Ordinals and other non-monetary "use cases" as miner reward on 2140+

[mikeywith]

That means that if block subsidy was cut off completely, then the hashrate would probably drop by 90 to 95%, from currently around 600 Eh/s to perhaps 50-70 Eh/s. You may say that's dramatic, but that is approximately the hashrate Bitcoin had in 2018/19 (see this chart), and Bitcoin was considered safe at this time too.

It was safe at that time because it was technically and economically difficult to operate another 30-40 EH/s back in 2018. In today's world, that's the worth of a single farm. Of course, that doesn’t mean if we drop to 50 EH the next month, someone with 30 EH would attempt an attack on the network. It would be very difficult to make a profit from an attack of such kind, unless done for the sole purpose of damaging Bitcoin, like a government or a huge bank.

In general I think a 10MB Bitcoin chain should still be ok. But it would harm the fee market (transaction fees would probably go back close to 1 sat/vByte) and thus miner income.

That's one assumption. The other assumption is that when it becomes cheaper to transact on the blockchain, more people will start to use it.

My take on the subject is that increasing the block size will happen at some point in the far future. The main excuse we had to delay that was the fact that many blocks were not even close to full. This is changing quickly, which means there is more constant demand for block space than we have available. Obviously, I am against something as extreme as BSV's infinite block size, but something closer to what you suggested would do just fine, in my opinion.

One reason why a block size increase hasn't happened and won't happen soon is that CHANGE is hard. Some people can’t imagine how difficult it is to change a tiny part of a local live app, let alone a huge change in a massive decentralized ecosystem like Bitcoin. There will be a lot of work involved, many risks, probably drama, and even death threats. Whoever wants to pursue this needs to lobby for months, convince all the pools and major players to accept the change, and assure them of a smooth transition. In other words, it's going to take some serious guts to do so.

[anarkiboy]

Nothing will change, Bitcoin will remain speculation bubble and nothing more.

Just use Monero.

[vjudeu]

You can check Monero supply by executing one command in the daemon.

It is only limited to the coinbase transaction. You have no proof, that there is no Value Overflow Incident, like this one: https://jonasnick.github.io/blog/2017/05/23/exploiting-low-order-generators-in-one-time-ring-signatures/

[stompix]

That means that if block subsidy was cut off completely, then the hashrate would probably drop by 90 to 95%, from currently around 600 Eh/s to perhaps 50-70 Eh/s. You may say that's dramatic, but that is approximately the hashrate Bitcoin had in 2018/19 (see this chart), and Bitcoin was considered safe at this time too.

The mining hardware has improved by 8x since 2018. Back then miners were using S9 which was able to produce 14Th/s with 1373W of power. Now with the S21 XP HYD you can get 473Th/s with 5676W of power. S9 = ~0.01 Th/J and S21 XP = ~0.08Th/J. So effectively, 50-70Eh/s hashrate now a days is actually equal to 8-10Eh/s in 2018. Also the market cap of Bitcoin is 4x higher than in 2018. So to have the same market cap to security ratio you would need 4x the hashrate/power consumption of 2018 hashrate. So if the hashrate did fall to 50-70 Eh/s then the security of the network in relation to the market cap would drop 24x

+2

Not only that but it's about the price also
When the S9 launch at 14 th/s it was $2100 , means $150 per th/s.
Bitmain is dumping the s19k pro for $11 per th/s, used gear probably is down to $5-7 maybe? Mikey might know better about this!

So in terms of building gear for the attack compared to 2017 you need at least 14x the hashrate!

Do what? Attack the network? The entire concept is based on the fact that such an action would be completely irrational. Not that it is, and will always be, infeasible.

"Extraordinary claims require extraordinary evidence"

[BlackHatCoiner]

"Extraordinary claims require extraordinary evidence"

It's not extraordinary to claim that Bitcoin is irrational to attack, but feasible nonetheless.

[d5000]

The mining hardware has improved by 8x since 2018.

Yes, this has all been already discussed. Hashrate is not the same as attack cost, and pehaps this sentence in my post was indeed misleading in implying security would be "as high as" 2018/19, even if this wasn't what I meant. But yes, I should have searched the point in time where attack cost would be as high as if today it would fall by 90-95%, taking into account hardware improvements. I was simply too lazy

But let's do that so the numbers are again correct:

- If we assume hashrate cost was 8x higher in 2018 than 2024, then the hashrate/USD ratio increases approximately 40% per year, or decreases about 28.6% each year we go back.
- Taking this formula we assume thus that for 2018 values, the attack cost of a network with 6 Eh/s would be the same than 50 Eh/s "if we cut block rewards completely in 2024" (which is of course a completely hypothetical scenario)
- Let's go a year back to 2017: The same "attack cost" than in the 95% reduction scenario would be equivalent to 4 Eh/s. The network surpassed 4 Eh/s in April 2017 according to Bitinfocharts.

So regarding attack cost, ignoring market cap, the network would probably be as safe as early to mid 2017. In other words: a no-reward Bitcoin with all values of 2024 would be approximately as "cheap" to attack as the Bitcoin network in early 2017.

If we take market cap into the equation then we'd have to go back to late 2014. [1] Yes, this is significantly earlier than 2018. But: was Bitcoin that unsafe back then? Also market cap does not necessarily increase the potential benefit for an 51% attacker. The USD value per block would be another measure to take into account for example. And also market depths for potential shorting gains ...

And it's very much a worst case scenario. As I wrote before, my "ideal" scenario would be a sidechain-backed tail emission plus fees.

That's one assumption. The other assumption is that when it becomes cheaper to transact on the blockchain, more people will start to use it.

For sure it's possible that the "economically ideal" block size could become larger in the future. I actually agree with you here: if the cost to hardfork wasn't that high -- see the drama it caused in 2017 -- then I would also support a slight blocksize increase. But the L2 scenario looks more attractive for me, it would be basically what Ethereum is trying to achieve with sharding.

@anarkiboy: It's not Bitcoin vs. Monero, it's Bitcoin & Monero By the way: Are Monero folks like you becoming hostile against Bitcoin lately? And why? ETFs?


[1] In 2014 market cap was ~1% from now (wildly swinging), hashrate was only 0.002% to 0.015% from 2024 (in the order of magnitude of 10-300 PH/s, it was growing very fast that year). Attack cost/hashrate ratio would be 3% of now in 2014 according to the above formula, thus the point would have been reached approximately when hashrate was at 0.03 % from now, or approximately 150 PH/s in August 2014.

[anarkiboy]

@anarkiboy: It's not Bitcoin vs. Monero, it's Bitcoin & Monero By the way: Are Monero folks like you becoming hostile against Bitcoin lately? And why? ETFs?

Bitcoin suppose to be Digital Cash.
Monero is Digital Cash.

See the difference ?  

You can check Monero supply by executing one command in the daemon.

It is only limited to the coinbase transaction. You have no proof, that there is no Value Overflow Incident, like this one: https://jonasnick.github.io/blog/2017/05/23/exploiting-low-order-generators-in-one-time-ring-signatures/

No, you're wrong. It's not only for the coinbase, it checks everything due to cryptography it can check without knowing transaction amounts.
You must be really desperate to link outdated bug, should I link you too to Bitcoin inflation bug ? choose which one because there are more than one.
If inflation bug happened today in Bitcoin even temporarily it would crash it to the ground.

[mikeywith]

So regarding attack cost, ignoring market cap, the network would probably be as safe as early to mid 2017. In other words: a no-reward Bitcoin with all values of 2024 would be approximately as "cheap" to attack as the Bitcoin network in early 2017.

Your math is probably correct, but the logic is flawed. To keep things simple, let's use some easy-to-work-with numbers:

2018: Total hashrate 10 EH > 5 EH or more needed for a miner to attack
2024: Total hashrate 100 EH > 50 EH or more needed for a miner to attack

If you cut 2024's hashrate down to 10 EH, it would be ten times less secure than it was in 2018. Simply put, acquiring 5 EH, which was 50% of the total hashrate in 2018, was significantly more difficult than acquiring 5% of the hashrate today. The same logic applies to the cost, infrastructure, and availability of mining gear needed to perform the attack.

Acquiring enough mining equipment to control a majority of the hashrate is a significant barrier. In today's context, with a hashrate of approximately 600 EH/s, obtaining 300 EH/s worth of mining power is logistically and economically impractical due to production and power constraints. It's not just the cost; it's the production and power constraints.

The largest farms on the planet, like MARA, which runs roughly 35 EH, are striving to push that to 50 EH by the end of the year, so even the largest Bitcoin miner couldn't attempt an attack. Even with unlimited funds and support, they simply can't achieve that scale. Conversely, if the hashrate dropped to 50 EH tomorrow, it would enable companies like MARA, RIOT, Bitfarms, and others to attack the network on the go without needing to acquire more hashrate.

I also don't understand why market cap or block rewards have anything to do with this. A 51% attack on the network doesn't mean the attacker would make more BTC than they could otherwise "legally." An attacker would only achieve one of two things:

1. Double Spend

2. Damage to the Ecosystem

In both cases, the incentive remains the same regardless of the price of Bitcoin or the block rewards.

Bitmain is dumping the s19k pro for $11 per th/s, used gear probably is down to $5-7 maybe? Mikey might know better about this!

What $7? I can cut you a deal for $3.5 if the quantity is large .

So, using d5000's numbers of 2018, achieving 6 exahash cost $300 million, with the price per terahash (TH) at $100. This represented 50% of the total hashrate back then. Today, 25 EH, which is 50% of a 50 EH network, costs $87.5 million.

While the overall cost difference isn't huge, the practical feasibility is starkly different. Currently, 250,000 miners (for 25 EH) can be easily sourced from various places like Telegram groups. In contrast, in 2018, the 214,286 S9 miners needed for the same attack were simply not available. Even Bitmain didn't have that much stock at any time. Moreover, the 400 MW required to run these miners and the necessary space were not accessible to anyone.

[d5000]

If you cut 2024's hashrate down to 10 EH, it would be ten times less secure than it was in 2018. Simply put, acquiring 5 EH, which was 50% of the total hashrate in 2018, was significantly more difficult than acquiring 5% of the hashrate today. The same logic applies to the cost, infrastructure, and availability of mining gear needed to perform the attack.

Yes, that's all taken into account in my simple formula. That's why I admitted that the security could be compared better to 2017 and not 2018/19. (Of course my formula is imprecise, but the idea was to know approximately the order of magnitude of the security we had with fees alone.)

Of course if hashrate dropped now to 50 EH/s, 95% of all miners went bankrupt and sold their equipment potentially to attackers, then the network would be seriously in danger. I don't dispute that. But we're here talking about a scenario for 2140. The process thus will be very gradual. Even if the equation for miners becomes already problematic in 10 years like MeGold666 feared, this would also not cause the hashrate to drop instantly to dangerous levels. We would probably have 10-20 years more where one after another miner would go bankrupt, and the end result would be a hashrate with a significantly cheaper attack cost. But probably the hashrate would still increase or stagnate, only that due to Moore's law and used equipment the attack cost would sink.

I also don't understand why market cap or block rewards have anything to do with this.

I actually agree here at least partly. The attacker's incentive could be higher if he can short enough coins to be able to profit from the resulting crash, so the market cap can have a small influence on incentives if we assume that "higher market cap" means "more value available for short selling on BTC lending markets", although the correlation is of course not direct. For double spends, as I wrote in the last post, the incentive should be linked to the transaction volume in a stable currency, i.e. how much he's able to steal with this double spend if he's able to rollback a block of transactions.

But in general what is most important in my opinion is the pure attack cost, i.e. the cost to acquire the hardware or hashrate to perform the attack.

Bitcoin suppose to be Digital Cash.
Monero is Digital Cash.

If Bitcoin had a sidechain with Monero-style ring signatures (and other privacy features) and small transaction fees, would this make it digital cash for you too?

[graphite]

As I wrote before, my "ideal" scenario would be a sidechain-backed tail emission plus fees.

I agree with this I think tail emissions plus fees are the best option long term. Transactions fees would need to be much higher to sustain current levels of mining hashrate which would scare people away from using the network. But also I fear the variability of transaction fees would destabilize the network. Tadge Dryja makes some good points about this in this MIT lecture https://www.youtube.com/watch?v=wXWbdiOBW5w at 58 minutes in. During large fee periods miners could end up fighting to reorg high fee blocks instead of mining new blocks.

Of course if hashrate dropped now to 50 EH/s, 95% of all miners went bankrupt and sold their equipment potentially to attackers, then the network would be seriously in danger.

One possibility is if mining fees are low enough to be vulnerable to attack large bitcoin holders could have mining power on stand by to turn on in case of an attack but that might just be wishful thinking. If I was Michael Saylor id probably have some rigs on stand by.

[anarkiboy]

If Bitcoin had a sidechain with Monero-style ring signatures (and other privacy features) and small transaction fees, would this make it digital cash for you too?

Sidechain would not be Bitcoin and why use something that convulsed when you can just use Monero on layer 1 ?
Seeing how Lightning Network is used, we can see people prefer simplicity:

https://www.reddit.com/r/Monero/comments/1e1b1r4/monero_crushes_bitcoin_on_shopinbit/
https://www.reddit.com/r/Monero/comments/1dxa26v/monero_beats_bitcoin_on_coincardscom/

We can theorize here but this market numbers speak for themself  

I don't even see Bitcoin as a store of value as it's a speculation vehicle without any other use case with very high volatility but even if it didn't had this problems, I wouldn't put substantial amount of money into a transparent blockchain.
Criminals can target you more easily and the government will know how much you have and can easily force you to pay tax from it before even converting to FIAT.
Monero is a Swiss account of 21th century  

If Bitcoin and Monero were physical banks, which would you choose ? the one that show your billings to the whole world and is slower and more expensive to use or the one that is faster, cheaper and private ?
Which one people will choose ? I think you know the answer  

Bitcoin is still a thing only in the mind of bag holders, it has nothing to offer compared to Monero.
But hey, that's just me and people who actually use cryptocurrencies in daily life.

If you're into "number goes up" then Monero has much bigger growth potential by being still so low in market cap.
In order for Bitcoin to hit 1 million USD evaluation it would need to do 15x and I don't think it will ever happen.
15x in Monero is very possible and it would still be pretty low in market cap with price evaluation at only ~2.4k USD and it will be much less volatile because it's actually used in real world and not only as a speculation vehicle.

I'm not trying to convince you on anything, I just wrote what I think and I'm not changing my mind on it 

[d5000]

Sidechain would not be Bitcoin and why use something that convulsed when you can just use Monero on layer 1 ?

It would not be "convulsed". It would be as easy as using wBTC tokens on Ethereum, and can be made as easy as simple Bitcoin transactions, because in the ideal case if you don't need the mainchain you can onboard on the sidechain and stay there. User experience would be much simpler than Lightning's current one.

In addition you could ask the contrary: why does the whole world (full nodes) needs to validate and store every $5 VPS payment? (to not always use the "coffee" analogy )

If Monero was used as much as Bitcoin is now, then eventually it would run into the same dilemma: node centralization (with lower censorshop resistance) or high fees. It has a dynamic block size, so it roughly follows the BCH/BSV model (with a few more restrictions if I remember correctly). This means that in the case of an usage boost XMR's node count could lower considerably if the CPU/RAM costs for nodes to validate transactions explode.

I like and also use Monero, but I also like to have choices, why should I adhere to a monoculture? Not every transaction needs to be as private as a XMR transaction. And Bitcoin has several advantages: simple transactions are smaller, and the Script language allows L2s like Lightning and sidechains and some other use cases, which afaik are not possible in this way on Monero.

That Lightning is stagnating currently is true, it could be related to the attacks discovered last year, but as a "prepaid-card"-like tool for small payments it works quite good as these attacks would never be profitable to steal low amounts, and usability can always be improved.

[anarkiboy]

It would not be "convulsed". It would be as easy as using wBTC tokens on Ethereum, and can be made as easy as simple Bitcoin transactions, because in the...

People are not using wBTC or LN to buy stuff, they use Monero - I have posted you the proof 

Did not read rest of your post, it's long and I have already proved my point   

[d5000]

Did not read

C'mon, don't leave such a bad impression for Monero shills.
Of course, those reading this discussion will draw their own conclusions. I think nobody here disputes that Monero is used somewhat for payments, and that's obviously a good thing. But this obsession to delegitimize Bitcoin? I don't understand that.
The problem is that the issue you "didn't read", the scaling dilemma, including the relations between block size, fees, block rewards, censorship resistance and node decentralization, is exactly the crucial point cryptocurrencies will have to solve eventually. And if Monero has no real plan for it then it has an adoption ceiling which probably is significantly lower than Bitcoin's. I hope most Monero folks are not that short-sighted.

[anarkiboy]

Did not read

C'mon, don't leave such a bad impression for Monero shills.
Of course, those reading this discussion will draw their own conclusions. I think nobody here disputes that Monero is used somewhat for payments, and that's obviously a good thing. But this obsession to delegitimize Bitcoin? I don't understand that.
The problem is that the issue you "didn't read", the scaling dilemma, including the relations between block size, fees, block rewards, censorship resistance and node decentralization, is exactly the crucial point cryptocurrencies will have to solve eventually. And if Monero has no real plan for it then it has an adoption ceiling which probably is significantly lower than Bitcoin's. I hope most Monero folks are not that short-sighted.

Your worries about scalability issues have been already answered by someone else in this thread  

tl;dr: Monero has no scalability limits on the protocol level, it is limited by the infrastructure which is constantly evolving and recently Monero community has been doing stress-tests from which we can see it has no problem running the same and even more transactions daily than Bitcoin but faster and for lower fees.

long story short, Bitcoin is handicapped on protocol level and trying to put all the weight on L2's with endless promises while we have Monero which delivers what Bitcoin only promises 

[graphite]

tl;dr: Monero has no scalability limits on the protocol level, it is limited by the infrastructure which is constantly evolving and recently Monero community has been doing stress-tests from which we can see it has no problem running the same and even more transactions daily than Bitcoin but faster and for lower fees.

Have they tested the cost to running a 51% attack on monero? From my understanding it should be pretty easy given the large number of server clusters in the world. One of the biggest hurdles to attack bitcoins network is the cost of hardware. Also a lot of governments don't like monero. Who's to say one day a wealthy enough government somewhere doesn't pay for a server cluster to attack monero for a few days to destroy its credibility?

[anarkiboy]

Have they tested the cost to running a 51% attack on monero? From my understanding it should be pretty easy given the large number of server clusters in the world. One of the biggest hurdles to attack bitcoins network is the cost of hardware. Also a lot of governments don't like monero. Who's to say one day a wealthy enough government somewhere doesn't pay for a server cluster to attack monero for a few days to destroy its credibility?

Due to current mining difficulty it would be logistically close to impossible to create such mining facility by single entity even by the government to 51% attack and due to privacy features of Monero the attack would not make so much damage as it could in Bitcoin.
If someone wanted to 51% attack Monero, they would do it years ago when it was actually somewhat feasible.

Governments don't like Monero ? It's just another reason to love Monero.
I personally wouldn't touch anything endorsed or even liked by the Government, hopefully Monero will never be liked by the government  

Monero has much better decentralization when it comes to mining contrary to Bitcoin which is mainly secured by big companies that need to obey the law and usually reside in one single physical place.

If government wanted to control Bitcoin and let's say impose a black listing of certain addresses then they would go after this mining companies and they would have to obey.
Due to this mining centralization in Bitcoin government can easily shut it down like we have seen in China mining ban when 75% of hashrate gone in short time.

If you are concerned about scalability issues and 51% attacks, you shouldn't be using Bitcoin because in this subject it is very bad 

[BlackHatCoiner]

Many people are concerned about the government executing a 51% attack on Monero. I think a more urgent problem is bloating the chain with spam, as it'd greatly hurt scalability. It'd be much more efficient and inexpensive to attack Monero like that, even though I haven't researched on the exact numbers.

[anarkiboy]

Many people are concerned about the government executing a 51% attack on Monero. I think a more urgent problem is bloating the chain with spam, as it'd greatly hurt scalability. It'd be much more efficient and inexpensive to attack Monero like that, even though I haven't researched on the exact numbers.

Bitcoin is already being bloated by bug exploitation which ordinals use and developers are still discussing if they should fix it  

Seriously, why are you guys so into Bitcoin when it's clearly inferior to the Monero in every possible way ?
Is it some kind of nostalgia thing ? or do you still believe it will hit 1 million USD evaluation ?

 

[BlackHatCoiner]

Bitcoin is already being bloated by bug exploitation which ordinals use and developers are still discussing if they should fix it 

There is nothing to be fixed. Spam can only be discouraged at a transaction fee level. Remember that Monero has a dynamical block size limit, and there are no UTXO. Every time you create an output, it is indexed forever.