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Author Topic: What can happen after mining reached saturation?  (Read 4712 times)
log2exp
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November 01, 2013, 12:29:37 AM
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Given that only handful ASIC sellers offering in-hand miners, most of them priced ROI to be infinity. Then it’s likely the network hash rate will reach the plateau at some point in time. It’s an indicator that miners are very reluctant to invest in mining equipment passing that point.

From this point on, the network will have some lengthy period of stability without significant hashing power increase. A government wants to destroy bitcoin, it’s easy enough to calculate the total hashing power needed to overtake 51%, and it can also execute overnight given that it’s highly possible to accumulate enough ASICs to flip on the switches at the same time. Miners won’t get enough time and resource to react.

Is this likely to happen?
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November 01, 2013, 12:59:17 AM
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Given that only handful ASIC sellers offering in-hand miners, most of them priced ROI to be infinity. Then it’s likely the network hash rate will reach the plateau at some point in time. It’s an indicator that miners are very reluctant to invest in mining equipment passing that point.

From this point on, the network will have some lengthy period of stability without significant hashing power increase. A government wants to destroy bitcoin, it’s easy enough to calculate the total hashing power needed to overtake 51%, and it can also execute overnight given that it’s highly possible to accumulate enough ASICs to flip on the switches at the same time. Miners won’t get enough time and resource to react.

Is this likely to happen?


In my opinion: If the goverment wants to get Bitcoin irrelevant, they can easily to it. Butterfly labs offers one GH/s miner for 10$. To get 3000 TH/h of mining power would cost "only" $30mio. Now let the goverment produce them in secret and way less efficient plus buy 5 very good programmers (for example to distribute this power , so no one will know that the goverment has +51%), ok, $200Mio.. The receipt of only the federal govervemt of the us is 3 000Billions per year, which makes $350Mio. per hour.
To get now more than 51% of the mining power the goverment has just to wait 30min to earn the money.

PPCoin makes it more interesting. To provide more the 51% of the mining power you also have to have 51% of all coins. This would be much more costly. Because if the goverment will buy this will just drive up the price and costs maybe multiple more than the market cap, which is now 10times more then the cost of 51% of the mining equipment.

Greetings

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November 01, 2013, 01:00:43 AM
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What will happen is some people ought to resell their ASICs at a loss to people with cheap electricity.

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November 01, 2013, 01:09:42 AM
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Why the world still put trust in the US bonds? Because of the US military backing it. It's one way that US keep invested in military.

If bitcoin grow big enough to cause headaches to the government, the cost now to kill bitcoin is equivalent to few F-35 fighter jets. With the sole purpose of destroying the bitcoin, and protecting the dominance position of fiat/bond. So it's a high probable scenario down the road.
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November 01, 2013, 01:12:50 AM
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What will happen is some people ought to resell their ASICs at a loss to people with cheap electricity.

Miners changing hands will not have impact on the overall network hashing rate, correct?
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November 01, 2013, 01:34:13 AM
 #6

Given that only handful ASIC sellers offering in-hand miners, most of them priced ROI to be infinity. Then it’s likely the network hash rate will reach the plateau at some point in time. It’s an indicator that miners are very reluctant to invest in mining equipment passing that point.

From this point on, the network will have some lengthy period of stability without significant hashing power increase. A government wants to destroy bitcoin, it’s easy enough to calculate the total hashing power needed to overtake 51%, and it can also execute overnight given that it’s highly possible to accumulate enough ASICs to flip on the switches at the same time. Miners won’t get enough time and resource to react.

Is this likely to happen?


I would expect that by the time what you mention becomes a problem (if ever) some sort of a plugable proof-of-work mechanism would be developed.

Long before that I would expect the makeup of the true peers in the ecosystem to shift in a variety of ways.  This group will define how Bitcoin actually works.  If consensus on how proof-of-work (or more generally 'ledger locking' for lack of a better term) cannot be reached, I'd expect the solution to fragment (fork) with almost all fragments retaining the existing blockchain as a source of truth for value.  If this happens I would expect that most of the fragments would dry up and blow away.  Perhaps all but one.

The really big question in my mind how big the pool of potential peers will be when this 'blow-up' happens (if it happens.)  That would be a function of the transaction rate (and it's summation over time.)


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November 01, 2013, 01:55:26 AM
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I would expect that by the time what you mention becomes a problem (if ever) some sort of a plugable proof-of-work mechanism would be developed.

Long before that I would expect the makeup of the true peers in the ecosystem to shift in a variety of ways.  This group will define how Bitcoin actually works.  If consensus on how proof-of-work (or more generally 'ledger locking' for lack of a better term) cannot be reached, I'd expect the solution to fragment (fork) with almost all fragments retaining the existing blockchain as a source of truth for value.  If this happens I would expect that most of the fragments would dry up and blow away.  Perhaps all but one.

The really big question in my mind how big the pool of potential peers will be when this 'blow-up' happens (if it happens.)  That would be a function of the transaction rate (and it's summation over time.)



Yes, I hope there is a solution to prevent this sudden 51% attack soon. As even if it's executed successfully for only 30 minutes, it's like a nuke to the bitcoin world. Level of confidence will be seriously challenged.
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November 01, 2013, 02:16:13 AM
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Yes, I hope there is a solution to prevent this sudden 51% attack soon. As even if it's executed successfully for only 30 minutes, it's like a nuke to the bitcoin world. Level of confidence will be seriously challenged.

It would be a real shame mostly because it does not have to be.

If an attacker who was a threat to a large majority of stakeholders somehow managed to pull off a 51%, all that would have to happen is that the system would freeze for a while while the situation is dealt with.  Nobody holding value would lose anything except for perhaps a few unfortunate souls who had a transaction underway during the final block.

I think that a majority of users could understand and be fairly calm about such a think if they were prepared for what could and could not come of a superior resource based attack (or carrier protocol attack which seems to me more likely.)  If people went into a mass panic because they were not prepared then the fallout could be orders of magnitude worse.


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November 01, 2013, 02:21:06 AM
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I think even when the power reached the stable stagnant power, innovation will always move forward and keeps the power doubling if not tripling in a month, now we have a 100% increase in each retarget. So most likely the only way for the govt. to dishearten the enthusiast is to penalize bitcoin mining and ownership.

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November 01, 2013, 03:42:06 AM
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PPCoin makes it more interesting. To provide more the 51% of the mining power you also have to have 51% of all coins. This would be much more costly. Because if the goverment will buy this will just drive up the price and costs maybe multiple more than the market cap, which is now 10times more then the cost of 51% of the mining equipment.

Interesting point on PPCoin. However, there might be a flaw long term with PPCoin against quantum computer getting the private key. Since PPCoin need to have proof of stake, the wallet have to sign its stake. Similar like we spend coins from out wallet in bitcoin. This exposes the public key, and potentially be a weak point subject to calculation of private key. In bitcoin, as long as we move the coin into a new wallet, it's safe against this kind of attack. Now it's like a catch 22 situation, if bitcoin introduces something similar like proof of stake, will it expose as a weakness?
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November 01, 2013, 03:44:20 PM
 #11

What will happen is some people ought to resell their ASICs at a loss to people with cheap electricity.

Network hashrate is still same just mining at difference places.

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November 01, 2013, 11:13:31 PM
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Yes, I hope there is a solution to prevent this sudden 51% attack soon. As even if it's executed successfully for only 30 minutes, it's like a nuke to the bitcoin world. Level of confidence will be seriously challenged.

It would be a real shame mostly because it does not have to be.

If an attacker who was a threat to a large majority of stakeholders somehow managed to pull off a 51%, all that would have to happen is that the system would freeze for a while while the situation is dealt with.  Nobody holding value would lose anything except for perhaps a few unfortunate souls who had a transaction underway during the final block.

I think that a majority of users could understand and be fairly calm about such a think if they were prepared for what could and could not come of a superior resource based attack (or carrier protocol attack which seems to me more likely.)  If people went into a mass panic because they were not prepared then the fallout could be orders of magnitude worse.

The fact that nobody holding value would lose anything is an important aspect.

I think the network would behave very similar to the March 2013 fork (which IMHO was worse than a 51% attack since it was due to inherent weakness in the code), the community would: 1) professionally discuss the issue, 2) agree by consensus on a plan of action and 3) execute a solution favored by the majority. In March '13 this meant all pools downgraded their s/w version and manually switched to the "agreed" block chain.

Such an attack by the government would probably backfire and strengthen confidence because people would see how inept it was and how solutions can be developed on the fly to overcome it. It would probably work out to be an embarrassment by the government attacker.

It would also be a great time to buy cheap coins Smiley
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November 03, 2013, 02:36:02 AM
 #13

Given that only handful ASIC sellers offering in-hand miners, most of them priced ROI to be infinity. Then it’s likely the network hash rate will reach the plateau at some point in time. It’s an indicator that miners are very reluctant to invest in mining equipment passing that point.

From this point on, the network will have some lengthy period of stability without significant hashing power increase. A government wants to destroy bitcoin, it’s easy enough to calculate the total hashing power needed to overtake 51%, and it can also execute overnight given that it’s highly possible to accumulate enough ASICs to flip on the switches at the same time. Miners won’t get enough time and resource to react.

Is this likely to happen?


Pretty hard for government to 51%, they would need a lot of tax payer's money which people would complain.. they might as well use the money to pay back the debts....

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November 03, 2013, 11:22:55 PM
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Pretty hard for government to 51%, they would need a lot of tax payer's money which people would complain.. they might as well use the money to pay back the debts....

Sorry for the off topic. Just want to laugh a bit at the suggestion of any government paying off debts.  Tongue Also, government does not need tax payers money.

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http://www.youtube.com/watch?v=iFDe5kUUyT0

You're welcome!  Wink

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November 03, 2013, 11:48:29 PM
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I may be being very naive here, but if they did try this wouldn't we just need to find their mining pools and hit them to shit. I also think as a community we could pull together enough to sway it. So people currently doing altcoins and people with un used shitty ASICS or old ones that don't beat cost of power would turn them on for the good of us all.

Hell I'd get my CPU and GPU going and plug in some block erupters.

(and give ASIC companies their due, they would make a shit ton of ASICs and turn them on just to secure, it would be slower reacting though)

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November 03, 2013, 11:51:42 PM
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It would be great if people can afford it individually but right now buying shares with cex is the low risk investments than hardware that  is hard to dispose when you need liquidity.

Ajinomoto
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November 04, 2013, 04:58:56 AM
 #17

Given that only handful ASIC sellers offering in-hand miners, most of them priced ROI to be infinity. Then it’s likely the network hash rate will reach the plateau at some point in time. It’s an indicator that miners are very reluctant to invest in mining equipment passing that point.

From this point on, the network will have some lengthy period of stability without significant hashing power increase. A government wants to destroy bitcoin, it’s easy enough to calculate the total hashing power needed to overtake 51%, and it can also execute overnight given that it’s highly possible to accumulate enough ASICs to flip on the switches at the same time. Miners won’t get enough time and resource to react.

Is this likely to happen?


Then you might see difficulty stop increasing (might also decrease). Then whoever have free electricity wins....

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RISE
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