The Reason Bitcoin HODL Will Never End Via Halving

[Hydrogen]

Moore's law is the most neglected aspect to the btc halving debate. And to crypto mining discussions in general.  



The above chart illustrates the transistor density of CPUs (it applies to GPUs and ASICs as well) doubling roughly every 2 years under moore's law. It represents lithographic silicon etching processes scaling downwards via nanometers. This translates not only to considerable improvements in processing power over time. But also implies the power consumption of chips in a constant state of decline



These trends contribute towards miners producing significantly greater quantities of hash rate, per dollar, over time. As well as decreased energy consumption in terms of hash per watt.

(All of the above could explain the lag time between the last halving in 2016 coupled with the rise in bitcoin price the following year.)

I think the bottom line here is, bitcoin halving isn't a one sided debate where rewards halve while mining power remains constant. Which I've seen many bloggers claim of late.

A continuation of moore's law guarantees mining feasibility and profitability over the long term. As long as moore's law continues, bitcoin HODL will as well.

[jackg]

Moores law started to stagnate in 2012 with the advent of gpus....

The issue was that gap that's too small means that electrons don't travel at the speed of light and are instead able to use quantum tunneling to teleport to different parts of a processor (in its simplest explanation). Quantum computing or em wave applications in current machines may offer some improvements later on but for the moment we're stuck...

We don't need miners to improve for difficulty to increase though, we'd need a price increase but not a mining hardware cost increase... And you can always work on making your chips cheaper...

[exstasie]

A continuation of moore's law guarantees mining feasibility and profitability over the long term. As long as moore's law continues, bitcoin HODL will as well.

What is the connection between the two? How does improving mining efficiency equate to a HODL effect, or increasing BTC price, or whatever the argument is?

In your opinion, what happens to Bitcoin if Moore's law fails?

Personally I'm more interested in Metcalfe's law as a basis for BTC's value, which has a determining effect on mining profitability. Although I will concede that hash rate probably has some effect on price, being that mining security is one of the underlying bases for Bitcoin's value proposition. Unfortunately none of this stuff is easy to measure.

[Hydrogen]

Moores law started to stagnate in 2012 with the advent of gpus....

GPUs are developed purely with raw FLOP computation in mind. Its chipset leans heavily towards specialization. The hardware demands of CPUs are developed as a jack of all trades. Its profile encompasses a number of different areas which are more geared towards flexibility than raw computation. The 2012 slowdown could partly represent differences in design paradigm which became more evident post GPU decoupling.

There are innovations arriving like AI based chip design which carry a potential to speed up moore's law over time. I think it could go either way. We could see a slow down or the opposite.

A continuation of moore's law guarantees mining feasibility and profitability over the long term. As long as moore's law continues, bitcoin HODL will as well.

What is the connection between the two? How does improving mining efficiency equate to a HODL effect, or increasing BTC price, or whatever the argument is?

In your opinion, what happens to Bitcoin if Moore's law fails?

I think its fair to say dollar cost per watt could be one of the main factors determining whether solar panels are an attractive investment for homeowners. This observation could translate to crypto in terms of dollar cost per hash. With a continuation of moore's law guaranteeing significant improvement over time.

Its like a 100 watt solar panel costing $100 today. Knowing that in 2 years the silicon density will double. Allowing you to buy a 200 watt solar panel for $100. Thanks to moore's law. Significantly improving performance per dollar, guarantees mining is consistently becoming more cost effective and attractive over time. Although mining difficulty, of course, is a big factor. Rewards halving is less of a factor as it remains a static constant for years after being invoked.

That's how I see it anyway. I'm constantly surprised this isn't a bigger discussion topic in crypto land.

[sheenshane]

Just now heard this kind of Law, Moore's Law on Bitcoin but the term HODL isn't new for me.

IMO, I tend to agree that halving has an effect o the Bitcoin's price. However with bitcoin HODL I don't see any direct effect. It is nice to know that with Moore's Law it might give hope to the miners who could have to find halving unremunerative and later may decide to quit mining. With Moore's Law, it has a clear explanation that though halving reduces rewards expenses might go down as well. However, timing and rate may not meet the same time that may still cause some miners to give up instead if rewards will not be able to cope and compensate the expenses on mining.

Thank you for sharing this, it's a very informative thread. I will study this kind of Law.

[bits4books]

>As long as moore's law continues
And then someone (that is, the state) decides that the cryptocurrency allows too much and will launch a quantum computer that would drop everything around. Unfortunately, without the development of fundamentally new quantum resistant cryptotechnologies, cryptocurrencies do not have very high chances of life in a world where a China can put everyone just by launching a quantum computer. What to do with it?

[Cnut237]

A continuation of moore's law guarantees mining feasibility and profitability over the long term.

Moores law started to stagnate in 2012 with the advent of gpus....

The issue was that gap that's too small means that electrons don't travel at the speed of light and are instead able to use quantum tunneling to teleport to different parts of a processor (in its simplest explanation). Quantum computing or em wave applications in current machines may offer some improvements later on but for the moment we're stuck...

I second what jackg said - electron tunneling is a barrier to further size reduction; the continuation of Moore's law is constrained by the laws of physics. As size reduces, quantum effects such as wave-particle duality become more apparent, and classical approximations are no longer sufficient. You can't just reduce size indefinitely.

Bit of a tangent, but a recent development in quantum computing is that tunneling could become a feature, not a bug...

[Hydrogen]

I second what jackg said - electron tunneling is a barrier to further size reduction

People have said this over the last 10-15 years.

It doesn't appear to have materialized yet. If it ever will.

 

[dothebeats]

Sad to say that experts think that the Moore's law is already flawed as the smaller the process becomes, the greater problems posed by physics arise such as quantum tunneling for the foreseeable future, at least. As such, you can't really pin it down on Moore's law as a panacea for all the problems miners would face as block reward gets halved every 210000 blocks. While true that miner manufacturers tend to develop some improved machines every year or so, the improvement in performance to dollar ratio is not really that great for miners that upgrading would just be a liability and not an asset--at least until it pays off the machines, but who knows how long would that be. Maybe the deep-pocketed miners can afford such improved miners, but that would certainly mean the demise for all the medium-sized farms until hardware becomes cheap, or until the price really takes a huge jump from where it is right now and stayed there for good.

[bitgolden]

Of course, there will be increase and we have even seen that in the past 10 years alone. Think about it, first thing we had was regular computers which were mining bitcoin and that is alright. Second one was when fpga was discovered and people started mining with those and that increased the difficulty a lot, those people started to earn A LOT more than others. Eventually we slowly moved to asic miners and right now asic miners of today and asic miners of first days are insanely different. We literally had usb miners, so think about how different the situation is right now.

So, by that logic we are going to have machines that will be bigger than 1% of current hashrate eventually one day in the future, that is how progress happens and that is where it reaches.