Topic: Low (networkhashrate / marketshare) is dangerous ? (Read 513 times)

Let's take marketcap

that is

(all coins in circulation) * (current coinprice)

right?

I'm not sure what you mean by marketshare.  Do you mean hashrate compared to all the capable hasrate on earth?

The yes, a low-ish hashrate is not fantastic because https://bitcointalksearch.org/topic/delete-546338

If you want to make plots, let's clearly define marketshare.  What exactly do you mean?

I used an over-simplification (in a text about the recent/ongoing battles over altcoins), and I would appreciate your experts' opinion on it:



Or if you wish
Low (networkhashrate / marketshare) is dangerous.
which is more or less the same statement, right?


Is there is a way to determine how healthy and secure a (PoW-)altcoin is, by e.g. looking at hashrate and marketshare? For this question, it makes sense to ask about bitcoin, because it's the older project, longer data, and a tighter market, the same (or very similiar) code - and the more experienced devs. That's you   please help me to understand.


The hope would be that the linear or even sublinear relation is not true, so e.g. it's not:

Low (sqrt(networkhashrate) / marketshare) is dangerous.
or
Low (log(networkhashrate) / marketshare) is dangerous.


When you are using your deep knowledge of the PoW-protocol, and known attack vectors, and 5 years of experience with the mining industry, and fantasies about the future of cryptocurrencies ... what would describe the situation best, in your opinion?


From the view of conservation of electricity and rare metals, I hope that it's superlinear, something like

Low ( networkhashrate^a / marketshare) is dangerous.  with a>1 , preferably a >> 1
or even
Low ( b^networkhashrate / marketshare) is dangerous.  with b>1

So that for example, a tenfold networkhashrate can accomodate for more than a tenfold total value secured in the network.


We have seen a crazy growth of bitcoin hashrate, and thus bitcoin difficulty.
And (the moving average of) the price exploding exponentially over years.

For bitcoin, I would like someone who has both the 4-5 years data of price or marketshare and hashrate or difficulty, to plot the above relations. What was the empirical exponent a in the past?  (Perhaps after smoothing out local details, with a large moving average window; and not focussing too much on the last few days' drop in price, that will recover soon ). I am really looking forward to seeing those diagrams, and an empirical estimate for that exponent.


For the theoretical approach (and a more precise over-simplification ) please help, I haven't got my head around factoring in Moore's Law. It says that a four times hashrate costs only a double investment now, compared to ~18 months ago (or less months because this industry is in such a hot phase). Actually that's another diagram which would be interesting to see:   log (hashrate per dollar) /  (time - offset)

With Moore's Law counted in, any currently accumulated hashpower never suffices to secure any future network, almost independent of the marketshare - this seems to need to be an ongoing limitless exponential growth.

So
Low  d/dt (networkhashrate) is dangerous.  

PoW coins always need to have an ever-growing network of miners. Faster than Moore's Law if the marketshare is growing?

What is the necessary growth factor, factoring in Moore's Law AND marketshare-growth?

Please help me understand this. Thanks.


Fred_Om, 3.4.2014