Preventing Asic mining [fork] after next halving would solve a lot of problems.

[amaclin]

It's an interesting experiment, isn't it?  I can't wait to see how it plays out.  I tend to believe that the market forces and incentives are such that it will always be more profitable to participate than to attack.  I guess all we can do is wait a few decades and see.

As for me: it was a very interesting experiment.
It proved once again that people think only about profits and can forget about everything else. Math, physics, principles...
I think that we will see the results of this not in decades, but in months or even weeks.

[DannyHamilton]

It's an interesting experiment, isn't it?  I can't wait to see how it plays out.  I tend to believe that the market forces and incentives are such that it will always be more profitable to participate than to attack.  I guess all we can do is wait a few decades and see.

As for me: it was a very interesting experiment.
It proved once again that people think only about profits and can forget about everything else.

Correct.  Bitcoin was specifically designed with this concept.  Offer profits to secure the network. Eventually rely on fees to pay for it.  As long as a significant percentage of the world population is greedy, bitcoin works.

I think that we will see the results of this not in decades, but in months or even weeks.

So, we can return to this conversation in a year and see if you were right?

[amaclin]

True.  And right now, it is still growing.  Therefore, right now, the longer that attacker waits the more expensive that attack is going to be.

The main idea is that... I do not know how to explain math of it in English...
The cost for attack is not a continuous function. It grows and right now it is very high.
But one moment in future it will rapidly fall to zero.

Offer profits to secure the network.

This has no sense. Securing has a cost. Either you secure the network, or you gain profits.
This is a law of nature.

As long as a significant percentage of the world population is greedy, bitcoin works.

No. It is only a ponzi where the next levels of pyramid give their funds to early adopters.

So, we can return to this conversation in a year and see if you were right?

I will be happy to talk about cryptography and ecdsa and math/physics itself with the people who really love them.

[gmaxwell]

But one moment in future it will rapidly fall to zero.

Similar to how one moment in the future people will stop posting half-informed hand-waving to this forum?

You can keep asserting things like this-- but you've given no justification. There is no mechanism by which the security is expected to "rapidly fall to zero" known to me.

[naplam]

But one moment in future it will rapidly fall to zero.

Similar to how one moment in the future people will stop posting half-informed hand-waving to this forum?

You can keep asserting things like this-- but you've given no justification. There is no mechanism by which the security is expected to "rapidly fall to zero" known to me.

I don't know what he's talking about either, but I can think of scenarios where Bitcoin's security is compromised. Imagine a rapid price drop to $10 right now -say, as rapid as the rise from $10 a while ago, nothing more spectacular than that. All of a sudden, practically all mining operations cease because they're no longer profitable. But then there's tons of mining equipment left to perform attacks by mining for short periods of time.

[amaclin]

I don't know what he's talking about either, but I can think of scenarios where Bitcoin's security is compromised. Imagine a rapid price drop to $10 right now -say, as rapid as the rise from $10 a while ago, nothing more spectacular than that. All of a sudden, practically all mining operations cease because they're no longer profitable. But then there's tons of mining equipment left to perform attacks by mining for short periods of time.

Yes. I say exactly these words. Sorry, my English is poor and some persons do not understand me.
Thank you for your comment.
Now let us think
1) what is the "critical" price for bitcoin for such scenario. $10? or $25? or $50? or $250?
2) should the price drop rapidly? what do we mean by "rapid price drop"? Losing 10% in a week is enough rapid?
3) what is the best strategy to the holders of large bitcoin stacks when the price is near to critical value?
3a) what is the best strategy for the holders of large amount of $ when bitcoin price is close to critical value?

[cr1776]

But one moment in future it will rapidly fall to zero.

Similar to how one moment in the future people will stop posting half-informed hand-waving to this forum?

You can keep asserting things like this-- but you've given no justification. There is no mechanism by which the security is expected to "rapidly fall to zero" known to me.

I don't know what he's talking about either, but I can think of scenarios where Bitcoin's security is compromised. Imagine a rapid price drop to $10 right now -say, as rapid as the rise from $10 a while ago, nothing more spectacular than that. All of a sudden, practically all mining operations cease because they're no longer profitable. But then there's tons of mining equipment left to perform attacks by mining for short periods of time.

The question is whether the current ongoing costs to run the miners are higher than the value of the bitcoin mined, not necessarily the sunk cost of purchasing it.  That ongoing cost is actually quite low, so it seems unlikely that the fiat value of bitcoin would drop sufficiently to cause them to shut down the miners.  It could drop enough so that new mining hardware's ROI isn't merely somewhat negative, but hugely negative in which case the manufacturers would have to drop their prices or be stuck with a lot of inventory.

Likewise, if one assumed that the miners did shut down their hardware because even the ongoing costs were too high and dumped it at a loss, you (or someone else) might be able to purchase the miner at 5 cents on the dollar and for you a purchase at  that price would be profitable and the miner would be back supporting the network.

Just like no one would buy an Avalon 1 at its initial cost during the fall of 2013 because it would not have a positive ROI, but might if someone sold it for a penny.  Then it might have covered its cost and been slightly profitable (or pick some other ASIC that fits that scenario, I didn't run the exact numbers for it.)

[gmaxwell]

The security argument for Bitcoin works if you set the price of mining hardware to zero-- Bitcoin is proof of work, the input to work is _energy_. The security argument is generally insensitive to price except at the extreme limit of $0 (and there... there are more things to worry about than reorgs).

You have a mutually exclusive choice for what to do with your units of energy available to you. You can attack, devaluing the Bitcoin you gain from your attacks, or you can mine honestly and protect your existing Bitcoins and the new transaction fees you receive.

The market price of Bitcoin has changed >10 fold in the past and there were no security incidents as a result.

[amaclin]

Likewise, if one assumed that the miners did shut down their hardware because even the ongoing costs were too high and dumped it at a loss, you (or someone else) might be able to purchase the miner at 5 cents on the dollar and for you a purchase at  that price would be profitable and the miner would be back supporting the network.

After I buy a 51% of switched off miners for 5 cents per THs I wouldn't support network. I will attack it!  No doubt!

[DannyHamilton]

Likewise, if one assumed that the miners did shut down their hardware because even the ongoing costs were too high and dumped it at a loss, you (or someone else) might be able to purchase the miner at 5 cents on the dollar and for you a purchase at  that price would be profitable and the miner would be back supporting the network.

After I buy a 51% of switched off miners for 5 cents per THs I wouldn't support network. I will attack it!  No doubt!

That's ok, I'll buy them at 6 cents per THs and counter your attack.

You lose.

 

[amaclin]

That's ok, I'll buy them at 6 cents per THs and counter your attack.

What will you do with so much power? I do not understand. Will you support the network? It is absolutely the same as mining on cpu now.
It is useless. You only support miners who have old hardware.

In fact, I do not have funds for attack. But it doesn't mean that nobody has.