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Author Topic: Another respected cryptographer predicts collapse in bitcoin mining  (Read 9976 times)
DeathAndTaxes
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February 25, 2012, 03:57:27 PM
 #61

The only way I see botnets replacing honest miners is if a way to mine coins solo is designed that doesn't require a bitcoin client running on the system.  This would let a botnet mine coins for a specific wallet address across all their solo miners. 

Private pool?

Still I doubt even then botnets can replace honest miners.  Botnet nodes are just so weak.  CPU can't compete with GPU farms and soon even GPU won't be able to compete with FPGAs.
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February 25, 2012, 04:02:24 PM
 #62

if there's one thing we've learned about these doom and gloom papers is that talk is cheap.

We have a lot of "experts"willing to throw around theories but not willing to put up the money, time, our effort to actually demonstrate their hypotheses.

  If there was anything to what they have to say then they'd just take  those millions and run

What the hell are you talking about? What would you have the experts do to demonstrate their hypothesis?

ok, let me spell it out for you.

if i were smart enough to develop a way exploit Bitcoin's code, i would either sell it for millions to someone who had the resources to implement the exploit or i would do it myself.  anyone can talk but the only way to prove it would be to do it.
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February 25, 2012, 05:31:38 PM
 #63

if there's one thing we've learned about these doom and gloom papers is that talk is cheap.

We have a lot of "experts"willing to throw around theories but not willing to put up the money, time, our effort to actually demonstrate their hypotheses.

  If there was anything to what they have to say then they'd just take  those millions and run

What the hell are you talking about? What would you have the experts do to demonstrate their hypothesis?

ok, let me spell it out for you.

if i were smart enough to develop a way exploit Bitcoin's code, i would either sell it for millions to someone who had the resources to implement the exploit or i would do it myself.  anyone can talk but the only way to prove it would be to do it.

You could also try to patch the exploit, would attempting to do that indicate stupidity?

Moreover, how is this relevant to the article? They are not even talking about an exploit.
 
Moreover, why would an exploit be worth millions? How could you extract that much of bitcoin's value before the bitcoin price collapsed. The most straightforward way of extracting value would be shorting on bitcoinica. It would be difficult to recover millions doing this. Do you picture Bitcoinica/Mt.Gox releasing money to people who place million dollar short bets right before an attack? Even if they were willing, do they even have that much liquidity lying around?

I don't agree with these guys, but your comments seem to be off in lala land.

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February 25, 2012, 06:07:54 PM
 #64

if there's one thing we've learned about these doom and gloom papers is that talk is cheap.

We have a lot of "experts"willing to throw around theories but not willing to put up the money, time, our effort to actually demonstrate their hypotheses.

  If there was anything to what they have to say then they'd just take  those millions and run

What the hell are you talking about? What would you have the experts do to demonstrate their hypothesis?

ok, let me spell it out for you.

if i were smart enough to develop a way exploit Bitcoin's code, i would either sell it for millions to someone who had the resources to implement the exploit or i would do it myself.  anyone can talk but the only way to prove it would be to do it.

You could also try to patch the exploit, would attempting to do that indicate stupidity?

Moreover, how is this relevant to the article? They are not even talking about an exploit.
 
Moreover, why would an exploit be worth millions? How could you extract that much of bitcoin's value before the bitcoin price collapsed. The most straightforward way of extracting value would be shorting on bitcoinica. It would be difficult to recover millions doing this. Do you picture Bitcoinica/Mt.Gox releasing money to people who place million dollar short bets right before an attack? Even if they were willing, do they even have that much liquidity lying around?

I don't agree with these guys, but your comments seem to be off in lala land.

you're right in the sense that its impractical to extracts millions from the chain or exchanges.  but i do think there are entities out there that would pay millions to destroy Bitcoin.
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February 25, 2012, 06:20:39 PM
 #65

Quote from: cunicula
Proof-of-work is fatally flawed and in the future alternative cryptocurrency will be based on a more sensible architecture... proof-of-stake.
 

Can you give an example of proof-of-stake? Not clear on what you mean.

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February 25, 2012, 06:43:53 PM
 #66


[Don't get me started on Austrian economics because that is complete wackjob rubbish that asshats believe in. I'm not responding to asshats here. It is not an enjoyable use of my time.]


Neither, it is enjoyable for us "asshats" to use our time to read your rubbish. Do everyone a favor, stop posting anything at all.

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February 26, 2012, 05:13:50 AM
 #67

Quote from: cunicula
Proof-of-work is fatally flawed and in the future alternative cryptocurrency will be based on a more sensible architecture... proof-of-stake.
 

Can you give an example of proof-of-stake? Not clear on what you mean.
Yes pretty please enlighten us ignorant posters what proof-of-stake means.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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February 26, 2012, 06:56:58 AM
 #68

Quote from: cunicula
Proof-of-work is fatally flawed and in the future alternative cryptocurrency will be based on a more sensible architecture... proof-of-stake.
 

Can you give an example of proof-of-stake? Not clear on what you mean.
Yes pretty please enlighten us ignorant posters what proof-of-stake means.

It means those with the highest coin holdings (wealthiest) are the only ones able to sign blocks and transactions, being able to do it without requiring heavy work. The reasoning is that since they have the most coin wealth, they have the most to lose, and thus they won't try to screw the network, lest they crash the price of the coin and lose everything. The idea is also that they will have the most incentive to protect it.

Prof-of-stake sounds like a good idea only until you realize that it already exists, and is called USD and Federal Reserve.

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February 26, 2012, 10:35:06 AM
 #69

if there's one thing we've learned about these doom and gloom papers is that talk is cheap.

We have a lot of "experts"willing to throw around theories but not willing to put up the money, time, our effort to actually demonstrate their hypotheses.

  If there was anything to what they have to say then they'd just take  those millions and run

What the hell are you talking about? What would you have the experts do to demonstrate their hypothesis?

From a quick read of the paper, it seems that the authors consider price of electricity (in USD) and exchange rate of the bitcoins (BTC/USD) to be independent variables.
This hypothesis is most certainly wrong.
However the price of electricity over time becomes a very small driver of the BTC price as the main driver is the growing demand as the bitcoin economy grows.
If bitcoin serves only a small fraction of today's undergound economy, it can be shown that the price of bitcoins should be in the hundreds of dollars, far above the electricity cost component of the price.

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February 26, 2012, 12:01:55 PM
 #70

If bitcoin serves only a small fraction of today's undergound economy, it can be shown that the price of bitcoins should be in the hundreds of dollars, far above the electricity cost component of the price.

until a shitload more people start mining realizing that there is profit to be had... it's not like we haven't seen this already

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February 26, 2012, 12:09:39 PM
 #71

If bitcoin serves only a small fraction of today's undergound economy, it can be shown that the price of bitcoins should be in the hundreds of dollars, far above the electricity cost component of the price.

until a shitload more people start mining realizing that there is profit to be had... it's not like we haven't seen this already
until that shitload of people then realize that bitcoin is a great investment because it's worth hundreds of dollars and decide to hoard instead.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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February 26, 2012, 12:21:13 PM
 #72

until that shitload of people then realize that bitcoin is a great investment because it's worth hundreds of dollars and decide to hoard instead.

because it's a great investment people are going to stop mining? I don't follow your logic one bit

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February 26, 2012, 12:35:38 PM
 #73

until that shitload of people then realize that bitcoin is a great investment because it's worth hundreds of dollars and decide to hoard instead.

because it's a great investment people are going to stop mining? I don't follow your logic one bit
Hashrate has fallen since July. Bitcoin isn't worth mining right now, but it is worth buying.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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February 26, 2012, 12:37:09 PM
 #74

until that shitload of people then realize that bitcoin is a great investment because it's worth hundreds of dollars and decide to hoard instead.

because it's a great investment people are going to stop mining? I don't follow your logic one bit
Hashrate has fallen since July. Bitcoin isn't worth mining right now, but it is worth buying.
That all depends on electricity and equipment costs.
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February 26, 2012, 12:38:33 PM
 #75

Hashrate has fallen since July. Bitcoin isn't worth mining right now, but it is worth buying.

and the sell price in july vs the sell price now? I mean really...

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February 26, 2012, 01:04:48 PM
 #76

until that shitload of people then realize that bitcoin is a great investment because it's worth hundreds of dollars and decide to hoard instead.

because it's a great investment people are going to stop mining? I don't follow your logic one bit
Hashrate has fallen since July. Bitcoin isn't worth mining right now, but it is worth buying.

It's worth mining for some people who have the right equipment. I agree that it's worth buying for most people more than it's worth mining, right now. Esp. if you don't have any decent mining equipment beforehand.

Hashrate declined sharply right after the Big Crash but has been catching up ever since and it's close to historical maximums already.

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February 26, 2012, 01:12:59 PM
 #77

Hashrate has fallen since July. Bitcoin isn't worth mining right now, but it is worth buying.

and the sell price in july vs the sell price now? I mean really...
The sell price is lower now than in July. Are you saying that makes mining more worthwhile? I fail to see your logic here.  Tongue

I suppose for some very efficient mining rigs it may be marginally profitable, especially if the heat is valued as well. My mining rig will be shut down very soon if the price does not increase with the outside temperature.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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February 26, 2012, 01:18:59 PM
 #78

The sell price is lower now than in July. Are you saying that makes mining more worthwhile? I fail to see your logic here.  Tongue

looking at bitcoincharts, the lowest the price dipped in july was around $12. the lowest in august was around $7.

and either way, your post still was completely non sequitur to mine.

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February 26, 2012, 01:40:55 PM
 #79

Just for reference.

Difficulty and hashrate, linear:



exponential axis:




Gartner hype graph:




One has to understand that right after the GPU breakthrough in mining there hasn't really been any game changer (maybe FPGA's if they enter in sufficient quantity and when they do) and also that the Radeon 5xxx HD series hasn't really been beaten in terms of bang for the buck, as one would expect years after their release. Basically you cannot get a much better card than a high end 5xxx series for mining, as one would expect 2 generations later.

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February 26, 2012, 03:00:01 PM
 #80

The sell price is lower now than in July. Are you saying that makes mining more worthwhile? I fail to see your logic here.  Tongue

looking at bitcoincharts, the lowest the price dipped in july was around $12. the lowest in august was around $7.

and either way, your post still was completely non sequitur to mine.
I'm glad you think that way. I hope miners keep selling their bitcoin in the $4-5 range. I'll keep buying them and we're all happy.  Grin

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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