- snip -
That contains The answer of Danny. I think one can NOT calculate it this way
- snip -
You are mistaken. If you are going to pay someone to give you control of their hash power, that is exactly how to calculate it.
- snip -
this number is much to low. This is because after a miner invests in mining equipment the assumption is this: he can not use it for anything than mining, so he can leave that costblock out of the equation and he will continue as long the mined bitcoins are worth more than the electricity he needs to create them. You can believe me on this one. In economics this is called sunk cost and the problem of average cost (which do not apply here) and marginal cost (here you say the money for the hardware is already lost fuck it, i keep mining as long 1BTC is worth more than the electricity needed to create one).
- snip -
You are mistaken. If a miner can get "more than the electricity he needs to create them" by mining with his hash power, and he can get slightly more than that by renting out his hash power, then the profitable thing to do is to rent out the hash power. Therefore, (since you want to ignore the effect that the increase on demand will have) the attacker should be able to rent the hash power for approximately the same amount as the revenue that is generated.
I can prove this statement, and will do so later in this response.
- snip -
I was just throwing in AWS is there maybe a service for renting ASICs.
There are many "cloudmining" services. In my opinion, the vast majority of them are ponzi schemes. The few that are not ponzi schemes are probably scams.
Are asics used for something else than bitcoin mining?
ASIC stands for "
Application Specific Integrated
Circuit". It is a circuit that is custom designed for a specific application. In the case of bitcoin mining, that specific application is performing the exact proof-of-work that bitcoin requires. The only other thing that it would be useful for would be other systems that use the exact same proof-of-work that bitcoin uses. There are a handful of altcoins that use the same proof-of-work, but that's about it.
For the purpose of this answer just assume:
- It does NOT matter that price will rise - please TOTALLY ignore this
Fine. I think it is a silly thing to ignore, because the number you get will be ludicrously low, but if that's what you want then that's what we'll do.
- you buy/rent your hardware outside the network
This doesn't really exist. All bitcoin mining equipment that exists is available to be used on the network. I assume you are suggesting buying newly manufactured equipment that hasn't
yet been used to mine bitcoins until the attacker starts using it. That equipment currently gets bought and connected to the network about as fast as it becomes available, but for your imaginary world we'll go ahead and pretend that an infinite amount of new hardware is available to be rented at whatever the current rent cost would be.
- Absolutely no further speculation/estimation on how the network would respond, what core devs would do or not do or whatever, just a calculation
So, an imaginary number that is entirely meaningless. Got it. In that case, the number would be very close to the estimate that I provided earlier: "
about $837375 per day"
Now that we got that out of the way, lets look at how I can prove that "the attacker should be able to rent the hash power for approximately the same amount as the revenue that is generated", which means that a minor 51% attack could occur at almost no cost at all (since the revenue generated would offset the costs involved).
If you think about it a bit, you'll realize that
every miner that is not solo mining is effectively renting their hash power to the pool operator. The miner has no control over what is being done with his hash power. He simply receives a proof-of-work request from the pool operator, and then reports back to the pool operator if/when he completes that proof-of-work. In return, the pool operator pays the miner for the use of the equipment while it was attempting to complete the proof-of-work.
How much does the pool operator pay for all that hash power that he is "renting"? Interestingly, he is paying with the bitcoins that he is mining, and generally is not needing to toss in any more of his own money beyond that. Clearly, the cost that he is paying per hash is "approximately the same amount as the revenue that is generated".
If someone wanted to acquire control of 51% (or more) of the hash power, all they would need to do is set up some pools that pay out a little bit more than any other pool. Miners will switch their hashing over to the attacker's new pools since they'll get a better profit. The cost to the attacker will be only slightly more than the revenue generated (since no "honest" pools will be able to pay more than they are generating). As long as the attacker is careful about what they do with their 51%, the miners won't have any reason to switch to any other pool. Among other things, this will allow the attacker to occasionally orphan blocks from competing pools, and will allow them to occasionally create a double spend transaction.
Ah, but you might say "When/if the miners see what the pool is doing, they can/will switch to some other pool that pays them a bit less, but which is not attacking the network". But remember you said you wanted to include "Absolutely no further speculation/estimation on how the network would respond". Furthermore, if you are willing to make an allowance for the possibility that "miners could switch pools", then to be intellectually honest, you need to make an allowance that the services "renting hashpower to the attacker" can stop renting to him if they see what he is doing with that hash power.
