Topic: 123 - page 2. (Read 4890 times)

The OP is pointing out that decentralization is related to returns-to-scale.

If the minting technology has increasing, but exhaustible, returns-to-scale, then it will tend towards oligopoly. This is the current status of proof-of-work.

If the minting technology has unlimited increasing returns-to-scale, then it will tend towards monopoly (full centralization). It is unclear if this will be true of proof-of-work in the long run.

Oligopoly is not that worrisome, monopoly is more concerning.

There are alternatives which, in the long-run, may not exhibit increasing returns at all (see PPC coin). If you are really worried about this issue, then take your investment elsewhere.

This is silly.

It is far from true that mining will be centralised among beverage drinkers, with only drinkers of coffee using coffee-warmers.

Some ingenious tea-drinkers will find ways to adapt coffee-warmers for the purpose of warming tea, and drinkers of hot chocolate, ovaltine, mulled hot cider and other hot beverages will be inspired to attempt adapting them to the warming of their beverages also.

Now if you are asserting that the number of drinkers of hot beverages in the world is far from sufficient to match the mining power of various NSA cyber-centres, Wall Street datacentres, massively merged mining establishments and so on and so on, I'd like to see a few numbers put on your projections.

Or do you maybe consider a coffeewarmer for every hot beverage drinker simply another free hashingbot for the botnetters?

I paid more each for a couple of second-hand 5870s than a coffee-warmer is going to cost me. So the move to ASIC seems like a move toward making it less expensive, not more expensive, for average beverage-drinkers to obtain computers and equip those computers to mine cryptocoins...

-MarkM-

EDIT: p2pool is probably worth mentioning again too.

Solo mining, is it now comparable to go in western america, find a river and search for gold with a large metal plate, trying to filter some mini gold nuggets from the sand out of that river ?  Like if we're still in the klondike era ?

I think you get the image !

I didn't read it like that at all.

An "average" CPU is about 4 times as powerful today as it was 4 years ago (2 doublings), but the difficulty is 3 million times higher.  That means an average of 30,000,000 minutes between blocks for a typical CPU, or about 14 years.  What fraction of 14 year old CPUs do you suppose are still running today?

The typical payout for CPU mining is zero, over the entire lifetime of the CPU, even though some people might get lucky.

The new ASIC-needed getblocktemplate mining protocol is intentionally designed to be decentralized, moving the block creation back from the mining pools into the individual miners.
Mining with GBT enables doing several automated security security audits of pools in realtime, and the same level of control for miners who are willing to run a local bitcoind instance.
Furthermore, ASICs are available to any consumer who wants to buy one, at more than reasonable prices as low as $150 - about as cheap as the average GPU.

On the other hand, there is currently a major problem of centralization on software for Bitcoin nodes and wallets.
This is also being dealt with, but at a slower pace. Hopefully the new Bitcoin Foundation will help move things along quicker: I imagine once Bitcoin-Qt and/or bitcoind reach 1.0, Bitcoin will be bigger and people will have more time for multiple independent implementations.

Wow. I'm really disappointed to see this misinformation still being promoted. It is completely untrue.  It's perfectly possible to solo mine and solve a block with your very first hash operation— just unlikely.   Assuming an idealized zero latency zero fee pool your expected return is the same either way.  With real pools its somewhat lower compared to a well maintained local node solo mining (although that may be something of a stretch, the reference client has some scalability / stability issues that make maintaining it harder than should be, but we're working on that).

Sequential trials of N months each isnt the right way to think about this. There are sequential trials— but they're happening billions of times a second, one for each hash operation.   A better mental model is to imagining forking off 2 million copies of the universe, a million solo mining, and a million pool mining. After any span of time the average of each of the groups would be the same (minnus pool fees and stales from latency to the pool, and differential maintenance quality in each), but the distribution would be different: in each of the pool universes you'd have a similar amount of coins, while in the solo universes some of you would have nothing, some would have the expected, some would have an enormous amount more than expected, but the over expected would match up with the under expected and the result is the expected average.

Or you you can think about it as choosing between two lotteries to play, one has a 1/1000 odds and pays out $0.98 (2% fee) for each win, and the other has a 1/1000000 odds and pays out $1000 for each win. Playing the lotteries cost the same, and you can play them thousands of times a day. Sometime in the future the relative odds will change but the payouts will stay matched. Which lottery do you prefer to play?     If not getting $.98 right away would make you die of dehydration then the pool is a clear win... otherwise it just depends on your relative risk tolerance and how you value your time. If the risk reduction and time savings doesn't justify the pools fees and hazard to bitcoin security (even if just theoretical: FUD hurts bitcoin too) for you then you should prefer to solo-mine.  (Or P2Pool!)

Difficulty changes don't make a bit of difference in this.  If you instead think about hash rate in terms of percentage of the total you can pretty much ignore the difficulty changes entirely.  

OP knows too much about Bitcoin for just 14 days of learning, I speculate it's Matthew N. Wright.

That's this chick:

https://twitter.com/Azsunyx

If Bitcoin freaks you out, perhaps you should just stick with Wells Fargo.

You miss the whole point of Bitcoin. The profitability of being a miner IS integral to the security and integrity of the network. The profit motive, and its ignorant cousin greed, were built into the protocol for a reason: to attract people who will add hashing power to the blockchain, no matter their intentions.

Even if the network is compromised/dominated, that eventuality was addressed in the original white paper:


The protocol was designed to make it so expensive to be greedy that even the greedy and shortsighted would be forced to be honest eventually. Will it work? No idea. I'm willing to take a risk on it as its a better idea than others that have been offered up.

I have never used it, but you've convinced me to try the ignore button. Let's try this. . . 

I don't think you understand variance.
Darts at a dartboard. Someone mining on a 0% fee PPS pool and someone mining solo will tend towards exactly the same reward regardless of the long-term trajectory of difficulty. The variance is huge of course but claiming that solo mining is somehow less profitable is bullshit of the highest order.

I encourage you to solo mine. Go for it! Report back with your results.


You're quite welcome.

I'm fully aware of your paranoia, yes.  Thing is, it doesn't matter how or why a pool would be compromised.  Pool users would react to the compromise itself.

The easy to use software is already installed.  Open your bitcoin.conf and put in generate=1 (or gen=1, or whatever, been a long time) and you are solo mining.

You seem to have no limit to the width of the circle of insiders that you consider to be critical to the safety of the system.  You say that a dozen pool operators could be attacked, and when I point out a way to widen the circle to hundreds, you say that 51% of them could be attacked.  Why not take it to the end and say that if everyone was solo mining, 51% of us could be attacked?

E has good reasons for not doing dust payouts, and as someone that has been keeping track of the blockchain size for a while, I thank him, for all of us.  If you, or anyone else, doesn't like his policies that he sets for his service, you can fuck off and find one more suited to your desires.

You are an abrasive prick.  Don't worry, that just means you'll fit in well here.

First, pools don't have much hashing power.  The mining is still done by regular folks.  Also, the operators of the bigger pools tend to be true believers, very interested in the continued success of the bitcoin project.  If that changes, the people using their services will switch.

Second, solo mining is like buying lottery tickets.  For most people, it gives no return on investment.

Third, p2pool.

Fourth, that dude that was having problems with solo mining setup should have been asking for help with the specific mining software that he was using, or using different software, maybe something with a more active user community that would have been willing to help him figure it out.

Fifth, did you even read Eleuthria's reply to your question about the minimum payout?

I've seen fairly little evidence that the botnets are especially big factors (especially since many of the pools will block them when discovered), though they're something of a factor.

There are a great deal of other factors though.  Mining is— once established— passive income. As long as their GPU keeps spitting out coin many people are not in a rush to mess with what works.

There also has been (and continues) to be a widespread misunderstanding of mining: a lot of people fervently believe that mining is like a race: the fastest wins almost always, and they expect a non-linear increase in returns from being in the biggest pool.

Some of the larger pools have used tools like google adwords to promote themselves in the past too— with high fees that smaller pools an decenteralized services can't collect they can afford more marketing and polishing work.

This subject is a concern— but we're much better off now than where we were a year ago.  And the concerns are somewhat overstating the risk. Miners can and do switch pools pretty quickly (e.g. automatically), and more recently developed miners like BFGminer have checks which can automatically detect some kinds of pool treachery. "no one here or anywhere else can prove me that dozens of computers contributing more than 51% of network processing power is better", doesn't of pols is not the same as "dozens of computers contributing more than 51% of network processing power"

Those damn GPU miners are making CPU mining unprofitable.  As a result only the greedy who buy devices which are so powerful (GPUs) will be able to remain in the race.  The Bitcoin project will collapse as a result.

Oh wait, ... that would have been what you are saying with that same line of thought back around December 2010.

I suspect when "halving day" and/or ASIC shipments arrives there will be a lot of anger towards "Bitcoin".  There are a lot of people that invested a lot of money, sweat and tears into their rigs and when the time comes to put GPUs down (likely in about fifty days) there will be a lot of posts from pissed off people sharing their disgust.

Bitcoin doesn't exist to distribute currency to miners.  Bitcoin exists because the alternative is a debt-based fiat that benefits the banksters and the governments that they buy.

Bitcoin is as decentralized as it needs to be, otherwise we would be talking past-tense about it.

Lol.

I was just describing how it works - I don't mine myself. It's just how it is. That's how Bitcoin is.
Not sure what answer you are looking for since what you want is not the same as Bitcoin.
Try betterCoin - I've heard they've got something better.

Solo mining is pointless because of Moore's law - if you are mining off a single GPU the rate of technological change will outstrip your ability to get the 50btc  bounty even once. You can calculate it today based on the equipment you have today at the current difficultly - it will report in the next year you may get 50btc if you are lucky (based on today's values). But during the next year the difficulty will increase and processing power will increase so it will take you 3 years and then 10 and then 50 years.  You may as well buy lottery tickets.
As a solo minor you will be forever chasing it, because of the increasing difficulty and the relative decreasing power of your hardware.

Here are a few things to keep in mind.

1. P2Pool brings together all of the advantages of pool mining and all of the advantages of solo mining except for one: it requires that each miner maintain a fully functioning bitcoind, which for many adds a great deal of complexity and resource burden.  This can, should, and will change as Bitcoin evolves to stop needing the whole block chain and relying instead on a much smaller "meta tree" (or similar construct).  Right now, a big advantage to join a pool is that you can just download a live CD or bootable USB stick and be up and running quickly.  When it changes so P2Pool can work the same way, so will the distribution of mining power.

2. In my opinion, the most likely reason that so much hash power ignores the call to avoid centralized pools is that the hash power is one or a few botnets whose operators, for whatever reason, choose to use particular pool(s) as a business decision and consider decentralization a lower priority.  Remember that botnet mining is exempt from the normal economic laws that incentivize keeping expenses less than revenues, because botnet mining always shifts the economic burden to others.  So, botnet mining will continue to thrive and grow even as normal miners give up and quit due to diminishing rewards, not to mention nagging wives unappreciative of a hot and noisy and pretty much unusable room in the home.  Meanwhile, running p2pool on a botnet is more resource intensive, which represents a real threat to the health of a botnet, and therefore clearly a business decision a botnet operator is far less likely to make.

3. Most arguments that connect "greed" with rogue mining tend to come from a belief that miners somehow stand to benefit from taking over the network, as evidenced by seasonal rants by newbies who come and point out we overlooked the "fact" that all a few bad guys have to do is conspire to take over the network and then get rich off of stealing coins or from counterfeit bitcoins.  If you're actually aware that's not how it works, you should explicitly acknowledge that if you want your argument to be taken seriously.