rpietila Altcoin Observer

[itod]

Having GPU miner as part of the release bundle at very launch has to be mandatory for coin to be considered as "fairly" launched. CPU2GPU ratio is irrelevant. Even if it is 1:1 it simply has to be released immediately.

I disagree. We are eagerly awaiting for a coin that would *never* have a GPU miner, only CPU. There are people working on this, and Cuckoo Cycle looks the most promising. First coin which achieves this may be a revolution, with millions of individual miners finally being able to get involved in cryptocurrency.

The botnets indeed eagerly await this.  I'm pretty sure this is a philosophically wrong goal, but we can debate that another time.

Botnets are unimportant and not an issue. How many +10k botnets are there? Even less +100k botnets, you can probably count them all manually. And only Android has +1Billion 30-day active users:
http://techcrunch.com/2014/06/25/google-now-has-1b-active-android-users/
All botnets combined are just drop in the sea if only a part of those mobile users got involved in mining while devices charge overnight. That's the best chance to bring cryptocurrency to the masses and scale the number of users by few orders of magnitude.

Mobile devices can only mine while plugged in.  Their relative mining power is still very small - 1 billion 32 bit 1.6ghz dual core ARM chips are not insignificant, but when operating at less than, say, 25% duty cycle, that's roughly the equivalent of a few tens of millions of powerful servers.  Most users won't mine, period -- the ROI is extremely small compared to the time & knowledge needed to set it up, unless the device "just did it" preconfigured.  (But that's close to a mobile phone botnet).

How many nodes are involved in botnets worldwide?  This list is very out of date, but listed the largest as having 30 *million* nodes:

http://en.wikipedia.org/wiki/Botnet#Historical_list_of_botnets

More importantly, remember that botnet operators are, in the most fundamental sense of the word, total assholes.  They waste someone else's resources to accomplish their own gain.  They don't pay power, they don't pay capex, etc.  As a result, they asymmetrically benefit from CPU-only coins as a mechanism to monetize stolen computer access.

You are reading it wrong, modern dual/quad core ARM chips would mine with comparable mining power to ordinary botnet node, considering that they will mine while phone is absolutely idle (night) they may even be on par with desktop computers which have to do something else while they mine. The larger the botnet, the shorter it last because they are easier to detect, so even if there are some of them which have multi-million nodes, what's that compared to thousands of millions of active mobile users?

I don't understand why do you think people would not mine if the mobile miner has an easy, mobile app style installation? Once they realize the potential, they have nothing to lose and everything to gain. People are not (that) stupid. We just need the right algorithm to be absolutely GPU resistant, and  Cuckoo Cycle is on the brink of being that. Once it happens, there will be no going back. The altcoin which achieves that will be a real silver to Bitcoin's gold.

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[tromp]

Or have an emission curve with a slow, flat initial period before ramping up to real.

Imagine if XMR's curve had looked like:

days 0-30:  1 xmr/block
days 31-90:  1 + 16 * (day-30)/60) xmr/block
days 91 onwards:  using the existing XMR mechanism

I agree wholeheartedly. Except the reward should converge to something nonzero.
With some small percentage of coins inevitably getting lost every year,
perpetual debasement serves long-term security while avoiding deflation.

[Este Nuno]

Thinking that the average person is ever going to be able to profitably mine a CPU only coin seems like wishful thinking.

[tromp]

You are reading it wrong, modern dual/quad core ARM chips would mine with comparable mining power to ordinary botnet node, considering that they will mine while phone is absolutely idle (night) they may even be on par with desktop computers which have to do something else while they mine.

Botnet mining also needs to remain stealthy and fly under the radar.

Memory intensive PoWs are particularly troublesome because you cannot easily throttle RAM usage like you can CPU usage. Users are very likely to notice when you accidentally send their machine into swap-hell...

[tromp]

Thinking that the average person is ever going to be able to profitably mine a CPU only coin seems like wishful thinking.

People like to play in lotteries...

[smooth]

The most important thing to learn from Cuckoo Cycle is that he's doing it *right* -- he's treating his proposed proof-of-work in the same way professionals treat proposals for encryption or hash algorithms by publishing a clear spec and implementation, soliciting comments, and even funding (from his own pocket, no less) further evaluation and analysis.  BEFORE it's used in a coin.

There is nothing inherently wrong with a coin as a testbed for a new algorithm. It is a case where the mining incentivizes something useful (testing and optimizing the algorithm), not unlike other coins where the mining process is intended to produce some useful scientific or mathematical result.

Where this ends up being bad is when the developer makes either dishonest or unsupported claims about the algorithm (e.g. "this won't be feasible to mine on a GPU") as opposed to being up front about the algorithm being experimental and unknown and seeing where it ends up.

[itod]

You are reading it wrong, modern dual/quad core ARM chips would mine with comparable mining power to ordinary botnet node, considering that they will mine while phone is absolutely idle (night) they may even be on par with desktop computers which have to do something else while they mine.

Botnet mining also needs to remain stealthy and fly under the radar.

Memory intensive PoWs are particularly troublesome because you cannot easily throttle RAM usage like you can CPU usage. Users are very likely to notice when you accidentally send their machine into swap-hell...

The idea is not to make users unaware of the mining software running, it's to make them easily configurable to run when the users do not mind it at all. There are API calls in Android (and I suppose on other mobile platforms also) to start an app only when the phone is on charger and not moved for some time. Once you wake up and grab your phone, the app can stop until the next night charging cycle. I doubt anyone would mind that, and if you can do something useful and get some value from using such an app many people would give it a go. Compare that with cost of entry to mine today. No wonder that cryptocoin penetration with general population is as low as it is now.

[rpietila]

Thinking that the average person is ever going to be able to profitably mine a CPU only coin seems like wishful thinking.

Economic fact:

Mining cannot provide real returns.

[rpietila]

As a result, they asymmetrically benefit from CPU-only coins as a mechanism to monetize stolen computer access.

This only applies if mining is clearly more profitable than any other activity.

[itod]

Economic fact:

Mining cannot provide real returns.

And so cannot lottery. There's a few hundred times greater chance to be hit by lightning than to win the lottery, nevertheless world lottery revenues are around US$ 500 billion. Please read that figure again and say that to people who run every day to buy lottery tickets around the world.

People just love to get much from investing small, nothing attracts them more. Instead to bringing that to our advantage in cryptocurrencies, we did absolutely the opposite, making it harder and harder for average Joe to mine and we called that an improvement. Instead of making every computer (or a mobile phone) a miner, we have a relatively few giant mining farms which point close to 50% hashrate to CEX.io. 100% of altcoins are racing to get in the same situation fast.

I'm just saying that CPU-only mining is the *fastest* way to get general adoption. The only problem is it's really, really hard to get GPU/ASIC resistant algorithm, but that will be solved eventually.

[nioc]

For a one dollar lottery ticket I have a very small probability of winning millions.  What is the upside of mining with my CPU and would that be enough to entice people?

[itod]

For a one dollar lottery ticket I have a very small probability of winning millions.  What is the upside of mining with my CPU and would that be enough to entice people?

You've said it: a small probability. Have you ever personally met anyone who won a lottery? I'm almost certain you haven't, but nevertheless you go to that corner shop every week and buy the new one.

Mobile processors are extremely optimised for electricity consumption. I don't know how many watts would 8 hours of night mining consume, but it will probably be a small amount. Are you willing to risk it for a chance to find a block? If you play a lottery one can safely assume you would. Provided ofc it's extremely convenient to you just like going to that store is, just start it once and forget it, checking for results now and then. Once an average Joe takes a second look at that app on his phone he may find that option to send some funds to others may be as interesting as mining.

[smooth]

Not every lottery is for millions. People spend a lot of money on daily drawings for smaller amounts, scratch off tickets with $500-$10000 max prizes, etc. Go into a casino and most slot machines don't have million dollar payoffs (thousands are common) and you see lots and lots of people playing them.

[TooDumbForBitcoin]

Set up mining rigs in Vegas.  25 cents gets you 2kWh and a certain number of hashes.  Keep popping quarters 'til you get a block.  When you win, nothing comes out, cause it's virtual.  But the txid comes up on the display.   Ding ding ding ding.

[tromp]

Set up mining rigs in Vegas.  25 cents gets you 2kWh and a certain number of hashes.  Keep popping quarters 'til you get a block.  When you win, nothing comes out, cause it's virtual.

Would be nice to have a paper wallet popping out...

[JorgeStolfi]

Set up mining rigs in Vegas.  25 cents gets you 2kWh and a certain number of hashes.  Keep popping quarters 'til you get a block.  When you win, nothing comes out, cause it's virtual.  But the txid comes up on the display.   Ding ding ding ding.

From that perspective, it seems relevant to ask which coin offers the largest "jackpot"  (single-block reward), in USD, regardless of the odds.

[nioc]

Not every lottery is for millions. People spend a lot of money on daily drawings for smaller amounts, scratch off tickets with $500-$10000 max prizes, etc. Go into a casino and most slot machines don't have million dollar payoffs (thousands are common) and you see lots and lots of people playing them.

You know I started my life here at bct in the gambling section.

Intermittent reinforcement.  That is the key to scratch offs and slot machines.  It is the small random winnings (while they are actually losing) that keep them coming back or staying for the possible bigger payment.  I knew somebody who said they found a good slot machine.  They said "I put 3 coins in and it gives 2 back".  I said, no it took one, to which they replied, oh.

So either it is the promise of a very big payout with proof thereof or constant random reinforcement with the promise of something bigger.  It seems to me that mining with your CPU gives neither.

[smooth]

Mobile processors are extremely optimised for electricity consumption. I don't know how many watts would 8 hours of night mining consume

Standard phone chargers are 1 A at 5 V or 5W, so running flat out for 8 hours is 40 WH = 0.040 kwh. At 15c/kwh that is 6/10 of one penny. So the "risk" here is really negligible. The key is to make it easy enough for people to do, so they don't need a reason to do it, they need a reason to not do it, and there really isn't one.

And while low in power, these CPUs are very efficient in terms of compute power per watt.

A billion of those is 5 GW. Even at 25% duty cycle that is over 1 GW. At 1 W/GH total bitcoin mining (120 PH) is currently around 120 MW = 0.120 GW.

Cell phone CPU mining could be very significant if it became popular on a large scale.

[dga]

As a result, they asymmetrically benefit from CPU-only coins as a mechanism to monetize stolen computer access.

This only applies if mining is clearly more profitable than any other activity.

Well - I'll stand by my phrasing while agreeing with your higher level point.

Botnet wranglers have an advantage over "normal" miners, and if they're not a dominant fraction of the mining that's happening, they should be able to mine with a comfortable profit while everyone else's net profit is driven to (close to) zero.

But absolutely:  Botnets face the same decision of what to do with their resources, and they'll only mine if there is not some other more profitable activity that doesn't require the CPUs and/or that the mining activity does not so increase their chance of detection that it's a net loss compared to more profitable activities such as spam, keylogging, etc.  I suspect that in practice, the latter is the real limiter, since many of these activities do not consume massive amounts of CPU and could in theory be performed concurrently.  Slow, hot computers make people think "eek, virus!" which is close enough to the mark.

[smooth]

Botnet wranglers have an advantage over "normal" miners, and if they're not a dominant fraction of the mining that's happening, they should be able to mine with a comfortable profit while everyone else's net profit is driven to (close to) zero.

As I've said before, from the point of view of the coin network, botnets are just another form of mining rig. Assuming what you wrote above is true (though it is harder to understand the botnet owner's cost structure as you point out), this is not very different from someone mining with a 0.5 W/GH ASIC while someone else is still mining with older 1 W/GH ASICs. Obviously the guy with the 0.5 W/H has a higher profit margin, and the guy with the worst efficiency is barely breaking even.

It is most certainly different to the computer owner, but I've also said before that botnet mining is very likely less socially harmful than other uses of botnets (spam, DDOS, etc.) because the costs are borne by the computer owner who is in the best position to either prevent it or address it.

EDIT: One last point. Probably the best way to detect a mining botnet on your computer is to mine with it. If your hash rate drops then you know something is wrong, be it hardware failure, software failure, or a botnet. There is no way for a botnet owner to steal your hash rate without reducing your hash rate.