Collapse in mining interest could lead to the end of btc in an unexpected way

[Sjalq]

http://dot-bit.org/tools/nextDifficulty.php

There is something very interesting happening to namecoin. The surge in interest, followed by the sudden drop a few weeks ago has had the effect that difficulty has remained so high that miners are losing interest and leaving, further postponing the decrease in difficulty.

Given that most of the btc mining is for profit, the same thing might happen to btc if we see something severely affecting miners. If we lose 80% of our mining network for some reason it could take up to 10 weeks for the next difficulty adjustment. If the remaining miners then pull out since all that hard hashing isn't worth it, it would take much, much, much longer.

[pennytrader]

That can only happen if BTC loses 80% of it's current value, which is defintely a possiblity.

[NetTecture]

Gets worse, The low power also means every block takes longer, so transactions take a LOT longer to process, making Bitcoins harder to use as a currency.

Want to shut down bigcoins as a government? Do that - alternating pu a server famrm there, take it off. You will get all bitcoins every 2nd "round" and kill the network speed with variance in the meantime.

[Binford 6100]

the namecoin folk could have altered their software to adjust difficulty more often, seems like the 2016 blocks between adjustments was a conscious decission, let them live with that. they will manage eventually to finish the current difficulty's mining round

[Sjalq]

Well the cool thing is that if that were to happen, then there would be the option of adjusting the source.

[NetTecture]

the namecoin folk could have altered their software to adjust difficulty more often, seems like the 2016 blocks between adjustments was a conscious decission, let them live with that. they will manage eventually to finish the current difficulty's mining round

Quite ignorant statement, or?

I am not arguing that - and guess waht the ssame 2016 block thing is in bitcoins, but pointing out a danger. if someone adds 75 tera in one block dfficulty jumps up some times. When he goes, we are stuck witha a long slow block. Do that alternating aoud you undermine hthe viability of the currency - and take out a LOT of income from the miners, so they quit, too. The result would be a quite interesting DDOS with serious implications.
Yes, expensive. Not something governments can not just do.

[Zibbo]

And the same thing will happen after 22/07/2011, when the namecoin difficulty is finally adjusted. Assuming the price of namecoins stays the same, namecoin mining will be significantly more profitable than bitcoin mining, causing a lot of miners to switch for a few days it will take to mine 2016 namecoin blocks, making namecoin mining unprofitable again, and everyone will quit. Rinse and repeat. Same can happen with bitcoin easily enough.

There is no technical reason why difficulty can't be adjusted more often, even after every block (correct me if I'm wrong). You can still count the new difficulty from the last 2016 blocks, but just do it more often. If not every block, then something like every 6 (hour) blocks or so. I can't imagine any downside to adjusting it more often, only benefits. It would completely remove the kind of problems namecoin is having now.

[AngelusWebDesign]

But you're forgetting a major downside to adjusting every 10 blocks instead of 2016 --

Every script kiddie in the universe would have a much higher motivation to initiate DDoS attacks on the pools -- after all, they'd bring difficulty down within a short period of time, and then they could start reaping the rewards.

We don't need that!

[foggyb]

If the remaining miners then pull out since all that hard hashing isn't worth it, it would take much, much, much longer.

Why would people stop mining when many do not care whether they make a profit or not? See the Folding@Home project. They all do it for nothing.

I have 2.25 gigahash/sec mining power. My electricity is practically free. Why would I stop mining? Because its hard? Is that something new? Mining has always been hard, that's why a lot of us purchased Radeon GPU's.

There are hundreds of thousands of people with only a single GPU that will never stop mining just to keep the network alive.

[AngelusWebDesign]

If the remaining miners then pull out since all that hard hashing isn't worth it, it would take much, much, much longer.

Why would people stop mining when many do not care whether they make a profit or not? See the Folding@Home project. They all do it for nothing.

I have 2.25 gigahash/sec mining power. My electricity is practically free. Why would I stop mining? Because its hard? Is that something new? Mining has always been hard, that's why a lot of us purchased Radeon GPU's.

There are hundreds of thousands of people with only a single GPU that will never stop mining just to keep the network alive.

I agree that there are many people who mine for fun, and who will mine "for the cause" to keep the network alive.

I disagree that there are over 10,000 miners total, and that includes casual, part-time, and NVidia card/CPU miners.

Does anyone have evidence to the contrary?

[Zibbo]

But you're forgetting a major downside to adjusting every 10 blocks instead of 2016 --

Every script kiddie in the universe would have a much higher motivation to initiate DDoS attacks on the pools -- after all, they'd bring difficulty down within a short period of time, and then they could start reaping the rewards.

We don't need that!

Not true. Even if you somehow would manage to DoS the whole bitcoin network for one day, so that basically no blocks are generated, that would lower the difficulty only by 7% or so, the same as with the current system. So using DDoS to lower difficulty levels is just as effective now (not very) as it would be in a more frequent system. Remember, the new difficulty would still be calculated from the last 2016 blocks, even though the adjustment is done more often.

[AngelusWebDesign]

Well, if we're hypothetically switching to every 10 blocks, why still consider the last 2016 in the calculation?

But even so, I hold that if there were a measurable payoff, DDoS attacks on pools would be that much more common.

Heck, they DDoS now, even though it does no "good" at all (lowering difficulty level).

[Zibbo]

Well, if we're hypothetically switching to every 10 blocks, why still consider the last 2016 in the calculation?

Because by considering only last 10 blocks, the variance would be so high, that the difficulty would be jumping up and down by 1000%.

But even so, I hold that if there were a measurable payoff, DDoS attacks on pools would be that much more common.

If there were, sure, but there isn't.

Heck, they DDoS now, even though it does no "good" at all (lowering difficulty level).

If in a two week period you manage to DDoS enough, so that 5% of the blocks that would have been solved end up not being solved, the next difficulty level is 5% lower than it would have been otherwise. Same is true for the current system, and my proposal.

[Nemesis099]

I have to say I do think this is an interesting thought but bitcoin has probably more miners that don't switch back and forth where namecoin does.

What I'm curious about is when the payout per block drops from 50 to 25 to see if people start dropping out as with the rise in difficulty some might not be able to turn a profit if that is what they are after unless the price increases.

[Mousepotato]

IMHO Bitcoin already has so much "velocity" that even if we lose 80% of our mining network (I'm not sure if you meant 80% of the people doing mining, or 80% of the total hashing power, but I'll assume the latter) we'll still break through to the next difficulty adjustment before everybody completely bails.  Satoshi should have built in a difficulty adjustment based not only on block count, but also difficulty duration.  Or maybe there is one already?  I dunno.

[Syke]

Given that most of the btc mining is for profit, the same thing might happen to btc if we see something severely affecting miners. If we lose 80% of our mining network for some reason it could take up to 10 weeks for the next difficulty adjustment. If the remaining miners then pull out since all that hard hashing isn't worth it, it would take much, much, much longer.

If if if. If a pink dragon flew by my house and dropped a load of dung on my miner I wouldn't get any more blocks either.

Blocks/hour    6.23 / 578 s

The reality is the bitcoin network is still growing.

[gigabytecoin]

With this new patch, namecoin difficulty is only going up. I suggest you start mining now.

[bcpokey]

With this new patch, namecoin difficulty is only going up. I suggest you start mining now.

You realize that's not even proposed to happen until block 24000 right? (Current NMC block is ~17000), if it actually happens.

As for the original point, it's not very unexpected, I and probably others mentioned this a while back. It's certainly possible, but it's more likely to happen as a result of other catastrophic failures for bitcoin spelling its inevitable doom anyway.

IMHO Bitcoin already has so much "velocity" that even if we lose 80% of our mining network (I'm not sure if you meant 80% of the people doing mining, or 80% of the total hashing power, but I'll assume the latter) we'll still break through to the next difficulty adjustment before everybody completely bails.  Satoshi should have built in a difficulty adjustment based not only on block count, but also difficulty duration.  Or maybe there is one already?  I dunno.

Difficulty adjustment is 100% based on difficulty duration, when it occurs/is calculated however is based on block count. Not sure if that's what you were thinking.

[Mousepotato]

Difficulty adjustment is 100% based on difficulty duration, when it occurs/is calculated however is based on block count. Not sure if that's what you were thinking.

Err.. I guess I should have worded my last entry a little better, and I'm probably showing my lack of understanding how difficulty decreases work here.  What I'm getting from this thread is that difficulty decreases don't happen until block 2016 is found, for a given difficulty period.  What I was trying to say is that a difficulty decrease should take place if we reach the end of a difficulty period even if block 2016 hasn't been found.  Or is that the way it works already?  Please correct me if I'm wrong.

[deepceleron]

Difficulty could be a sliding window based on the average time of the last 1000 blocks, so it doesn't jump in big leaps or 'get stuck' at a high difficulty, like namecoin, where it can take two hours for the next block and two months for a difficulty reset.

Bitcoin could also have 1 minute 5BTC reward blocks - transactions would be confirmed fast even if you triple the required confirmations and increased orphan blockchain lengths, and mining wouldn't be as much a lottery.

Devs would just have to make a client that decides a point far in the future (like block 300,000) is where the new calculations kick in, so that it can be widely distributed before the change.