Hypothetical price collapse and massive farms failure.

[spazzdla]

Lets stay the price drops to.. I dunno $40(please do not debate if some epic price fall is possible, not the point of the thread)

What do you think would happen if the massive farms were forced to shutdown due to the price falling apart?
 
Besides the hashrate dropping..

[Odalv]

maybe we will be able to buy cheap asics :-)

[jertsy]

Would each confirmation take hours?

[JimboToronto]

Would each confirmation take hours?

Only until the next difficulty adjustment.

[Pecunia non olet]

Would each confirmation take hours?

Only until the next difficulty adjustment.

which takes ages for bitcoin because it has no KGW
To my knowledge it adjusts only every 14 days.

So, yes. Confirmations would take hours then - for the next 14 days at least.

A further selloff could be expected from such a situation starting another death-spiral for bitcoin. It's really good with those negative feedbackloops, isn't it?

[RyNinDaCleM]

Would each confirmation take hours?

Only until the next difficulty adjustment.

In 2011, Namecoin was driven up by high hashrate and pretty much abandoned. This caused blocks to take hours and retargets to take months. This is what sparked merged mining because if it wasn't for that, Namecoin would have been a complete failure. There is nothing higher hashrate to merge Bitcoin with. If an ASIC exodus were to happen, it may ruin Bitcoin.

[protokol]

I doubt that the confirmations would ever take hours, because the big farms simply wouldn't all switch off at the same time.

Some smaller ones might switch off after 2 or 3 days (when their power bill funds ran out), but most would keep running for at least a week or two, and survive on saved funds. Others would scale down their operation gradually. If the price were to drop to $40, there would probably be a smooth decline in hashpower lasting many months.

[BlindMayorBitcorn]

Would each confirmation take hours?

Only until the next difficulty adjustment.

That would be a wild 2 weeks!

[byronbb]

Perhaps the current price decline was manufactured by large farms for the very purpose of lowering difficulty and extending their hardware life-cycle?

[coinableS]

What do you think would happen if the massive farms were forced to shutdown due to the price falling apart?

I don't know what would happen in the grand scheme of things, but for me I would dig out my old bitmain u2s and block erupters. I would then solo mine and hope I get lucky 

[Pecunia non olet]

Perhaps the current price decline was manufactured by large farms for the very purpose of lowering difficulty and extending their hardware life-cycle?

no, i don't think so. It's built in with the inflation and also some early investors taking profits of course after 100000% profit ...

[BlindMayorBitcorn]

Perhaps the current price decline was manufactured by large farms for the very purpose of lowering difficulty and extending their hardware life-cycle?

no, i don't think so. It's built in with the inflation and also some early investors taking profits of course after 100000% profit ...

Agreed

[Muuurrrrica!]

soon it's not hypothetical anymore.

Question:
what do we do when bitcoin fails?

What is Plan B? Is there a Plan B?

[Wandererfromthenorth]

soon it's not hypothetical anymore.

Question:
what do we do when bitcoin fails?

What is Plan B? Is there a Plan B?

Hint: It starts with "R" 

[Muuurrrrica!]

soon it's not hypothetical anymore.

Question:
what do we do when bitcoin fails?

What is Plan B? Is there a Plan B?

Hint: It starts with "R"  

dogecoin? 

[RyNinDaCleM]

soon it's not hypothetical anymore.

Question:
what do we do when bitcoin fails?

What is Plan B? Is there a Plan B?

Hint: It starts with "R"  

(R)un for the exits?

Well, it just can't be Ripple... 

[MrTeal]

Would each confirmation take hours?

Only until the next difficulty adjustment.

That would be a wild 2 weeks!

It wouldn't be weeks, each difficulty readjustment period is 2016 blocks regardless of how long each block takes.

[Undermood]

there is further selloff until no one is willing to buy it! The investors will be looking for alternative altcoin as an investment instrument. Probably some other altcoin will break out and take the place of the bitcoin!

[ElectricMucus]

A massive price collapse paired with a massive miner dropout has nearly destroyed Namecoin once.

That is harder to happen with Bitcoin but it's also that much harder to recover from since there are no alternatives and simply limping to the next difficulty adjustment won't help. Namecoin went to merged mining as a solution, so if that happens to Bitcoin it has to go on over several difficulty adjustments, which may never happen if miner dropout continues.
In that case the Blockchain grinds to a halt, with months between blocks until nobody even bothers to store the Blockchain.

Most people here will claim this can never happen. 

[Pecunia non olet]

It wouldn't be weeks, each difficulty readjustment period is 2016 blocks regardless of how long each block takes.

fuck. haha

So an asic exodus would in fact mean it's done never to come back ... as difficulty adjustement will take much longer than 2 weeks - further sellofff, further dropout of hashpower and so on. In the end of it everybody stops mining because there's no sense in it ...

wait a second - does this mean any sudden and sharp drop in hashrate automatically kills bitcoin?

[fran2k]

The network will became slower, taking more time for each confirmation/block to come.

This happened in some dead old altcoins. Now most use dynamic difficulty adjustment in every block, DGW, KGW, etc.

Last known example was in Protoshares with difficulty adjustment taking several blocks and may be waiting 4-6 hours for a damn block to confirm your transaction.

Clearly people would increment the transaction fee to incentive the miners. Also the amount of transactions in a block would increase because of the decrease in blocks / time incrementing the corresponding additional reward.

[BitcoinNational]

soon it's not hypothetical anymore.

Question:
what do we do when bitcoin fails?

What is Plan B? Is there a Plan B?

Hint: It starts with "R"  

and it ends with "UN"

[Pecunia non olet]

In other words: slower transactions will cost more to send?

he talked about bitshares with 4-6 hours adjustement ... bitcoin would simply be sold off and abandoned if it came to that because 2016 blocks adjustement is two weeks - but only two weeks at normal blocktime. Get the spin?

Network would come to a halt most likely.

My question remains:
does any sudden and harsh drop in hashrate automatically cause this scenario to happen?

Is a single serious set-back in hashrate the end of BTC? Is it really that easy to knock out? OMFG!

What happens when a large pool with let's say 30% of the network has technical problems and just goes offline and hash isn't replaced fast enough? Bitcoin dead?

Looking for some answers here

[RyNinDaCleM]

In other words: slower transactions will cost more to send?

he talked about bitshares with 4-6 hours adjustement ... bitcoin would simply be sold off and abandoned if it came to that because 2016 blocks adjustement is two weeks - but only two weeks at normal blocktime. Get the spin?

Network would come to a halt most likely.

My question remains:
does any sudden and harsh drop in hashrate automatically cause this scenario to happen?

Is a single serious set-back in hashrate the end of BTC? Is it really that easy to knock out? OMFG!

What happens when a large pool with let's say 30% of the network has technical problems and just goes offline and hash isn't replaced fast enough? Bitcoin dead?

Looking for some answers here

No, that wouldn't kill Bitcoin because A) most of those miners would point their miners at another pool or solo mine and B) it's usually a safe bet that the pool would come back online eventually. The worst that would happen in that scenario would be an easier (still not easy by any means) shot at a 51% attack.

If we lost a significant amount of hash power just because of miners giving up, then that is a different story. 30% would slow transactions, but the remaining 70% would be able to support the network through a couple of retargets until it equalizes. 60% loss in a few days would be difficult to recover from.

[Pecunia non olet]

certainly interesting ... need to get coldstorage more easily accessible right NAO! 

[screwUdriver]

In other words: slower transactions will cost more to send?

he talked about bitshares with 4-6 hours adjustement ... bitcoin would simply be sold off and abandoned if it came to that because 2016 blocks adjustement is two weeks - but only two weeks at normal blocktime. Get the spin?

Network would come to a halt most likely.

If we saw a massive drop in the hashrate for whatever reason the protocol would probably would be get forked so that the difficulty would adjust ahead of schedule on a one time basis. We would probably need to see a very large drop in the hashrate, likely exceeding 50% in a less then two week period.

My question remains:
does any sudden and harsh drop in hashrate automatically cause this scenario to happen?

assuming the network continues to have 100% luck then yes a drop in the hashrate will cause the confirmation time to increase

Is a single serious set-back in hashrate the end of BTC? Is it really that easy to knock out? OMFG!

What happens when a large pool with let's say 30% of the network has technical problems and just goes offline and hash isn't replaced fast enough? Bitcoin dead?

The miners should have at least two fallover (or backup) pools in the event the primary pool is not working. The miners should switch to other pools automatically and without the intervention of their owners/operators

Looking for some answers here

[BlindMayorBitcorn]

How about a hypothetical slow bleed down to double digits. Not so Hollywood, but much more likely

[johnyj]

The difficulty is rising again, profit driven farms might go underwater and close down, but they might become a perfect place to hide money: You send money to buy mining rigs and get fresh bitcoins out of it, so I guess the farms will still thrive until further regulation fall upon mining industry

[jehst]

the price of ASICs drops to almost nothing. people with access to free or near-free electricity (e.g. icelanders) buy the ASICs and start mining. people who are already mining with free electricity just keep going.

not a big deal.

[inca]

FUD FUD FUD

Why would there be a total price collapse? The reason the price has sat at 300 is because the market is pricing BTC at 300. Miners won't dump and destroy their business model.

Keep dreaming

[spazzdla]

How about a hypothetical slow bleed down to double digits. Not so Hollywood, but much more likely

Same difference.  The massive farms would be forced to shutdown.

The idea of transactions slowing down and killing BTC is utterly silly.  It would recalculate not even bother worrying about.

IMO it would be the start of a bull run as everyone mining would be hording.. well I figure they would be anways.

[spazzdla]

FUD FUD FUD

Why would there be a total price collapse? The reason the price has sat at 300 is because the market is pricing BTC at 300. Miners won't dump and destroy their business model.

Keep dreaming

Go talk about how it's impossible in the other 7 billion threads I really don't care if you think it's possible or not.  If you think this is a FUD thread you need to take your head out of your ass.

[NotLambchop]

...
The idea of transactions slowing down and killing BTC is utterly silly.  It would recalculate not even bother worrying about.
...

As long as BTC price decline is gradual, but big corrections/reward halvings?  Sure we had them before, but the last halving kinda coincided with new tech--FPGA/ASIC miners.  Now quantum leaps like that are pretty unlikely, and ASICs can't be sold off on EBay like vid cards. If mining costs = ~value of the coins mined during the halving, and if there's a more profitable SHA256 clonecoin to shift the hashpower to...
Not saying will happen, but not impossible.  

[dataispower]

soon it's not hypothetical anymore.

Question:
what do we do when bitcoin fails?

What is Plan B? Is there a Plan B?

Hint: It starts with "R"  

dogecoin?  

It might sound as a joke to you but Dogecoin inflation rate is much lower today than bitcoin and will be even lower later (Litecoin inflation rate is even worse than bitcoin).

Dogecoin and bitcoin estimated inflation rate for the next 10 years:

2015: Bitcoin: 10.00% | Dogecoin: 5.20%
2016: Bitcoin: 9.09%   | Dogecoin: 4.94%
2017: Bitcoin: 4.17%   | Dogecoin: 4.71%
2018: Bitcoin: 4.00%   | Dogecoin: 4.50%
2019: Bitcoin: 3.85%   | Dogecoin: 4.30%
2020: Bitcoin: 3.70%   | Dogecoin: 4.13%
2021: Bitcoin: 1.79%   | Dogecoin: 3.96%
2022: Bitcoin: 1.75%   | Dogecoin: 3.81%
2023: Bitcoin: 1.72%   | Dogecoin: 3.67%
2024: Bitcoin: 1.69%   | Dogecoin: 3.54%

To learn more about Dogecoin visit:

https://bitcointalk.org/index.php?topic=800004.0;all

https://bitcoinwisdom.com/

[celebreze32]

Didn't know they were calling the large mining operations farms now. That's a mixed metaphor. Which is it, mining or farming? 

My take is a miner is running a small setup from home and a bitcoin farm is a giant factory full to the roof with shelves of ASICs.

[ensurance982]

To a certain extent the confirmation time for a transaction (time it takes for a new block to be mined) is going to go up. Depends on the drop in hash rate how much this is going to be. This may hurt the utility of Bitcoin a bit, but this problem is going to solve itself with the next difficulty-adjustment. Apart from that the core technology will mostly remain unaffected.

[RyNinDaCleM]

Didn't know they were calling the large mining operations farms now. That's a mixed metaphor. Which is it, mining or farming? 

My take is a miner is running a small setup from home and a bitcoin farm is a giant factory full to the roof with shelves of ASICs.

Yeah but if it's mining why not call a large operation with shelves of ASICS a mine? If you have 1 person mining for copper somewhere he's a miner, but if you have hundereds of miners working a mine they don't suddenly call it a copper farm. And now you're calling it a factory, so which is it, a mine, a farm, or a factory??

This is off topic, but I'll oblige...

In the IT world, when you have a large operation of servers, it's called a server farm, so to me it seems fitting to call a large operation of mining hardware a mining farm or an ASIC farm. Not to be confused with agricultural "farming", a farm is just a big place/operation. There are solar farms too.

[hacknoid]

In other words: slower transactions will cost more to send?

he talked about bitshares with 4-6 hours adjustement ... bitcoin would simply be sold off and abandoned if it came to that because 2016 blocks adjustement is two weeks - but only two weeks at normal blocktime. Get the spin?

Network would come to a halt most likely.

My question remains:
does any sudden and harsh drop in hashrate automatically cause this scenario to happen?

Is a single serious set-back in hashrate the end of BTC? Is it really that easy to knock out? OMFG!

What happens when a large pool with let's say 30% of the network has technical problems and just goes offline and hash isn't replaced fast enough? Bitcoin dead?

Looking for some answers here

The first question to ask is why would miners drop out?  That is what causes the drop in hashrate.  Miners are profit driven so it might seem reasonable to assume that a sudden drop in price would cause a bunch of miners to suddenly quit.  But keep in mind the price has been dropping throughout 2014 and did that cause a slowdown in mining?  No - just the opposite.  The hashrate continued to climb dramatically.  Now maybe a massive, sudden price crash could shake some miners loose.  Maybe. The other thing that could cause a massive drop in hashrate would be a shutdown of one or more mining farms due to disaster.  But consider the
massive mining farm fire a few months ago - how much did that affect hash rate?

But lets consider there is a sudden drop in hashrate - say 50%.  That means until the next difficulty calculation that blocks now take, on average, twice as long to confirm - or ~20 minutes.  Far from the "hours" discussed.  In fact, a 90% drop in hashrate would be on the order required, as this would make block take on average ~100 minutes, so it could take hours to get a confirmation.  But again, is that an expected drop?

And assume 50% of miners stopped mining - what about the remaining miners?  Well, if they decided to keep mining, the drop out of other miners would have zero affect on them.  Their hashrate and the difficulty remain unchanged, so their changes of finding a block are the same.  In fact, they get much better at the next difficulty calculation, so there is all the more incentive for them to keep mining (the sooner the difficulty changes, the sooner their share increases).  So if they didn't decide to leave for other reasons, other miners leaving wouldn't make them go,

So I don't think this is a concern.  Remember though that the point in time at which this happens matters.  It takes a full 2016-block cycle for difficulty to adjust, so it would be over two cycles before things settled down.  Of course, a random event would happen, on average, about half way through a block cycle, so the impact would be lessened that much sooner.

[waaat?]

happend with altcoins before. Since KGW is around doesn't happen anymore.
But Bitcoin doesn't have that.

[Kipsy89]

Doesn't matter, we don't need a high hash rate for Bitcoin to work correctly. A lot of people assume that Bitcoin needs a high hash rate in order to process a large number of transactions. But that is just wrong. The hash rate is totally irrelevant to the inner workings of Bitcoin.

[RyNinDaCleM]

Doesn't matter, we don't need a high hash rate for Bitcoin to work correctly. A lot of people assume that Bitcoin needs a high hash rate in order to process a large number of transactions. But that is just wrong. The hash rate is totally irrelevant to the inner workings of Bitcoin.

This is true, however, a low hashrate means easy to attack. At these prices the incentive to attack is much greater than single digits so the only way for a low hashrate to work safely is to have a low price to match it.

[Kipsy89]

Doesn't matter, we don't need a high hash rate for Bitcoin to work correctly. A lot of people assume that Bitcoin needs a high hash rate in order to process a large number of transactions. But that is just wrong. The hash rate is totally irrelevant to the inner workings of Bitcoin.

This is true, however, a low hashrate means easy to attack. At these prices the incentive to attack is much greater than single digits so the only way for a low hashrate to work safely is to have a low price to match it.

Yeah, that's right... It could be easier to attack, less money is needed, yeah. But the beauty of it is that it effectively is a self-regulating system. As soon as the difficulty goes down, there's more incentive for people to turn on their (old) gear!

[grappa_barricata]

@OP

The scenario you describe can happen. Technically this can be prevented by changing the block time retargeting so that it happen either every N blocks or after time T, at the next block (whatever come first).

[waaat?]

yeah. Emergency hardfork the shitcoin like all good shitcoins do.