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Author Topic: 51% attack  (Read 388 times)
lorax2013
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November 03, 2013, 07:00:58 PM
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OK I'll preface by saying I'm relatively new to bitcoin and not a computer guy.  Hopefully someone can explain - I hear about a "51% attack" where if any entity ever took over 51% of the computing power of the network, it would allow them to control the blockchain and, in effect, bitcoin.  As I understand it, miners collectively "control" the blockchain now.  So according to this chart:

https://blockchain.info/charts/miners-operating-profit-margin?timespan=1year&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

the profitability of mining has dropped massively since June 2013 while the values of bitcoin have soared.  The miners now have a NEGATIVE 800% profitability.  Now knowing these guys aren't stupid I would tend to assume that the only entities "mining" at the moment are the ones WILLING to take a massive loss for some reason.  The only reason I can think is some entity is willing to lose a lot of money to gain control of the blockchain.  Tell me where I'm wrong because again, I'm no expert but don't see another logical explanation based on my limited knowledge of bitcoin.
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mindfulmojo
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November 03, 2013, 07:08:56 PM
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The way I think is that they are hoping for profit in the future....

Bitcoin should keep going up, it's never going to suffer inflation...

There can only be so many ever mined, so it's more in danger of a deflationary spiral,

where the bitcoins become too valuable to spend and people just hold on to them.

So everybody spend your bitcoins! lol

Hope that helps... Smiley

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November 03, 2013, 07:31:40 PM
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I think the chart is based on bad data.  I think it calculates the energy usage based on an average taken back when graphics were being used using some kind of kilowatts per Megahash/s.  Now ASICS mining hardware is being used and that number is much smaller.  In other words the chart does not take into account the efficiencies in new mining hardware.  

Yes. The chart must be using old power usage data. ASICs use very little power compared to CPUs, GPUs, and FPGAs. The dominant cost of mining now is the cost of the hardware, which is not reflected in that chart.

Power usage for GPUs is in the range of 500 - 1000 j/GH, but ASICs are in the range of 1 - 2 j/GH. A 1 TH/s miner will use about 24 kWH of power a day and mine more than $250. At the rate of $0.10 per kWH, the cost per day is only $2.40.

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lorax2013
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November 03, 2013, 07:41:33 PM
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Thanks, that makes sense.  Hope this is the near certain explanation for the anomoly.
Ledeci
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November 03, 2013, 07:50:34 PM
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OK I'll preface by saying I'm relatively new to bitcoin and not a computer guy.  Hopefully someone can explain - I hear about a "51% attack" where if any entity ever took over 51% of the computing power of the network, it would allow them to control the blockchain and, in effect, bitcoin.  As I understand it, miners collectively "control" the blockchain now.  So according to this chart:

https://blockchain.info/charts/miners-operating-profit-margin?timespan=1year&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

the profitability of mining has dropped massively since June 2013 while the values of bitcoin have soared.  The miners now have a NEGATIVE 800% profitability.  Now knowing these guys aren't stupid I would tend to assume that the only entities "mining" at the moment are the ones WILLING to take a massive loss for some reason.  The only reason I can think is some entity is willing to lose a lot of money to gain control of the blockchain.  Tell me where I'm wrong because again, I'm no expert but don't see another logical explanation based on my limited knowledge of bitcoin.
That chart is totally off.

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