Topic: Bitcoin mining pointless? - page 2. (Read 16026 times)

The 50% figure is correct for certain types of attack, particularly ones involving modifying the block chain.

There are other attacks which do not rely on controlling a large portion of the network. The Finney Attack can be carried out by a single user. The basic attack is:
- have some Bitcoins on hand.
- Create a transaction to send those Bitcoins to yourself, but don't publish the transaction
- Start mining, with the above transaction in the block.
- When you find the solution, then immediately create a NEW transaction, sending the same Bitcoins to some unsuspecting victim, who acknowledges payment and sends you whatever it was you paid for
- Publish your block

If your timing is right, you have just successfully double-spent your coins. The only known defense against that attack is to keep the difficulty of creating a block containing arbitrary data as high as possible, requiring the attacker to expend a lot of effort and time. In order to make the attack worthwhile, the attacker will select high-value payments, which (presumably) the recipients will check more carefully before acknowledging.

I doubt we'll even get to 1 million miners. As the system matures the goal is to have the majority of users running a "light" client, which does not mine. In fact, right now the option to turn on mining is being removed from the default client - there's no point to mining unless you have a GPU setup. The gold rush has peaked - at this point, only established miners and really determined newcomers will likely set up shop and continue mining.

Ah, yes - that's another consideration. You're probably right.

Then you still have not grasped the fundamentals of Bitcoin. The puzzle has actual dollar value. Solving a puzzle will earn you 50 Bitcoins, which according to Mt. Gox you can redeem right now for about $80. That hardly seems "no consequence" to me!

I will not succumb to your reductio ad absurdium argument, but rather I will point out that, when you are designing a system, you tend to focus on just the system and the immediate problem. Yes, the design choices are arbitrary, but the job of the designer is, by definition, to make arbitrary choices. Satoshi was designing a digital currency system - why on earth would he include something totally unrelated to digital currency?

Well, I'm going to go out on a limb here and potentially alienate myself from a lot of the people who've been around longer than I have, but there seems to be almost a reverence for "the way Satoshi set it up." It seems that Satoshi and an anointed few have the master plan for details of the road map, and any deviation from that is frowned upon.

Now, putting aside my cynicism, I've already outlined a potential argument against different proofs of work, namely that you need a problem that can be easily verified and cannot be cheated. I don't know if those problems can be easily verified. The amount of work required to modify the system to allow different types of proofs of work is probably far more than the benefits Bitcoiners would derive, especially for something that's considered a "nice to have."

Some more potential arguments:
What if someone doesn't agree with the project that's chosen as the beneficiary of the work? Can we find a project that everyone can agree on? What if we don't? Do we deny someone access to Bitcoin because they don't agree with the beneficiary? That doesn't seem right to me. Your same reductio ad absurdium argument can be inserted here with little modification.

Bitcoin is open source, and anyone can review the software. At the moment, it requires a basic understanding of cryptography to verify that the code does what it claims to do. If you add in protein folding, then in order to understand and verify that the proof of work cannot be cheated, then you now need to become familiar with protein folding. If it gets changed to finding more values of pi, then you have to become familiar with how to calculate pi. The more problem domains you add, the more complex the system becomes, and the easier it will be for someone to exploit a weakness and cheat.

I think that's the most compelling argument: it adds unnecessary complexity. As an expert on cryptography, and by inference an expert on security (the two are not the same), you know that complexity is the antithesis of security. The existing system is simple, it works, and is secure. Yes, it would be nice if it did something that also had a useful side benefit, but I will take simple and secure over complex and unknown any day.

For what it is worth, this declaration is worth nothing in a discussion where credentials cannot be verified, and as such, any contributor that is genuinly concerned about the questions discussed in a thread would never resort to that kind of sterile attempt. Then again, reading you all over this thread showed but one thing:

You reveal no understanding of cryptographics or coding in general. Else, you could at least provide one strong example of what a positive externality resulting from hashing cryptographic problem is?


What are positive externalities but a beneficial byproduct? What possible beneficial byproduct could result from the use of a piece of software but to reuse part of the data it has processed? Go ahead and name a single piece of software which resulting data can be used for a different, beneficial process than the one it is intended for. None comes to my mind. If your concept of "positive externalities" encompasses the recuperation and reuse of the power dissipated by the hardware, then your question isn't limited to the "design of the network", is it? If you are taking in account the power the consumption, then the problem extends to power efficiency, in which case you need to be more rigorous. Or wait, next you're gonna tell me this isn't about mining anymore, right?


If I had not understood this question, why would I have bothered explaining every step that results in the existence of mining is necessary for this system to be sound? My point, that you obviously missed, is that the design so far works, and that there are no superficial elements in this design. And on this regard, you provide me with another proof that you have no idea what you are talking about:


No choices in this process is arbitrary. Your pretense that developer choices are somehow arbitrary shows that you think Bitcoin is just a crapshoot. Your pretended expertize level in economics would indicate that you know the conditions needed for a commodity to be a sound currency. Your expertize in cryptography implies you know the list of steps necessary to secure a decentralized, p2p network that is continuously producing fresh data from within while blocking outside injections.

If you had those pretended skills you would know that there a predefined set of NECESSARY steps in order for such network to function, and the only remotely arbitrary development decision made would be in regards of the seeding constants and hashing algorithm. And even those are established with efficiency in mind. In what world can a voluntary, open source, p2p project afford to randomly choose its mechanics and expect to be adopted?

Once again, your point about the hardware favoring speaks volume about your understanding of Bitcoins. These kind of externalities are absurd. There is a unique nature to the calculation that has to be processed, that's the whole point of cryptography. You can't just go around changing it without hurting its ability to secure your data, nor can you choose something weaker. But hell, you're an expert in cryptography, you should know that shouldn't you?

Your pretense that externalities resulting from the very fabric of the Bitcoin system should be weighted in the design of said system shows that you think the problematic and conditions the Bitcoin project is trying to address are indeed loose and replaceable at a whim. Again, if you were truly an expert cryptographer and economist, you would know better, or you would present us with the better alternative.


If you are discussing design, you are discussing form. Why can't you wrap your mind around the fact that the different parts of Bitcoin form a whole and that changing one would require to compensate with another part or add a whole new concept to it unless one of the foundation of the system is to be compromised, which isn't an option.


You made no such valid points. A bunch of 'ifs' thrown in by someone uneducated to the matter do not consist in a valid point. I could just as well walk to a car manufacturer and ask him why he isn't building antigrav vehicules in order to save friction wastes and tires. He'd have the same reaction as I am having with you. Do you really think that if such encryption algorithm that emphasis general computing unit architecture (cpu) against parallel, raw power processing power processors (gpu), that the developers of Bitcoin would have made a point of choosing the GPU one for the single purpose of limiting access to a P2P open source project?


Your economic point is the result of your ignorance. What do you expect me to do, praise you for it?


Says the troll... Also a jingoist provides no rationale to his rejection. I gave you a proper counter argument. l2troll.

Sounds like you think you've got a better way of doing this ... let's put some of those "supra-optimal, supervenient, potential positive externalities" into practice.

Write your better software, put it up on git-hub and get some skin in the game, stop pontificating about it, just do it.

We'll take it from there and let the free market decide who knows what they are talking about.

My money's on satoshi for now.

Ima simplify this thing so you understand the point once for all:

Is mining required? Yes (see proof of work/proof of time). After all this is a virtual currency, you need some sort of validation process, hence cryptography, which leads to hashing to verify it.

Is the difficulty increase required? Yes. Simple increase in network hashrate doesn't mean better security. If a cpu can validate a block in a few seconds at 800 gh/s, then it can inject a falsified a block that easily as well, resulting in double spending and forks from all over the network. If anything, this would be a waste of computational resources.

Is the security required? Do I even need to answer this one?

Is the fixed amount of blocks per hour needed? Yes. It makes more sense to secure the system by verifying one big block every 10 minutes than a small block every seconds. As a matter of fact, that's also a measure to save resources. It is beyond me that you could think bandwidth and computational efficiency were not considered in the building of a p2p network... Hell, under your logic, why would people have bothered researching gpu mining, if they're making a point of "wasting energy" to mine, as you portray it.

Can there be positive externalities coming from hashing? rofl... Have you ever coded, have you ever looked at a cryptographic problem? Actually you don't need to, a little common sense will suffice. What other kind of use would you put the data resulting from the process of validating a unique cryptographic problem? Gimme a break... The energy used for hashing is a requirement, period. The difficulty is not optional, the security it engenders either.

Now if you so wish, you can research fpga/asic hashing, smaller die process, supra conductors, better mining software, or hell, a way to recover the heat dissipated by the video cards. But your insistence in reusing the data processed for the hashes for some other benefit just indicates that you don't know what you are talking about.


This response is directly related to the argument ("is mining pointless"), and you even explain why yourself. Proofing the network is a necessity, that it takes resources is a fact. That the Bitcoins need to be distributed in some sensible fashion is beyond the any need for explanation, hence mining is necessary. It allows the network to exist, it secures it and provides a proper way of disseminating the Bitcoins in the network. Try to take one of these elements away and you hurt that balance, in which case I'll simply quote you:

yes, you're right,
theoretically it could be something more productive

There is no limit to the useful level of security in the network. As people join the network, the wealth it represents increases, so it is more prone to attacks. There is about 9 millions dollars worth of Bitcoins in circulation, about 5~10k BTC sent per hours, and 700~800 gh/s to maintain it, which means you can expect the network to be safe under these conditions considering how much money has to be spent to achieve half of that power to double spend a few grands. Now assume the network doesn't increase in size but the representative wealth is now $100,000,000 and you have a problem.

You also need to take in account that the network hashrate is directly related to the price of the BTC, as the higher the price goes, the more profit there is to make out of mining. The distribution of BTC is also a critical point. You can't just magically bestow 21 millions Bitcoins to one guy and expect people to be willing to buy them off of him. It has to be distributed under a controlled inflation system. The publicized rate of inflation ensures adopters can safely invest in the currency. And what better way to distribute the BTC but to reward the people that are spending resources to ensure the security and validity of the network?

Thanks, this is exactly what I mean!

In my opinion bitcoin has more potential to improve society than the rest of the distributed computing programs combined.

Miners profit from Satoshi's creation. I'm sure this was intended. There are enough people that place value on bitcoins to make mining profitable. Let's not fool ourselves, how powerful would the network be if everyone was working at a loss?

If someone designs a way to make more profit with the energy these miners are using, I'm certain that most would switch. Mining is extremely competitive, and my guess is that it will continue to become more competitive as bitcoin grows. Miners are not philanthropists, they are businessmen. Profit motivates.

I am simply amazed at Satoshi's work. It seems odd that someone combines the talents required to create bitcoin. Knowledge of many different fields are involved. And so far, it's working.

So again, find a more profitable use of the energy, and people will come on their own. As with bitcoin, they won't even need to understand it completely, because they will understand their bottom line.

The total energy consumed by the miners on the bitcoin network is probably less than two large semi-trucks (~350 kWatt) ... is it really such a huge burden on the environment considering the millions of trucks on the roads carting useless crap around for wasteful govt. projects?

Go pick on someone who's really fucking things up.

EDIT: Let's just say that I'm not losing any sleep over the bitcoin network wasting energy ...

Energy used for mining is not necessarily wasted - I live in a cold country and my mining computer produces heat for my home using energy that would otherwise be spent on electric heating.

You could say that electric heating is actually the wasteful thing since that electricity could be being used to secure the Bitcoin network

Surely after a while security of the network stops becoming an influencing factor. There reaches a threshold where you can clearly say 'the system is secure'. From what I can gather this is at some point where 50% or more of the computational power of the network is not within the control of a single user? I don't know where this point is, I'm sure this figure is completely wrong, but equally I'm sure the point was passed ages ago when bitcoin was in its infancy, when security was still a legitimate concern.

By this I mean, the security of the system increases as more and more user mine bitcoin but the advantage to security of having 100 million unique miners is, in truth, of no real difference to having just 1 million.

There is a point where improving security is pointless. After this point the energy expended by the surplus bit miners can be considered to be wasted if the function of mining is to check and secure the bitcoin network.

If more a more people became interested in bitcoin mining then the wasted energy will increase exponentially, especially if as I understand it, the difficulty of mining those bitcoins increases as the number of bitcoins tends to 21 million.

I'm not sure that protein folding can be dynamically varied in difficulty but I believe that it is possible to estimate how long it will take to complete the task to some degree of accuracy. Folding@home works by distributing work units to clients who then return the units to the server along with a digital signature. I'm guessing this doesn't work for something decentralised like bitcoin.

I don't claim to have a solution of how this surplus processing power could be better utilised, but at the moment it seems a tiny bit crazy that all those processor cycles are doing nothing more than solving puzzles of no consequence. The only purpose these processors serve is to actuate the bitcoin system. Something that could be done using far less energy as security, after a point, is not a concern.

That is what I mean about inefficiency as being a self-imposed feature of the way bitcoin is designed.

I'd gathered that would be the case. It's a little off-topic but only having a basic understanding of hashing and cryptography it's something I've wondered a while, given the low cost of modern storage and Internet bandwidth why are the increases in bit length over time somewhat incremental and not something huge like 8192 bits / 1K?

I can understand for high-traffic things like SSL and things that need hardware acceleration, but for applications like signing a single document, encrypting small but important documents and generating things like bitcoins where the difficulty is being manipulated to make it harder as time goes on I never really understood why it wouldn't be done?

Just so no one freaks out. Encryption systems don't break all at once and we can move to a different one when needed.

I think the fundamental reason for the wasteful computations is the 10 minute bound. It has turned out that the difficulty of the sha256 problem can be varied easily. What other computations that do not involve a third party (like Folding@Home) exist in which the time to solve the problem is predictably related to some integer?

Even if you would use Folding@Home or world community grid. What would happen if Folding@Home stopped existing? If you want to change the problem, you would need to have a way to vote in a distributed way over another computation to be performed with some piece of code for the verification of the work performed. This is in principle possible, but how are you going to get an agreement on which particular piece of code? I think all of these have solutions, but they require work, where bitcoin as it is now is pretty solid (until someone breaks sha256 (which will surely happen before the last million coins is generated)).

Although running calculations for bitcoin has a lot higher percentage of returning something useful than SETI. You can get coins that can be used to purchase goods and services and converted to real world currency.

if it is pointless to you, then you don't need to participate.
Some people also think SETI is pointless, so they choose not to participate.

Basically, a very simplified way of looking at it is that you have to find a particular value of n such that f ( n ) returns a desired value (you nit-pickers in the back row keep quiet! I said this is simplified). The function f is designed in such a way that changing the value of n even the tiniest bit gives a completely unpredictable result; f( 1 ) might give 33929494, and f( 2 ) might give 4. So the only way to find the value of n that solves the problem is by brute force: try each possible value of n until you find one that works. The value of n that solves the problem is called the proof of work.

The function f and the value n have an important use in Bitcoin, so the solution is not just some pretty value that gets put on the fridge for a few days then quietly gets buried in the recycling bin.

Your idea of using 'useful' calculations to maintain the rate is interesting, but I'm not that it can be worked in. The problem has to fulfill two criteria. First, it has to be something that can be dynamically adjusted to compensate for more and more computers coming online to solve it. Second, the problem must be difficult to solve but easy to verify the solution, because every client will verify the solution at least once, if not several times. And, let's face it - we're dealing with money. A lot of people will be very motivated to claim they found a solution, so we must be able to check their claim quickly and easily.

'Useful' calculations could probably meet the first criterion by varying the number of folds, or the number of digits to solve, and so on.

With the current setup, finding the solution is very hard, but checking whether the solution is correct is, comparatively speaking, trivial. If someone says "Hey, the answer is 542214675," you don't have to try all the values from 1 through 542214674 - all you have to do is plug 542214675 into f and verify that the result meets the requirements. I'm not sure the same thing can be said about folding proteins, extending a transcendental number, and so on - I suspect you would have to duplicate the entire work effort to verify its legitimacy.

difficulty is NOT raising to keep the network going,
difficulty is raising, because more and more people start mining.

it's NOT necessary to issue more coins,
it happens, because more and more people want to GET those coins.

the system would also work if only 1 computer would generate all coins/blocks,
but it would be a weak system, that could easily be shut down, or attacked.

to make it strong and secure, it's a good thing to have thousands and millions of computers running, instead of just 1,
so it's a good thing that difficulty is raising, because it makes it harder and harder for the fiend.
 

There is no such a wastage at all. Bitcoin relies on cryptography.
You need a computational powerful network to be inmune to attacks.
And computation power = energy consumption
Simple as that.