Topic: Are miners leeches? (Read 236 times)

Yes, it will, since that's not how the difficulty adjustment works.

If you experience a drop of 90% in hashrate but only on the last 5-10 blocks the difficulty for the next week will still be nearly on the same value as the average for of the last 2016 blocks will be nearly the same, so you will still have the next two weeks period to deal with it till it adjusts 90% down. Same if the difficulty will drop in the middle of the period, you will only have 7 days of blocks being 10 times slower but also another two weeks of them being 5 times slower since the next period difficulty will be half of the original but still 5 times higher than how it should have been considering the last 7 days.


The hash rate doesn't affect the number of transactions being made and that is the only thing driving up fees.

If it happen that all the big mining farm evacuate tomorrow, it will affect the price of Bitcoin market but it will give chance for solo miners who find it difficult to mine profitable these days and as you presumed everything will be back to normal later though.
Meanwhile, tx fee and BTC price will be determine by the mining difficulty.

But you are not considering their most important contribution to the network which is to secure it, even if every single transaction was confirmed by a single old computer and everything may seem like the same to you the security of the network will be heavily compromised, which means that almost anyone could attack it and begin to reverse transactions left and right, so you are incorrect, miners are not leeches and without them bitcoin would not be as secure or as valuable as it is now.

This shows a complete misunderstanding of BTC and what it is and why POW = good and pos = piece of shit.

No. This is not why Bitcoin won't change its mechanism. It's simply, because none of the people will adopt the change. You shouldn't forget that the whales would then validate the majority of the transactions, as a result to gain most of the rewarded coins.

If Elon Musk rewrote Bitcoin to be PoS, he'd surely manipulate the market to make the new market entrants believe that his “Bitcoin” is the real Bitcoin, or promote it as an efficient version of Bitcoin. But that couldn't stand in the long-term, because it'd be competing with Bitcoin, which is broadly accepted by everyone. It turns out that you can't attack to Bitcoin with your wealth, you can only manipulate the crowd short-termly.

This thread is oddly absent the key value of the huge mining network and that is bitcoin's ledger (blockchain) security and finality. That is what the huge mining hashrate gives you. Any sort of attack that tries to rewrite the blockchain has to contend with a mining network larger than any computing network on earth so its nearly impossible to attack. If half the miners disappeared tomorrow, yes the difficulty would adjust in a few weeks to become less difficult to find blocks and block time would get adjusted back to 10 minutes.

And then that day, the network would be half as hard to attack and take over the proverbial 51% and attack the ledger.

Seems to me bitcoin has clearly evolved to a long term store of value as the most important use case currently. That use case requires super high security that the blockchain and money supply stays safe and the giant and growing mining hashrate is the best thing to ensure that.

This is absolutely correct, the time of finding the block is fixed, whether there is one mining machine or a million timer is the same, the difficulty of mining changes according to the number of miners so in practice the more devices working on the network will increase the difficulty of mining and vice versa, the lower the number of mining devices will decrease The difficulty.
In theory, this means that if a large number of mining devices are out on the network, the network will return to the early days, where the mining was done by regular computers because the difficulty of mining will be reduced to a minimum, and in this genius way the network is maintained permanently.

You can. GPU farms are pretty big and CPUs are pretty small. It wouldn't be hard to customize them and upsize it to become a whole farm. It all depends on the motivations behind it but it is definitely possible and would be done without ASICs anyways.

So if we're CPU mining or even GPU mining, they're profitable. You cannot blacklist or exclude anyone from the network; the nature of Bitcoin makes it extremely hard to single out miners actually. The reason why we know who mined the blocks is because mining pools put identifiable information within their mining pool.

Sorry, I missed this:
Partly that yeah. Of course, Bitcoin shouldn't come under the influence of any third party as it simply doesn't make sense to conform to his ideas. Shifting Bitcoin's algorithm would spawn an altcoin instead. It won't be considered Bitcoin.
Proportionally... It depends on how much hashing power you have. You'll probably earn a miniscule amount with a single ASIC and might not even be profitable depending on your electrical rates. Pool is a concept whereby people mine together and split the rewards. Big pools and smaller pools are all the same.

Botnets aside, we only have large mining farms as we can have lots of small ASICS in the same place.  It wouldn't work with whole PCs.  How do botnets get their work into the system?  Are they their own pools?  Do they just feed into legitimate pools?  Can't we blacklist them somehow?

So, couple of questions.

• Btc will never go POS because too many companies have too much money invested in being POW.  So even if elon Musk rewrote Btc to be POS tomorrow, no one else would go for it. 
  
• How is the proportion of btc earned split between miners in pools and the huge btc farms?  I was in a pool for a while in the early days and made some money but that soon stopped?  What gear would a person in a pool need to earn anything these days?  Are the main pools just groups of small pools?

Excuse me, let me correct it:
If 90% of the computational power was stopped being offered to the Bitcoin network, then it depends on the block that it'll happen. It'll surely slow down the process independently of the block, but if it happens 5-10 blocks before the next adjustment, the damage won't be that big. Each of these blocks timestamp would differ around 200 minutes. But if there are thousands of blocks until the next adjustment, there's trouble for sure.

I understand your thought, but you should know that mining difficulty requires a certain number of blocks to be produced (2016 blocks). If lets say 90% of miners decide to quit for some uknown reason, the difficulty will not change instantly. If the miners in this case leave early, right after the difficulty adjusts, then blocks will take hours or even days. I don't know the calculations exactly, but probably a hard fork will be required to change difficulty to very lower levels that will be able to sustain the network.

If you disconnected all miners today, Bitcoin would halt, because the difficulty would be so high, that it would take months or years to mine even one block with CPU's and GPU's. A hard fork to reset difficulty would be required, and it would be a very messy process.

Miners are not useless and they are not wasting resources, the amount of Proof of Work determines how expensive it is to attack Bitcoin. If it was easy to do so, banks or governments would have killed Bitcoin a long time ago.

They might be, "who knows?"
But we can all agree that they are actually essential right now. All these big firms acta as a buffer system. When there is any probelms in countries like China where people are snatched by the government of their mining farms. The hashtag suddenly decreases. These companies are actually essential during this time. They not only helps to maintain the state but can also take on big hits.
Well for sure in the future mining can be fully controlled by such softwares but at the end of the day we will need a lot of them and that will need funding and whosoevers gonna fund they will be the new big leeches.

we already had a "big" chunk of hashrate disappear from the network for a while not so long ago when there were big scale power outages in certain places in China.
all it did was slightly decrease the number of blocks found in a day. there was a panic where people made a lot of transactions during that time which made everything worse but essentially nothing bad happened.

the reason is because bitcoin thrives on decentralization. that includes miners. even biggest mining farms don't have enough hashrate to do any serious harm. the mining power is and will be more distributed every year making disappearance of on "farm" ineffective.

Probably a price crash due to the ease of carrying out an attack on the network, given that they constitutes such a huge proportion of the network, it would definitely have a lot of repercussions. The security of the network functions on the fact that it costs more to attack the network than what you stand to gain from it. If all of the big farms were to disappear, an attacker has to outpace the rest of the network, which is far easier than outpacing the bigger farms that disappeared.


No. ASICs made Bitcoin more secure (and less in a way). Before ASICs, CPU and GPUs dominated the mining scene and if were to still be the case today, there would be large botnets profiting off Bitcoin mining as everyone has either a CPU or a GPU but most won't have an ASIC. The difficulty is in essence a measure of how difficult it is to mine a block or to attack Bitcoin by re-organizing the chain. Proof of work works best if it is significantly more difficult and expensive to attack the network than the potential profits.

Unfortunately, One CPU One Vote was never possible. You would have people running giant CPU or GPU farms sooner or later and that is akin to running an ASIC farm as well. Individual miners would probably not profit from that either ways.

Fees are not always dependent on any of the parties that you've mentioned. It is determined by the fee market where (or rather assuming) miners prioritize those with a higher fee and it is limited by the number/size of transactions that the miner can include. Whether we're CPU mining or ASIC mining will not make a difference to the fee market, it is purely limited by the capacity.

Except that it never was (emphasis added by me):

Yes. That was actually the vision what happened at first. People who will help to extend the chain and outpace any attackers with their CPUs. Couple of years later, we had GPUs and even stronger machines like ASICs. In a way, Bitcoin on its early years had better hash rate distribution, which means that it had better decentralization.

I don't get how people equate Bitcoin with the internet. They aren't the same. Not all people have the same rights upon internet, in contract with Bitcoin.

That's a great question.

Well, you have to understand that nowadays the thing differs. Back in 2010, I'd guess that the number of working CPUs wasn't even a 4-digit. That being said, if you get rid of the pools, the miners will have to solo-mine, but only one person would gain the bitcoins. Right now, if you provide your computational power on a pool, you'll be rewarded whether you find a valid hash or not. If you go solo, your chances to be rewarded are tiny and thus, you won't mine, because it won't bring you profit.

On the other hand, gathering all that power in one entity can lead on mining centralization. I guess that's the “leeching” you're referring.

Just imagine that tomorrow all the big mining farms disappeared.  What effect would that have on btc?  After the difficulty had settled, absolutely none.  Correct me if im wrong but if there was a handful of compuers running the mining software then life would all carry on as normal.  btc is like the internet, you take a big chunk out and it carries on as normal.  One transaction would be verified every 10 min whether it was 100 miners or 100,000 miners.

Are bitmain, antminer and all the big mining firms and pools leeches on the system?

• As they are so big, the difficulty is higher and it takes more power to mine.
  
• All the power is concentrated in a few players.  Individual miners don't stand a chance.
• Chances are fees would be cheaper as well.