Topic: My rebuttal to the fairness of proof-of-work launch (Monero's holier than thou) (Read 2266 times)

Once and for all, you are irrefutably rebutted:

ArticMine doesn't correctly apply the basic Economics 101 concepts of opportunity cost (above), supply&demand, and marginal cost (below).



The bolded (my added emphasis) portion of the quote is incorrect because (if you were correct about your erroneous claim of it being economically worthwhile) then the demand for the obsolete mining equipment would rise and thus the selling price (and thus unused depreciation) would also rise. You seem to not factor into your thinking the concept of how when a good becomes newly substitutable then its supply/demand/price changes.

Actually what is pointless is this entire debate. You started a thread about Monero's launch, and Monero is currently mined with CPUs and GPUs. So what is even the point of arguing what will happen when the latest generation of Bitcoin, ASIC miners becomes obsolete?

It is pointless because it is a pita. Why bother. As I pointed out, all your global neighbors will compete with you for that 1 cents, so it declines asymptotically towards 0.

You don't seem to understand economics at all. Please learn about the essential Economics 101 term "opportunity cost".

I don't think I should be required to give remedial course in Economics 101. Perhaps it has been decades since you took that course and need a refresher.

If 11.7 cents of electricity nets 11.7 cents worth of heat plus 1 for cent of income for 12.7 cents total it is not pointless. Why do you have such difficulty understanding what the free market is saying? There are situations where it makes economic sense to  operate an electric space heater. As long as these things are sold, and people buy them and operate them, then my case stands.  

If 11.7 cents of electricity only nets 1 cent of income, it is pointless.

I said in the 100% electric heat case not the natural gas case.

Incorrect. Do the math. You entirely ignored the main point of my prior post.

Any way it is pointless because unprofitable PoW is coming... so it is pointless for me to debate what will be deprecated later this year.

What you are describing here is a new generation of ASIC that has a 75x efficiency advantage over the previous generation. Even in this case the old ASIC is still competitive in the 100% electric heating case since 1) The old ASIC has zero capital cost since it has already being depreciated and 2) There is zero effective electricity cost.

The real issues here are
1) The builders of the ASICs are also the operators of the ASICs
2) The Bitcoin at 1MB block size is too small relative to the Bitcoin 10 min block time. This allows 1) above to happen, by minimizing the impact of the Great Firewall of China.
3) The whole POW mining algorithm in Bitcoin is broken regardless of how Bitcoin is mined, since the emission in Bitcoin will go to zero over time. We can debate forever how Bitcoin will fail over this, but I understand that we are in agreement that this will cause the eventual failure of Bitcoin. Even with fixed 1 MB blocks I fail to see how the "fee market" in Bitcoin is supposed to work.

ArticMine you entirely didn't address my point that if marginal cost of mining one CC token is $600 (yet the mining farms such a 21 Inc. project a $8 cost for themselves), then if suddenly millions are mining to pay some portion of their electric bill, then the market price of the CC token is going to fall down closer to the actual cost of production $8 because those are millions of sellers (if they don't sell, they don't lower then electric bill).

Mining equipment has a capital cost also. If they are unwilling to pay the capital cost for natural gas, why would they be willing to pay capital cost for mining equipment to lower then electric bill by less than switching to gas will.

Besides, once we turn mining into a race to consume the most electricity in the most ways possible, then it means we will drive the electricity costs of producing a transaction up to the value of a transaction, because block rewards decline to the miniscule tail reward (or 0 in Bitcoin's case), so the only revenue remaining are the transactions.

This is 21 Inc's strategic mistake also. I have a design that will render all of 21 Inc's plans uneconomic.

By your own figures you are still reducing the mining cost by 33%, the cost of the natural gas, so ignoring this does not make economic sense. As to whether natural gas or electric heat is the better option there are a host of issues above the cost of the energy it self. two major ones are:
1) Capital cost are higher with natural gas
2) With electric heat is easy target specific areas rather than the whole house, business etc. This is where electric heat can have big gains over natural gas.
My point remains. As long as electric heat is part of the equation there is the opportunity for 100% savings. If it is not then the savings can range from 25% to 70%. or more

Edit 1: Here is an example at http://www.csmonitor.com/Environment/2012/1207/Cheapest-way-to-heat-your-home-Four-fuels-compared/Natural-gas-1-024 Natural gas comes in at 78% of the electricity cost.

Edit 2: About the only case where you could have a case is passive solar heating; however even there can be a small electrical component.

Natural gas is 1/3 the cost of electric heating:

http://homeguides.sfgate.com/comparing-cost-gas-furnace-vs-electric-heater-61395.html

So if someone is using electric heating, then it is because the cost is irrelevant to them. Thus mining a CC to recover a small fraction of that cost is ludicrous. Remember the mining farms near hydroelectric power (or free subsidized electricity alleged in China) will eliminate any possibility of getting much income from your residential mining rig.


Exactly. Come on man, up your game to producing well researched white papers and stop throwing these poorly contemplated theories at me. I find I am often wasting time rebuking these half-baked concepts that you haven't really thought out well.

like a business, i install it, you get heat i mine coins? IoT ? lots of buildings have no choice/not allowed, plenty of people dont care also

does it matter its where we wanna be, lets burn some powow and make sure there is plenty of electricity

You can ignore reality if you wish.  Take a pure carbon fuel such as coal. The efficiency of a coal fired power plant is upwards of 30% in some cases 40%. The efficiency of a coal fireplace as a source of heat maybe 5%. I used to live in the UK where coal was commonly used to heat homes even in the 1970's It is been phased out because it is so inefficient.

Edi 1t: Repeating the same erroneous statement over and over again does not make it correct. Here is Canada there is a large number of residences and businesses that are heated with electricity. Furthermore even if one were to use a fuel such as natural gas, it still has a cost and if that cost is displaced by the POW mining operation, this an economic advantage that only works if the mining is decentralized. All of this is basic thermodynamics.

Edit 2: You are also ignoring cooling and air conditioning costs. Setting the value of the heat produced as a by product of POW mining to zero makes zero economic sense. The heat produced has a positive or negative value that depends on the weather. It also depends on the heating needs of the miner. If one produces more heat that is needed to heat one's home then there is no or negative value on the excess heat. This is where that small player can have high advantage since scaling to a larger POW mining operation actually increases the per unit cost.

How many times have I pointed out that using electricity for heating is not economic. We use carbon based fuels for heating. There is an orders-of-magnitude difference in efficiency. If you are a Physicist and don't know this, I am flabbergast.

It looks like in your excitement after coming up with a partial rebuttal to one part of a sentence you have missed the context, an unwitting strawman.

The context was that instead of funding development and the ecosystem, the miners are now funding something else. That something else can be electric power industry shareholders and/or hardware manufacturers like NVIDIA and AMD for example. Furthermore, people who can't use miners to heat their houses can't compete with those who can which causes even more centralization and unfair market condition.

Or perhaps the solution to fair distribution and funding development you're suggesting is to move all the devs to the north so they can get free coins while heating up their houses?

I have no clue what the fairest distribution is but the best (I would guess) would be an equal amount distributed to everyone and I have no clue how this could be accomplished and then there is of course an emission of that same amount being distributed to those born and whether it should be destroyed at death or not as well as what percentage should be put aside for the eco system. There is no perfect distribution and probably never will be. BTC's certainly was not fair but it is what it is, it's all in degree's of fairness. No-one complains about BTC's distribution and the job of alts is to find a acceptable to the masses distribution method and those do not include scams as they are always found out.

I did not continue to mine XMR on release (I stopped after 2 days) because I could tell there was too many coins than should have been. I have never been one to say it is the fairest distribution and I haven't noticed it being a selling point supporters are using. I've seen the argument that all the crippled miner coins have all been dumped out of the system by now and I believe this to be true. Now Shit coins like DRK were the worst possible distribution (and bytecoin for that matter) with the relaunch and out right lie about another relaunch which stopped most of us from mining it on the second launch only to have evan bribed by a large mining pool the next day. And all these premined coins are nothing more than money grabs. POw does seem to be the best method even if a percentage is gamed by illegal hash with  percentage going to a coins eco-system, what that percentage should be again I have no clue. I also have no clue how a continuous flow of Dev funds should be managed so as not to be gamed but since we are talking about fair distribution I would say that is a best case.

I am not promoting theft, just telling it like it is. By the way I guess you will not be able to participate in the stock market, which is the heart of capitalism, since every major stock exchange uses software with "viral communist Copyleft licenses" The licenses were inspired by and to a large degree written by this guy. https://en.wikipedia.org/wiki/Richard_Stallman. Furthermore  you also may not want to use Windows 10 because Microsoft has rewritten the Windows kernel in order to run the GNU toolchain on top of Windows. https://blogs.windows.com/buildingapps/2016/03/30/run-bash-on-ubuntu-on-windows/.

Edit: I do not condone software piracy. Furthermore I have on more than one occasion identified software piracy and provided cost effective alternatives that eliminated the "theft of intellectual property". 

You still have not answered my rebuttal to your claim "POW mining is equivalent to paying the utility companies for electricity". It is you who drew your gun first and fired wide. Now I get to shoot. You Americans should understand this.

Edit 1: One does not need a mathematical proof or a white paper for something that should be obvious: Such as In many cases it makes economic sense to run an electric space heater when it is -40 C or F outside.

Edit 2: Maybe you slipped on the ice.