MIner Question

[mda]

There is a third way that makes possible small fees and small blocks, all secured by huge hashrate.

Sharding strategy held together by atomic swaps

Hopefully after halvings rational BCH/BSV users and miners will move that way and current BTC will become BLN.

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[Wind_FURY]

Even Jihan Wu, thinks the price of bitcoin is going below $6k , which is why he wants to lay off more staff.
It the Bitmain CEO does not have a good grasp of market movements considering he has access to asics purchase data and actual costs,
then what makes you think you know more than him.

That may not speak to Jihan Wu's price predictions. Bitmain might just be performing poorly and are tightening their belt.

Jihan Wu, and Bitmain sold their Bitcoin hoard to buy Bitcoin Cash, which lost more value compared to Bitcoin. They would have saved 50% of their staff if they HODL Bitcoin.

You are missing the point , the fact is less blocks will be found which will also decrease rewards.
Franky1 pointed out many time , currently Miners care little for transactions fees as they earn the majority from the bitcoin rewards,
This means even if the fees skyrocket , this will not cover the cost of the loss in rewards prices.
In other words, the higher fees won't offset the difference and bitcoin is still fucked.

For a few weeks, until difficulty adjusts.

You think if block time increases, miners everywhere will just immediately give up and abandon their operations?

franky1 has the right to be concerned, but his solution is not the right solution.

[mda]

LN steals transaction fees from BTC for it's offchain network

Transaction fees can go trough the roof so it isn't a problem as many on this forum will reassure you.
The problem is LN dependence on timelocks that will wreak havoc on the world if level 1 gets disabled for an extended period of time.

[JAX Community]

The main thing that helps prevent a 51% attack is the decentralization of miners. As long as no single entity has control of over 50% of the mining power, the network is safe.
Additionally, robust blockchains such as Bitcoin, are already considered inherently safe, as it would take an unreasonable amount of money to gain 51% of the Bitcoin network’s mining power.
One of the things to keep in mind is that someone with so much mining power would probably make more money using this power to, than by actually blocking transactions or double-spending. This reduces the risk of such an attack substantially.

[Dabs]

People mined at the start without profit incentives, because there were none, at least not monetary or financial. In the same way a lot of distributed projects continue to get additional computing power or members to compute prime numbers, math rulers, aliens, cures for cancer and a bunch of other things, all of which are not crypto or coins or anything like that.

[BrewMaster]

LN steals transaction fees from BTC for it's offchain network

Transaction fees can go trough the roof so it isn't a problem as many on this forum will reassure you.
The problem is LN dependence on timelocks that will wreak havoc on the world if level 1 gets disabled for an extended period of time.

bitcoin is not ethereum to have its entire network crash entirely just because there was a fee rise. the higher fees don't "disable" the bitcoin blockchain, it will just cost more to have your transaction mined faster.

[Dabs]

Higher fees imply more transactions. More transactions means more usage, mostly. There could be some spam, but I don't see too many non-legit transactions pretending to be real ones anyway. More usage usually means value. Mining and block rewards and tx fees will eventually normalize and find some equilibrium ... to have enough profit incentive so the network keeps going.

I've been able to send transactions for 1 sat per vbyte almost every time I needed to, and the few times I want them confirmed faster, I add a little more. The total has rarely gone above $1.00 in value. Some people are just impatient, eventually your tx will get confirmed if you wait a little.

[DannyHamilton]

Hoping btc limited transactions per block can reach 2500

Or more:

https://www.blockchain.com/btc/block/0000000000000000000888db953630d4db6f094dd3df317e4822cef054d0fdb3



A full block can potentially fit more than 3500 transactions.

More importantly though...

Geez Guy do a little math.

. . .

total Bitcoin Miners earn $14,040,000 per day from rewards alone

. . .

Now if China disables 70% of the hashrate, by just outlawing and banning bitcoin mining overnight
leaving only 30% of the non-China hashrate

. . .

Total Per Day $1,257,750 + $10,750,000 = 12,007,750

The whole bitcoin network is now
Pre China Slap   :  $14,225,356 with transaction fees at only $0.80

after China Slap :  $12,007,750 and transaction fees moving to a minimum of $100 per transaction

Yes.  Let's do a little math, shall we?


That $12,007,750 is now being split across the 30 percent of the miners that are still mining, whereas the $14,225,356 was being split across the entire network (including that supposed 70% in China).

So...
Pre China Slap : The non-China 30% of the world that is mining is splitting up 30% of $14,225,356 = $4,267,606

after China Slap : The non-China 30% of the world that is mining is splitting up 100% of $12,007,750

Every remaining (non-China) miner's revenue is increased 2.8X

I suspect that nearly tripling the mining revenue for a given mining operation will incentivize a LOT of hash power to quickly start mining on the Bitcoin network (regardless of whether it is switching back on after having been recently shut down or is switching over from some other SHA256 POW coin)

[squatter]

Yes.  Let's do a little math, shall we?

That $12,007,750 is now being split across the 30 percent of the miners that are still mining, whereas the $14,225,356 was being split across the entire network (including that supposed 70% in China).

So...
Pre China Slap : The non-China 30% of the world that is mining is splitting up 30% of $14,225,356 = $4,267,606

after China Slap : The non-China 30% of the world that is mining is splitting up 100% of $12,007,750

Every remaining (non-China) miner's revenue is increased 2.8X

I suspect that nearly tripling the mining revenue for a given mining operation will incentivize a LOT of hash power to quickly start mining on the Bitcoin network (regardless of whether it is switching back on after having been recently shut down or is switching over from some other SHA256 POW coin)

Gotta love , how you totally ignore that the transaction fees went from $0.80 to $100.
Missing the forest for the tree.        

What's your point? That only further reinforces DannyHamilton's argument. Existing [non-Chinese] miners -- on top of yielding a larger share of total revenue from the mining subsidy -- would also yield more fee revenue. If fee revenue per block rose 125x as you suggest, that would eclipse the fee revenue lost from 70% slower block time. That would create even greater incentives for miners to join the network and drive the hash rate back up.

[Wind_FURY]

Even Jihan Wu, thinks the price of bitcoin is going below $6k , which is why he wants to lay off more staff.
It the Bitmain CEO does not have a good grasp of market movements considering he has access to asics purchase data and actual costs,
then what makes you think you know more than him.

That may not speak to Jihan Wu's price predictions. Bitmain might just be performing poorly and are tightening their belt.

Jihan Wu, and Bitmain sold their Bitcoin hoard to buy Bitcoin Cash, which lost more value compared to Bitcoin. They would have saved 50% of their staff if they HODL Bitcoin.

Think about it, why is Jihan Wu showing more support for bitcoin cash than bitcoin.
It is because he knows the rewards are dropping and he will earn more in transaction fees from bitcoin cash than bitcoin.
Because BCH has a larger file size more transactions , Jihan Wu does not care if you are running a node or not, he only cares about profit.
Which should scare you, as it directly shows the miner's interests/support is wavering for btc and moving toward other ASIC friendly networks.

You think about it too. Jihan Wu is the largest miner, and producer of mining gear, of course he won't care if the network centralizes towards him. He WANTS it to centralized towards him as soon as possible.

franky1 has the right to be concerned, but his solution is not the right solution.

Franky1 Solution helps the miners earn more profits from transaction fees , so they remain profitable and financial interests/support remain with btc not toward BCH or other ASICS friendly networks.
LN steals transaction fees from BTC for it's offchain network, it is definitely not the solution for the miners profit margin anyway.
That is why the miners are colluding behind your backs preparing to switch networks at one of the next halvings,
because the majority are ignoring their financial concerns and they plan on staying profitable with or without btc.
And when you think about , would you really do any different if you were in their shoes.  

Yet, their solution is producing smaller blocks than Bitcoin. Wait for the next halvings for Bitcoin, and Bitcoin Cash.

[Dabs]

And why will transaction fees go to $100? That would imply the price of bitcoin went up too, but if it goes down, then transaction fee in fiat value will also go down.

[squatter]

And why will transaction fees go to $100? That would imply the price of bitcoin went up too, but if it goes down, then transaction fee in fiat value will also go down.

He's implying that 70% slower block time would increase congestion to the point of exponentially increasing fees. Not only is his rate of fee increase unreasonable, but he's not accounting for changes in fiat value.

Let's stop feeding the troll...

[DannyHamilton]

Gotta love , how you totally ignore that the transaction fees went from $0.80 to $100.
Missing the forest for the tree.        

I didn't miss anything.

Your point (which was incorrect) was that miners would lose FIAT revenue even if the transaction fees went up a HUGE amount. To make this false point, you pretended a huge crash in fiat exchange rate (that may or may not happen), a huge increase in fees per transaction (that may or may not happen) and even given those attempts you STILL failed to demonstrate an actual loss for the remaining miners.

My point was that any increase at all in fees (regardless of whether it was $0.01 or $99.20) would result in an INCREASE in BTC revenue for the miners that don't shut off their equipment, and that even your extreme examples still result in fiat profit.  In reality, it is possible that the remaining miners might encounter a temporary loss of FIAT value.  It's difficult (impossible?) to know ahead of time exactly what the exchange rate will be, or what the average transaction fee will be, or what the transaction backlog will be. However, they will certainly encounter in INCREASE in BTC.

If 60% (or 70%, or 80%, or whatever arbitrary number you feel like you want to pick) of the hash power were to suddenly shut off, it would reduce the total number of blocks per day that the USERS see solved, but it would have no effect at all on how many blocks per day the remaining miners are paid for.  The block subsidy revenue (in BTC) for the remaining miners would be completely unchanged.  The total revenue (in BTC) for the remaining miners would go up (or down) with any change in transaction fees per block. Whether this change in total revenue (in FIAT) is positive or negative depends on how much the transaction fees per block change and how much the FIAT exchange rate changes.

Then, once the normal difficulty adjustments return the system to 2,016 blocks per fortnight, block subsidy revenue (in BTC) for the remaining miners would increase significantly, and the transaction fees would return to equilibrium.

Let's stop feeding the troll...

This is an excellent idea.  I think I'm done watching this thread.  I'll remove it from my watchlist.

[Wind_FURY]

Gotta love , how you totally ignore that the transaction fees went from $0.80 to $100.
Missing the forest for the tree.        

I didn't miss anything.

Yeah , you really did, maybe you'll be brighter by the halving.   

Take the trolling, and the debates away, Bitcoin is still in beta, and still an experiment that could fail. None actually knows which design-decision is right. The Core developers took a design-decision, the Cash community split from the network, became an altcoin, and took theirs.

But, it is of my opinion that blocks remain to be regulated for the security, and longevity of the network.

[Dabs]

What did he miss? He just said he didn't miss anything, and articulated in a much better manner the situation than you did. His post history is also much better, to the point they're not going to be wasting any more time if you just continue trolling incoherently.

[Wind_FURY]

Bitcoin is still in beta, and still an experiment that could fail. None actually knows which design-decision is right.

Over 10 years of beta code, pretty lame.
With that track record, LN will never be ready.

You can pretty well bet, the ones that China shuts down because the miners are causing grid problems will fail in the long run.

Because of the supply cap, I'm with the opinion that Bitcoin will stop being in beta only "once the fee market is supporting the hash market".

With PoS , there is no insane power drain, and China would have a hard time pinpointing an exact physical location if the staker wanted to hide from them.

POS has its problems too, it depends on trusted-third-party checkpoints.

[Wind_FURY]

POS has its problems too, it depends on trusted-third-party checkpoints.

No it does not.
ZEIT's proof of Stake design has not used a hard coded checkpoint in years.
It is only secured by the coins and longest chain for years now.

Then, what protects its blockchain from the vulnerability of long-range nothing-at-stake attacks? Attacks that cost nothing to produce millions and millions of blockchains controlled by an attacker?

You said miners can collude, risking the costs of Proof of Work, what stops collusion in Proof of Stake which costs nothing?