Topic: BTC halving and hash power (Read 617 times)

I understand and agree with you, but i was just showing a graph for presenting such requested information from Wind_FURY on how it was being negotiated before.
As you might notice that's why these graph stats end in 2017

Both of youare somewhat incorrect. BTC value has nothing to do with hashpower, an increasing difficulty and a reducing hashpower will also directly corelate to a decreasing supply for btc. making the existing btc rise in value, given other conditions are stable. once all the btc is mined, miners will only depend on tx fees instead of block rewards.
And i do not think there is room for much more innovation from the hardware size as it is pushing the physical limits of what is possible right now.

it is not a good idea to report and compare fees in BTC or any value type like that. fees should always be reported in value/size like BTC/byte because for example nowadays there are a lot of multisignature transactions which also have multiple inputs. the transaction size is huge compared to a simple single signature transaction of early years with only 1 input. so even if both paid 1 satoshi/byte fee (ie equal fee) the fee for the multisig/multi input tx would be a lot higher.

Such as this?



From https://bitcoinmagazine.com/articles/are-bitcoin-miners-making-more-money-small-blocks


I do believe that fees will eventually become higher even that hashing power decreases, because of demand becoming higher and higher and having less Bitcoins for mining.

based on some pencil on envelop maths.

if we stuck with GPU. 55exa would be 30billion graphics cards. ~approx 10mill pc's of 3gpu each. using 600w psu
thats like comparison of 5 billion S9's

however 55exa only uses ~approx 4million s9's = over 1000x efficiency in only 5 years
the hashrate has only halved once in that time. so although btc went from 25 to 12.5 the efficiency of technology has done its job by many folds more...

as for the cost/payment to pools. transaction fee's do not need to have developers mess with transaction count stiffling to push fee's
pools right now dont care about transaction fee's
3000tx@25cent=$750

pools dont like to waste seconds of time collating and choosing transactions to put into blocks for just $750 when the time wastage of doing so risks them not getting a block solved. which not only is losing them the $100k block reward but also the $750, simply because that pool wouldnt win the race.

if pools want income from fee's, shrinking the blocksize does nothing. ASICS themselves dont ''process' transactions. there is no hard drive in an asic to store/validate transactions. an asics job has nothing to do with transactions.

the pools job however is to choose the transactions(collate a block to get a header to then give a piece of data to asics). and right now and for many decades pools dont care about fees. the only reason they add transactions is for 'community care' of making sure bitcoin has a purpose so that people use it so that pools have people to sell their rewards to.

stiffling blocksize decreases users available.
stiffling blocksizes does not affect hashrate or difficulty.
stiffling blocksize hurts user adoption which hurts pools

if pools EVENTUALLY want more income from transactions, pools would prefer:
more users paying less. so theres more happy people in the community.and collectively totals more fee's
pools could also raise the min dust/min relay without needing the blocksize stifling

its like public transport buses. if a bus is empty or full the minimum bus ticket is the same. if a bus company wants more income they would:
add more seats but charge the same per seat = more income
increase the ticket without messing with decreasing seats.
they would never take seats out or incentivise people to use UBER to empty out a bus and then have people go to auction for tickets

I am guessing that sooner or later there will be more efficient mining device that will replace those in use right now. This is a must since many are also concerned on the power needed towards the bitcoin mining industry. With less cost yet bitcoin rising into the moon, mining can remain profitable for a long, long time until there is no more to be mined and that's when confirmation fees will be the only available source of revenue.

for the next 3 more reward era (up to 2032), I think appropriate increase in bitcoin price is still realistic
by then we should have better technology of hardware/software mining (cost of equipment)
also take consideration of bitcoin production cost, total network hashrate, interest of miners and etc
I believe we would see a balance of cost efficient mining farm and network hashrate which creates a stable bitcoin price

else... bitcoin devs and users will think of something and create a new consensus about mining reward and tx fee

You are correct in your appreciation, and this will in fact occur. But you have to zoom out the time frame. This process has been delayed by both technological advance (smaller asic nodes) and bitcoin price evolution, but in the long run neither will cope and mining is destined to become less and less profitable until most people leave and the hashrate goes low.

Do know that halving also presses the bitcoin price up due to slower production, but it shouldn't cause it to "double", so its not going to remain as profitable to mine as it was. This is by design, large miners who fail to see this might end losing all their money at the end (not unlike cloud mining).

As for the 51% attack, don't even bother. It may feel like a lower hashrate, but its more expensive as well. Those who remain mining still make it very expensive to try such attacks. You will see it because the hashrate is going up while the earnings will go down, even after it becomes less profitable, because of the asic becoming more efficient and cheaper.

Thing is you won't see as if standing today and simply moving one variable (hashrate down), you have to add the other variables, such as asics getting better. We are entering the asic miner is @ 50T era, from the 10T era. By the time the halving comes those 50T miners will earn like today 25T miners, but spending twice the power.

These "logical" calculations all stop becoming rational the longer Bitcoin and its aspects become more entrenched in the natural environments. I still think that anything pre 2014 should not even be considered, certainly hashpower, price of electricity and cost to mine (or should I say, secure the network?). These calculations also fail to take into account the possibility that many more miners (or network securers I like to also say) will be in it for the security aspect, rather than for profitability.

But there's just so much going on that's changing, too much to ever say X is impossible. The way Bitcoin full nodes (Assumed let's say to at least represent some mining capacity) are no longer just concentrated in N America for example.

My head tells me million-dollar BTC is not possible but hey, I didn't think 10k was possible in 2017.

The block subsidy becomes less relevant with each halving, as it slowly phases out in favour of mining fees. About 4 halvings from now (ie. in about 16 years) we're looking at a block subsidy of 0.78125 BTC which is less than the transaction fees per block during peak times. 2-3 more halvings after that and we're at a block subsidy that roughly equals current transaction fees during calm times.

Regardless of that Bitcoin's price doesn't matter all that much for network security as long as Bitcoin remains the largest coin by the fiat equivalent of block subsidy + transaction fee within its PoW scheme family (ie. as long as Bitcoin is able to sustain more SHA256 miners than alts that share its PoW).

OP, it might. But there's a fee market, which will subsidize the miners, as long as there's a demand for on-chain transactions in Bitcoin. Plus there was a graph showing that the fees account for more in block rewards per block. I will post it as soon as I find it.

It also might be more of a problem for Bitcoin Cash when it undergoes its own halving.

my whole point is that just because ETH ASICs aren't popular it doesn't mean they don't exist or are impossible to create.
as for ASIC-resistance, there is no such thing! so far every mining algorithm that i have seen have been firstly making it different from SHA256 (for example in case of ethereum it uses SHA3) so that bitcoin ASICs can't be used, and sometimes making it "difficult" to create an ASIC (like ProgPoW algorithm) while that difficulty is only in theory and untested.
besides i've always found this argument absurd that ASICs centralized mining while GPUs don't. because having a lot of money to buy equipment and build a big mining farm to own a large hashrate and having access to cheap electricity centralizes mining, ASICs are just icing on that cake. the same millions could easily go into building GPU rigs and increase the difficulty so that individuals with moderate electricity cost can no longer mine that coin.

Historically speaking that's not entirely impossible. We've gone all the way from less than $1 cents to $8k-ish now, which is 8k times. I'm not surprised if it can do the same thing again but for sure we can't rely on such prediction.

Mining needs to be profitable, so either the code changes or miners find another way to mine, like using green energy or highly efficient device.

Are you sure that we are talking about the same thing? I was referring to Bitcoin's SHA-256 ASICs and Ethereum. I think it's quite a big difference between Bitcoin's PoW and Ethereum's - referring to their algorithms - and Ethereum is moving into the other direction to be even more different (ASIC resistant by ProgPoW).

Yes, it's possible that ETH can also be mined with ASICs but it's not very popular. Right now ETH is using Ethash algorithm for their PoW and Ethash is not completely ASIC resistant (that's why it was possible for Bitmain to launch Ethash ASICs). Ethash is not ASIC-friendly, it's rather GPU-friendly. But the ETH miners voted to implement ProgPoW a few months ago which will be even more ASIC-resistant and that decision was part of many controversial discussions. I did not follow the discussions closely but AFAIK the main reason to implement ProgPoW were interests of the GPU suppliers and similar benefits for the current miners.  
I can imagine that ProgPoW will be the last change before ETH will switch to PoS.

So if you say that it's theoretically possible for ETH to change their algorithm, both could be the same but I think that won't ever happen.  


Yes, that's true. Long term the only rewards for miners will be transaction fees. Until then, it's still a long way to go but I'm sure there will be a good solution.

Doubling price is not at all realistic solution because rewards are ultimately going to become zero in next century.

By logic of doubling prices , In next 40 years ,BTC should cost more than 7 million USD per BTC. I just wish if it can be true.

there is no difference between bitcoin's PoW and Ethereum's when it comes to things like ASIC and hash power,... and i think you are confusing ASICs with bitcoin-specific-ASIC.
an ASIC is an application-specific integrated circuit, think of it as a CPU that instead of doing general work is modified to do only a specific work. for bitcoin ASICs which you are talking about, this "work" is to calculate SHA256 hashes. but it doesn't have to be, it can be anything else but you have to create a new machine. for example we have Litecoin ASICs that are designed to compute scrypt hashes. also recently Bitmain released their ethereum-specific-ASICs called Antminer E3.

so what you are calling advantage here is just ethereum being far behind in the evolutionary stages that bitcoin passed many years ago when the first ASICs for bitcoin were created.

They will receive less BTC each halving, that's true but imagine that the price needs only to double during that time (around 4 years) and that's not very unrealistic that the price will be doubled in 4 years (1BTC = 14,000$ in 2023).
Right now, the hashpower is already quite high and we are in a very comfortable situation that 51% attacs are far from being performed against BTC. Even if the hashrate wouldn't be that high an attack would be a waste of money (The hashrate of BCash is currently 25 times lower than BTC just to show that).

So I can't imagine that anyone will do this, he'll lose a ton of money. Here's a good website where the costs of an 51% attack is calculated (estimated) and there are still many costs missing like power costs per day / setting up all the miners and much more: https://gobitcoin.io/tools/cost-51-attack/ (that's only the hardware cost)

And there will always be revenues from transaction fees. Right now that's up to 10% of the block rewards: https://btc.com/stats/fee

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The main advantage of asics is that they can't be used anymore after the attack is done and they are just a worthless door stopper. Or at least their worth would be significant lower. ETH uses GPU (graphic cards) and you can still sell them later (until better ones are out), so an attacker would have a much lower loss compared to asics. This advantage is also a disadvantage for normal users because asics are almost worthless after they are outdated or broken and can't be sold anymore. Their only purpose is mining SHA-256 algorithm. Maybe thay can be recycled for precious metals. So both ETH and BTC PoW have advantages / disadvantages.
But for security reasons to protect the network against 51% attacks the BTC PoW is a better solution.

Additionally, there are few another factor :
1. Bitcoin price
2. Total transaction fees in a mined block
3. Finding weakness on PoW algorithm which allow more efficient mining


Can't say without knowing technical details how BTC and ETH mining. But one of the reason is it's more expensive to launch 51% attack on Bitcoin network.


Perhaps

Ok but why is this system better than ethereum's? is there a possibility to change it in the future if things start going grim?

     Decreasing hashrate might happen. However, miners can also invent more electricity efficient ASICs and exploit cheaper forms of electricity.