government regulation is deeply affecting the ecosystem. Consider the Chinese crackdown on mining (including electricity subsidies). Canada is increasingly seen as attractive from a regulatory standpoint (in addition to cheap hydropower in certain localities).

But in this context, it is increasingly important to consider nation-state attacks and censorship. Bitcoin cannot be a store-of-value (or useful) if typical users cannot transact. There must be network liquidity. There must be a competitive mining ecosystem to prevent censorship. The consequences of lacking such (particularly due to Bitmain's dominance) may become clearer over time.

ASIC mining may not be profitable for casual users. But consider three things. First, this never-ending trend in difficulty increase (the growth hype phase mentioned above) will not last forever. The time to invest is when blood is in the streets, not when hype is at its peak. Second, "profitability" should not only be considered on a short term overhead basis. Consider mining as a long term investment, not some immediate USD ROI. Also, consider it as an investment in the currency, since decentralized mining is required to secure Bitcoin from majority-miner attacks. Third, consider potential future transactions costs, particularly large UTXO consolidations. At some point, you may need to mine (including pooling hash power) in order to ensure that your transactions are published on the network at all.

[ranochigo]

I completely agree with you that until we start helping ourselves the better for us and for bitcoin also. Today we blame the miners for being greedy or even dumping bitcoin for other profitable coins

Isn't that normal? They are trying to make a profit. Frankly speaking, no one out there would be mining Bitcoin because they want to support it. Else, they would be broke fairly quickly.

The moment we can all have a miner even a solo one that I can confirm my transaction, we have less issue to higher about as it relates to bitcoin.

Yeah and it's also the moment where the hashrate of the network is so low such that governments or any large entities can destroy Bitcoin extremely easily.  Miners aren't stupid, they want profit and most of them have Bitcoins as an investment. They wouldn't do anything that harms Bitcoin significantly. Moving to another coin doesn't count.

Bitcoin cannot be a store-of-value (or useful) if typical users cannot transact. There must be network liquidity. There must be a competitive mining ecosystem to prevent censorship. The consequences of lacking such (particularly due to Bitmain's dominance) may become clearer over time.

I just sent a transaction and it has a confirmation in 10 minutes.

ASIC mining may not be profitable for casual users. But consider three things. First, this never-ending trend in difficulty increase (the growth hype phase mentioned above) will not last forever. The time to invest is when blood is in the streets, not when hype is at its peak.

When the difficulty starts to decrease, it means that it is no longer profitable to mine Bitcoin.

Second, "profitability" should not only be considered on a short term overhead basis. Consider mining as a long term investment, not some immediate USD ROI. Also, consider it as an investment in the currency, since decentralized mining is required to secure Bitcoin from majority-miner attacks.

Unfortunately, the "profitability" in the long term will not pay for your hardware, your time nor for your electrical bills. Considering mining as a long term investment, I would rather buy Bitcoins. If the investment fails, at least I don't have a useless $1000 paperweight sitting around. Yes, decentralised mining is required to prevent 51% attack but it isn't profitable for anyone to do so. Miners certainly do not want to have millions of dollars of paperweight either.
 

Third, consider potential future transactions costs, particularly large UTXO consolidations. At some point, you may need to mine (including pooling hash power) in order to ensure that your transactions are published on the network at all.

No. You don't need any hashpower to broadcast a transaction. Unless you own at least a big farm, you won't be able to confirm your own transaction. Pools don't give a damn about their user's transactions, especially if they are small time miners. I think this argument is more towards scaling as opposed to everyone running a miner.

[veleten]

so many misconceptions about bitcoin and blockchain in one topic (for TS)
you can own the goods but not the tools,so there is no need to own a miner if you have bitcoins
10 bitcoins is more than 130.000$ at current prices,do you think every single holder bothers with mining?
as it has been mentioned above,the number of miners and the increased difficulty doesn't solve the uncofirmed backlog

[tonyja2017]

Considering the big threat of decentralization of bitcoin blockchain.  Doesn't it make a lot of sense for people whose a fair amount of bitcoin should at least operate one bitcoin miner machine ?  Considering the high fee and transactions unconfirmed...I am so sick of it and on the verge of pulling the trigger in purchasing one bitcoin miner for my home residence.  I'm not talking about running it for profit or as a business...I'll be happy to break even and accumulate some bitcoin to HODL !! Don't we want to take control of our bitcoin investment and its future ? We wouldn't have the high fee stuck on the blockchain of unconfirmed transactions.

Imagine million of bitcoin owner now could operate our own miner and have a stake in determining the bitcoin/ blockchain  future ?? People are complaining about the problem that bitcoin facing but yet they wouldn't lift their finger to do anything...

Can somebody here, whose running their single miner in their own private home - please share us the detail and how you are making it !!

Anybody whose own 10 or more bitcoins should buy one miner machine - what do you think ?

I don't think mining machine is a good method for improving your economy. I think the best method now is to study the rise and fall of bitcoin and invest in it. It's a method of earning the least amount of money but still has the words if you have smart calculations. On the mining machine, I think it costs a lot of power and reduces the life of the excavator. You should know that a bitcoin digger is not cheap.

[squatter]

Bitcoin cannot be a store-of-value (or useful) if typical users cannot transact. There must be network liquidity. There must be a competitive mining ecosystem to prevent censorship. The consequences of lacking such (particularly due to Bitmain's dominance) may become clearer over time.

I just sent a transaction and it has a confirmation in 10 minutes.

What's your point? Who suggested you couldn't? The point was about hardening Bitcoin's network from attack. You conveniently omitted from the quote the statement about considering future nation-state attacks and censorship.

ASIC mining may not be profitable for casual users. But consider three things. First, this never-ending trend in difficulty increase (the growth hype phase mentioned above) will not last forever. The time to invest is when blood is in the streets, not when hype is at its peak.

When the difficulty starts to decrease, it means that it is no longer profitable to mine Bitcoin.

Yes. And marginal miners who can't cover their overheads shut down. The difficulty will only adjust downwards until an equilibrium is met and the trend reverses. That's the entire point of the difficulty adjustment algorithm. If mining speculation far outpaces price discovery, marginal miners shut down. This isn't a permanent situation.

Second, "profitability" should not only be considered on a short term overhead basis. Consider mining as a long term investment, not some immediate USD ROI. Also, consider it as an investment in the currency, since decentralized mining is required to secure Bitcoin from majority-miner attacks.

Unfortunately, the "profitability" in the long term will not pay for your hardware, your time nor for your electrical bills.

Re-read what you quoted. Coins I mined years ago have ROI'd many times over. You're only thinking in terms of someone who immediately dumps to cover all overheads. You say you're talking about long term profitability when you're actually referring to short term profitability.

Considering mining as a long term investment, I would rather buy Bitcoins. If the investment fails, at least I don't have a useless $1000 paperweight sitting around. Yes, decentralised mining is required to prevent 51% attack but it isn't profitable for anyone to do so. Miners certainly do not want to have millions of dollars of paperweight either.

No one said it wasn't more profitable just to buy bitcoins. The theme of this thread is concentration within the mining ecosystem. Hence "consider it as an investment in the currency, since decentralized mining is required to secure Bitcoin from majority-miner attacks." The implication is that a casual mining investment will be less profitable than merely buying bitcoins. But merely holding bitcoins also gives you no say over the network. Only economically important (transacting) nodes and hash power is relevant to consensus change.
 

Third, consider potential future transactions costs, particularly large UTXO consolidations. At some point, you may need to mine (including pooling hash power) in order to ensure that your transactions are published on the network at all.

No. You don't need any hashpower to broadcast a transaction. Unless you own at least a big farm, you won't be able to confirm your own transaction. Pools don't give a damn about their user's transactions, especially if they are small time miners. I think this argument is more towards scaling as opposed to everyone running a miner.

Again, you are only thinking in terms of never-ending difficulty increase (sort of like a never-ending bull market). If you think mining speculation will always look like the 2013-2018 period, I think you are gravely mistaken. That's not how markets work.

It's predicted that ASIC fabrication will become more competitive in the future, as optimizations become increasingly difficult. That can significantly level the playing field vs. players like Bitmain. For example:

“[The 14nm chip] is a very good thing for decentralization,” explains Antonopoulos. “What it does is it extends the shelf life of mining equipment from 2-3 months of useable life cycle to almost two years, which levels the playing field among all participants in the system.”

You're also only thinking in terms of the current pool ecosystem, as if it's static. Pool incentives can certainly evolve over time to address the needs of miners. Like the exchange system, all current market participants flood to only a few entities. That may not always be true, especially if the interests of pool miners begin to diverge significantly from those of operators of prominent pools.