Topic: 90%+? miners can go offline right now and we would be okay? (Read 360 times)

It doesn't work like that!
Price could be dropping to 1 cent per 1 million BTC if the difficulty doesn't go down you will be still mining ~400 satoshi for each Th/s.
Price is irrelevant in this thing, I'm mining right now less bitcoins than when BTC was at 40k, on average by 10-15%.

The amount fo bitcoins miners get each day is fixed, the only thing improving your chance of getting more is other miners quitting, and this is NOT happening right now, despite a 10k price drop the difficulty will probably be adjusted in 2 days by the nearly the same amount ~-1.6 as the last adjustment up, + 1.29 % last time.
So for a miner right now, nothing has changed in BTC valued income, what has changed is the value of the revenue which has gone down by 30% while cost has stayed the same.



 

Home or small miners don't have cheap electricity and they are like speculating miners. They only can get profit in bull market but not all of them can save their profit. In bull market, they earn money (from mining) too easily and mostly will use it to trade, worse with leverage. Then they will have forced liquidations and when bear market, they have no reserve to survive, to keep mining.

In opposite, real diamond-handed miners are real investors and hodlers. So what do they say with market crash and price dips? They do say it as perfect opportunity to mine more Bitcoin with same input cost. Such miners will feel very happy if price dips lower and lower, even to $12,000 or $14,000 and they will hope the price will stay here 6 months, one year or longer.

Because same input cost but they can mine more Bitcoin. They do know price will rise again after capitulation ending.

what you find is that the most efficient miners with cheapest electric do not pay for their electric day-to-day or monthly.. they pay for it in contracts of quarterly/2-yearly, where the cost is fixed and paid for upfront.

they have to use it or they lose it. they already paid for it. so no point switching off, so they will continue mining no matter what and they dont look at the daily price changes.

they mine for a quarter or a year. and then look at the coins earned for that quarter/year and put a price on it when and only when they want to sell at the end of the quarter/year

however
home hobby miners at higher rate electric in lots of regions around the world where they cant get good deals, will switch off the moment its not practical to mine. because home hobby miners pay their bills by the week-month.
they are the ones that will switch off first. and its the home hobby miners that switch to becoming buyers. because it becomes cheaper to buy coin rather then mine it.
and without these home hobby miners competing for hashrate. the efficient asic farms with long cheap contracts get more coin per block share. and so they get to profit more

Massive miner capitulation will be a good signal of bottom but the bear market just started. We need some months to see miner capitulation but it happens a few times with past cycles of Bitcoin bull-bear market (usually 2 bullish years, 2 bearish years, roughly).

Capitulations are for all sorts of participants in Bitcoin space: miners, traders, speculators, investors. Capitulations mean Bitcoin will be exchanged from weak hands to diamond hands, weak miners to diamond miners.

Even capitulation appears, there will probably be a last crash to wash out all last weak hands or a little bit soft-hand out of the market. An example is the wash-out in March 2020.


It's started but has yet completed and even after miner capitulation, the market will need time to recover and start a new bull run. It happens with past cycles and it will do happen with this one too.

if 90% dropped off today..
where the 10% remaining were a mix of different pools and many decentralised asics.. (not colluding/conspiring)
where there is a thought of 'some security, but weak'
however..
where the 10% remaining were single centralised asic farm(or colluding/conspiring pools), they will control the network
where there is a thought of 'no security/trust, because thats 100% network hashrate/block control'

anyway the next issue:
but lets go with the first option of 10% remaining are decentralised mixed and not colluding

at this point blocks would get solved 10x slower. where it would take a couple difficulty adjustments to balance out the difficulty to then be reasonable block time speeds again (month(s))

whereby
if part of the 90% that dropped off, were a single centralised asic farm that owns more then 10% jumps back in, then that centralised asic farm could be nefarious and "empty block" or go back a block or two. mine their own chain re-org attempt and catch up and overtake the 10% decentralised group of miners, to change which transactions were confirmed to being unconfirmed.

where by its not a risk of a few minutes or hours. but a few fortnights of opportunity for a 51% attack to do empty blocks or re-org confirms to unconfirmed by a nefarious centralised/colluding pool/farm

...
emphasis
if 90% dropped today. the difficulty wont drop by 90% today to rebalance the speed today. nor would it drop by 90% in a fortnight.
the most the algo allows is a 75% difficulty drop meaning even after the first fortnight speeds are not optimum again.. so think more long the lines of a month+ for speeds to get to normal expectations
in the last 13 years bitcoin has never had a difficulty drop of more then 30%.

..
with that said. the hope would be with less competition after a drop. alot of hopefully decentralised asic miners would jump in and rebuild the hashrate to bring the speeds back to normal balance sooner. and not be colluding to cause any chain re-org or empty block, due to more chance/reward to get more coins cheap and easily.. which would return speeds to normal range sooner. but in a situation where the 90% that dropped out stayed out and the only returning farm as a nefarious pool. then expect some network drama for a month+

As a miner, I would be OK with mining more tokens (regardless of fiat value).

No, it is not. Security is so much more complicated than just how much energy it takes to mine bitcoin. Since you are only focusing on mining security not just security alone, the mining security depends on hashrate not energy consumption and how easy it is for one entity to acquire majority of it and how distributed this hashrate is.

For example if we have 50 individual miners that consume minuscule amount of energy and they do not cooperate with each other and no new miner could come online (assume the equipment is unique and scarce) that provides a lot of security.
But if we have 100k miners that are consuming all the energy in the world but 99k of them connect to a single server (a mining pool) that provides no security whatsoever because one entity has control over the majority of hashrate.

Let's assume they are not tens, let's assume one hundred thousand, let's put 2 pieces for each, and let's make those s9.
You get 100 000 x 2 x 14Th/s , 2.8 Exahash
Assuming we drop 90%, which would mean right now 21 Exahash, all those thousands of miners will be able to offset just ~1% of the drop!


Make that 2%.
I think you're not realizing how long it has been since hobby miners would represent something in the whole picture.
Mining has become a big boy's game, to offset that 90% you would need 2 million people spending 7k on a miner and run a thing that makes noise as a vacuum cleaner, heats worse than an oven, runs 24/7 and brings you 7$ a day before power.

Wars and laws don't always make sense but that's reality.

It doesn't really make sense that 90 % of miners would leave if I understand it correctly, since they will never leave at the same time so the difficulty will also go down which makes the remaining ones more profitable and therefore stop them from quitting.

Nope, we have seen it before. We have had a fairly huge drop >40% of the hashrate during the migration from China. That resulted in a huge sell-off as well. However, people were well aware the root cause of it and it was reasonable to expect them to be turned online again. The impact of it should be magnitudes bigger, given the larger percentage.

Economic-wise, it is fairly easy to imagine what will happen. 90% drop either means the hashrate is so centralized that some disaster took them out, which is bad by itself or that miners decided collectively to stop mining. Either of them will almost definitely result in a sharp drop in the price. The remaining miners which were still profiting at the current difficulty will shut down. This results in a >90% difficulty drop in all. Even if you were to take into account, by considering the total difficulty drop, you will still see a very significant crash in price. Miners are the backbone of the network and having 90% of them leave (ie. industry being worth tens of billions) is not a good look for Bitcoin.

Furthermore, because every Crypto is in essence tied to Bitcoin, the little (and potentially diminished) profits in merged mining doesn't warrant enough for anyone to really turn their miners on. So, I would believe that the protocol will survive and function but not the economy.

Massive dent? Probably not. Big dent? Tough to say.

There are probably 10s of thousands of hobby miners out there with 1 or 2 pieces of older equipment sitting in storage someplace since they are not worth selling and also not worth running. So, if something really did take out 90% of the hashrate how many people would spin then up just because? As an *extreme* case I have a little over 100TH/s sitting in a storage locker. Just not worth running it.

And until the person who is renting the locker needs me to move my crap out it's not worth striping to sell the aluminum for scrap.

At the moment I have spare space and power at one of the data centers where we have servers and routers. I could probably get 5 possibly 6 of the A841 running with the power we have after swapping some boards around to get them all to all working. 65TH/s is a tiny tiny tiny fraction of a percent in the speed today. Dropping it 90% it's still a tiny fraction. Add 1000s more people putting their units back online and yes I think there would be a difference.

This is all assuming that it's the big farms that went offline and not a world disaster that took out large chunks of the internet.

-Dave

It depends. More energy means more security if it is a simple linear growth. But if you can optimize things, and then execute more hashes per second with the same hardware, or reduce power consumption while maintaining the same hashrate, then it is beneficial to the network.

It depends, we never saw that in practice. But if miners will keep mining, then after 20 weeks the difficulty will drop four times, and then after 5 weeks it will drop again 2.5 times. That means, if miners will keep mining for 25 weeks (around 6 months), then the difficulty will adjust.

I think, even if the difficulty would drop to one, then Merged Mining that single block and doing off-chain transactions could be used as a "temporary solution", until miners will turn things on again. Because as long as SHA-256 is not broken, there is no need to change it.

Looking like the answer is actually yes.  


Or maybe Bitcoin proves to outlive catastrophic and war events..?  

But idk.. 90% miners going offline could mean many things I believe..  

I found this meme-video hilarious but also very factual to current events, notably the "WW3" part.

https://twitter.com/naiivememe/status/1537043651817512960


More like confirmation & current opinions/information.  


Like an old school backup system - just in case?  

Nope, they are unprofitable. You won't see any of those hardware getting turned on until at least the current epoch has passed, and even so it depends on when the hashrate changes and if the price maintains.

Economic-wise, you will likely see the market crash as well and for a good reason. Having 90% of the hashrate turned off means that the most important economic agent has lost trust in Bitcoin and there is no reason why any of the other market actors would be interested in this. Then it becomes a cycle, where more miners turn their ASICs off, so on so forth. You would see even larger decrease in the hashrates. Bitcoin won't survive.

All the remaining miners could just take out their old S9s, Newpacs, and Apollos to somewhat offset the loss in hashrate (as long as the difference would bring it up to somewhere below a 50% loss, right?

Obsolete gear is probably not going to put a dent in the hashrate unless its used in large formations.

When you want to as "what if" topics you should at least put some thought into it and come up with a reasonable scenario or at least try to explain why you came up with the unreasonable one. For example why would 90%+ of miners go offline?

No but PoS = shit

Theoretically, if we're left with only 10% of the network's hash rate: a "50% attack" will be a lot cheaper.
Not that 50%+ of 17,000,000 TH/s (10% of 170m TH/s) is cheaply achievable for an individual or pools when 90% of miners shutdown, it's just cheaper than it now.

So in some way, higher network hash rate yields more security.

Looks like you already expected an answer like this due to the way the title and OP is written.

There would have to be a point when small hobby miners start spinning up their old gear just in the semi hope of lottery mining.
And if fees got high enough even more people would bring out their old gear. 6.25+some small tx fees is one thing. 6.25+ MASSIVE FEES is something else.

But no matter what mining is so diverse now having more then 50% of the worlds miners go offline is not going to happen without a major disaster occurring.\
 
-Dave

For a while, everything will be not! fine.
If this 90% drop happens out of nowhere we're going to experience a 10 times reduction in block time till the difficulty adjustment somewhat fixes the problem and depending on when that happens another epoch with slower blocks, all the while fees go through the roof, people panic price goes down, fears kick in, nope, it won't be fine.
Plus, everyone will think that 90% of the miners might not be offline, but mining on a different chain, so, even if the adjustment kicks in and the block starts flowing normally there will be still the fear of an attack. So no, a sudden 90% drop right now would be the last thing we need, even behind rope and soap.


Yes and not quite, as 3 s9 burn more power than one s19 but provides less security to the network, anyhow simplifying and not going into details more reward each day allows miners to burn more energy to get more profits making the network more secure.

It depends. Lightning Network transactions in opened channels? Yes. On-chain transactions? Kind of, because things will take around 10 times longer, and then, after 2016 blocks (so after around 20 weeks, if that would be permanent), the difficulty will adjust to be 4 times easier, then again 2.5 times easier, and since then, the network will function normally.

Of course. Just download Bitcoin Core and run regtest, even offline. You will have minimal difficulty, minimal energy usage, and all Bitcoin functionality. You will mine all coins in seconds on a CPU. But it will be very insecure, and possible to overwrite instantly, if you will deploy that in such state to the real nodes.

Transactions would run fine.

So more energy use = more security?