Bitcoin Mining Cartel - page 2. | Bitcointalksearch.org

Dalkore

legendary

Activity: 1330

Merit: 1026

Mining since 2010 & Hosting since 2012

Quote from: bonker on January 01, 2013, 02:35:18 PM

Quote from: ?? on ??

Quote from: bonker on January 01, 2013, 07:51:32 AM

2) Drive the price of Bitcoin up

Why would a reduction in global network hash rate increase the exchange rate?

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

Price would actually stay the same when you restrict the supply at current levels and demand stays the same.

lassdas

legendary

Activity: 3657

Merit: 1448

Well, ok then.
But what i still don't understand is how you would accomplish that restriction.

As you know, the network handles the generation by itself, by lowering or raising the difficulty to meet the ~10minute-target, there's no way to change that by any mining-cartel, pool-owner or anyone else. It would require a protocol change and most probably lead to a fork, or IOW another currency != bitcoin.

bonker

hero member

Activity: 784

Merit: 502

Quote from: lassdas on January 01, 2013, 07:59:37 PM

Quote from: bonker on January 01, 2013, 09:11:53 AM

Lower difficulty wouldn't drive price up, but restricted bitcoin generation would, by the law of supply and demand.

And why do you think a lower difficulty would restrict bitcoin generation?
When Difficulty was around 8 when i started mining (yeah, i'm serious, it was 8!), the network created 1 block in ~10minutes,
today the difficulty is around 3million and guess what...the network still creates 1 block in ~10minutes.

The only thing that actually restricted bitcoin generation was the reward halving.

You have misunderstood. Lower difficulty would result from restricted bitcoin generation (by agreement of the cartel), not the other way around.

More importantly, prices should also rise by restricting bitcoin generation. This is the real point.

These three variable systems are quite tricky to understand.

DiCE1904

legendary

Activity: 1118

Merit: 1002

Quote from: niko on January 01, 2013, 02:11:14 PM

Quote from: bonker on January 01, 2013, 07:51:32 AM

Comrades, the current high difficulty and block chain split have heaped an unbearable burden upon the shoulders of the mining proletariat.

I propose the formation of a mining cartel of the main pools and the collectively lowering of hash rate to an agreed maximum.

This would:

1) Lower difficulty
2) Drive the price of Bitcoin up

While no one pool could be forced to restrict hash rate, transparency would expose any cheaters.

Let's go a step further, and rid of mining altogether. We could simply announce transactions here in the forum, or in densely populated areas we can just yell from balconies. Transparency would expose any cheaters.

ROFL

lassdas

legendary

Activity: 3657

Merit: 1448

Quote from: bonker on January 01, 2013, 09:11:53 AM

Lower difficulty wouldn't drive price up, but restricted bitcoin generation would, by the law of supply and demand.

And why do you think a lower difficulty would restrict bitcoin generation?
When Difficulty was around 8 when i started mining (yeah, i'm serious, it was 8!), the network created 1 block in ~10minutes,
today the difficulty is around 3million and guess what...the network still creates 1 block in ~10minutes.

The only thing that actually restricted bitcoin generation was the reward halving.

bonker

hero member

Activity: 784

Merit: 502

Quote from: crazyates on January 01, 2013, 03:26:53 PM

Quote from: bonker on January 01, 2013, 02:35:18 PM

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

You're an idiot. Plain and simple. If a portion of the network agrees to this, and decides to stop mining for 2.4 hours a day, the difficulty at the end of 2 weeks will not go down by 10%. All that will happen is the difficulty will go down 1%, and you just lost 10% of your earnings while everyone else lost 0%. Does that make it worth it? Hell no.

This idea was tossed about years ago, where they were wondering if a large farm could be more profitable by mining for 2 weeks, and then stopping for 2 weeks. If > 10% of the network shut itself off for one whole diff recalc period, and turned itself on when the difficulty went down by 10%, would the next 2 weeks be more profitable? Yes, those 2 weeks would be profitable, but it would not compensate for the 2 weeks of ZERO income. Over the 4 week period, you would lose out by 45%.

TL:DR
Trying to limit your hashrate to artificially lower the difficulty only hurts you and you're earnings, while everyone else mining 24/7 profits.

That was a rather unnecessary insult Sad

I'm quite upset.

Though I understand your arguement, the key term is *consortium*. If the big pools or perhaps the ASIC manufacturers colluded - consisting of say 90% total hashing power - then it can be very profitable for them.

It's a case of a ASIC manufacturers and a few pool heads sitting in a room and stating the obvious really.

Nachtwind

hero member

Activity: 700

Merit: 507

Quote from: bonker on January 01, 2013, 02:35:18 PM

Quote from: ?? on ??

Quote from: bonker on January 01, 2013, 07:51:32 AM

2) Drive the price of Bitcoin up

Why would a reduction in global network hash rate increase the exchange rate?

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

Unfortunately supply/demand dont work for a mostly traded currenty. Its not like a large fraction of whats traded is being mined anymore per day anyway..

crazyates

legendary

Activity: 952

Merit: 1000

Quote from: bonker on January 01, 2013, 02:35:18 PM

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

If a portion of the network agrees to this, and decides to stop mining for 2.4 hours a day, the difficulty at the end of 2 weeks will not go down by 10%. All that will happen is the difficulty will go down 1%, and you just lost 10% of your earnings while everyone else lost 0%. Does that make it worth it? Hell no.

This idea was tossed about years ago, where they were wondering if a large farm could be more profitable by mining for 2 weeks, and then stopping for 2 weeks. If > 10% of the network shut itself off for one whole diff recalc period, and turned itself on when the difficulty went down by 10%, would the next 2 weeks be more profitable? Yes, those 2 weeks would be profitable, but it would not compensate for the 2 weeks of ZERO income. Over the 4 week period, you would lose out by 45%.

TL:DR
Trying to limit your hashrate to artificially lower the difficulty only hurts you and you're earnings, while everyone else mining 24/7 profits.

bonker

hero member

Activity: 784

Merit: 502

Quote from: niko on January 01, 2013, 02:11:14 PM

Quote from: bonker on January 01, 2013, 07:51:32 AM

Comrades, the current high difficulty and block chain split have heaped an unbearable burden upon the shoulders of the mining proletariat.

I propose the formation of a mining cartel of the main pools and the collectively lowering of hash rate to an agreed maximum.

This would:

1) Lower difficulty
2) Drive the price of Bitcoin up

While no one pool could be forced to restrict hash rate, transparency would expose any cheaters.

Let's go a step further, and rid of mining altogether. We could simply announce transactions here in the forum, or in densely populated areas we can just yell from balconies. Transparency would expose any cheaters.

An excellent point well made!

bonker

hero member

Activity: 784

Merit: 502

Quote from: ?? on ??

Quote from: bonker on January 01, 2013, 07:51:32 AM

2) Drive the price of Bitcoin up

Why would a reduction in global network hash rate increase the exchange rate?

The rule of supply and demand: if we restrict supply and growth in demand remains the same, then the price will go up.

niko

hero member

Activity: 756

Merit: 501

There is more to Bitcoin than bitcoins.

Quote from: bonker on January 01, 2013, 07:51:32 AM

Comrades, the current high difficulty and block chain split have heaped an unbearable burden upon the shoulders of the mining proletariat.

I propose the formation of a mining cartel of the main pools and the collectively lowering of hash rate to an agreed maximum.

This would:

1) Lower difficulty
2) Drive the price of Bitcoin up

While no one pool could be forced to restrict hash rate, transparency would expose any cheaters.

Let's go a step further, and rid of mining altogether. We could simply announce transactions here in the forum, or in densely populated areas we can just yell from balconies. Transparency would expose any cheaters.

bonker

hero member

Activity: 784

Merit: 502

Quote from: Fiyasko on January 01, 2013, 10:48:59 AM

You want all the pools to get togeather, Become centralised, And Cap the growth of bitcoin to artificially boost the price?

Do you not understand the concept for bitcoins? Do you not realise why they were created?
Your on my ignore list because what your stating is

"lets turn the bitcoin free market into communistic currency control"

Ignore lists... what a stupid idea eh? Just bury your head in the sand.

Bitcoin is esentially still a toy and you can choose to ignore the cartel idea as a matter of principle.

But if the world were run by men of principle, then the present fiat system would be just fine.

As it stands, Bitcoin can and will be subverted by the cartel system, as far as I can tell.

Fiyasko

legendary

Activity: 1428

Merit: 1001

Okey Dokey Lokey

You want all the pools to get togeather, Become centralised, And Cap the growth of bitcoin to artificially boost the price?

Do you not understand the concept for bitcoins? Do you not realise why they were created?
Your on my ignore list because what your stating is

"lets turn the bitcoin free market into communistic currency control"

bonker

hero member

Activity: 784

Merit: 502

Quote from: lassdas on January 01, 2013, 08:27:20 AM

Not sure what blockchain split you're talking about,
but what would a lower difficulty be good for? It just makes it easier to "51%-attack" the network, which isn't a good thing.
And why would a lower difficulty drive the price of BTC up?

A high difficulty is a good thing, the higher, the better.

Reward split I meant, sorry.

Lower difficulty = more mining reward per Joule

Lower difficulty wouldn't drive price up, but restricted bitcoin generation would, by the law of supply and demand.

Just think OPEC for bitcoin. It's achievable and in the miner's best interest

lassdas

legendary

Activity: 3657

Merit: 1448

Not sure what blockchain split you're talking about,
but what would a lower difficulty be good for? It just makes it easier to "51%-attack" the network, which isn't a good thing.
And why would a lower difficulty drive the price of BTC up?

A high difficulty is a good thing, the higher, the better.

bonker

hero member

Activity: 784

Merit: 502

Comrades, the current high difficulty and block chain split have heaped an unbearable burden upon the shoulders of the mining proletariat.

I propose the formation of a mining cartel of the main pools and the collectively lowering of hash rate to an agreed maximum.

This would:

1) Lower difficulty
2) Drive the price of Bitcoin up

While no one pool could be forced to restrict hash rate, transparency would expose any cheaters.

Topic: Bitcoin Mining Cartel - page 2. (Read 3980 times)