Topic: What assumptions are people using to justify adding mining rigs? (Read 5093 times)

How about this, at no time in the last year has bitcoin cost more than 1/4 of its exchange value to generate based on electricity. It's currently at about 1/17th the value to generate (this fluctuates over time and just left an all time high). People have been doing calculations like you have for months saying the same thing you have

You miss the quote from Satoshi's paper:

The incentive may help encourage nodes to stay honest.  If a greedy attacker is able to
assemble more CPU power than all the honest nodes, he would have to choose between using it
to defraud people by stealing back his payments, or using it to generate new coins.  He ought to
find it more profitable to play by the rules, such rules that favour him with more new coins than
everyone else combined, than to undermine the system and the validity of his own wealth.


Of course there are sociopaths, who don't want make money. But usually they can't raise capital. And the notion of state (who doesn't need to be for profit and have capital) running >50% of network power to double spend seems to be absurd to me (though i can be wrong).

Is this actively being discussed in the security related parts of the forum?

A smart attacker would create his pool ahead of time - e.g. one of the current pools could actually be the attacker.  They would have two versions of the mining pool SW - version #1 is the "honest" one, they would run this for a while, likely with low-to-no fees, to get a reasonable user base and reputation.  Then, when they feel they are ready, they would DDOS enough other pools to make people flock to theirs. Once they hit 50%, they would activate version #2 of their mining pool SW, the one that steals coins/double spends/whatever.  Since they own more than half the hashing power at that point, they win.  People will eventually figure it out, but when they do, confidence in BTC will be crushed and you would see a crash in values.

I for one is ok with the Russians ddosing pools reaching 50%. Some thing has to be done.

And as for people using assumptions to justify mining rigs... well it's mostly ignorance I bet. Because speculating for higher btc price means buying will still yield higher again compared to mining as it's been since the rise of btc pricing this year. The times of mining for profit for long time at .70 cent per btc is over. The cat is out of the bag if you didn't notice. The difficulty will keep climing at high rates now and it won't slow down like people hope. The opposite is more likely to happen and speed up even faster.

At current uptrend on pricing, sure mining looks to be safe, but investing has proven much better with prices going up anyways. If you are still buying instead of investing now.. you are simply ignorant imo and haven't done the math. Free hardware can be bought with or without mining..  As for me I'm putting money where my mouth is and stopping reinvesting in mining equip and buying instead. My profits speak for themselves and I won't need anyone here to agree with me. I just hope people will finally realize and make even more money with me. I mine and invest both and making money from holding btc is infinitely easier than monitoring and running miners at home with noise and heat.

Amandla!

Bingo.  The goal here is to participate in the revolution.

Shall I drop $4k into a top-of-the-line tri-GPU monster, without any guarantees of return?  You sure-as-hell bet I will!

With WikiLeaks busy leaking, DarkNets in production, and NameCoin/BitCoin all working together to revolutionize and free the world's communications and monetary systems, a couple of high-end gaming computers is the *least* I can contribute.

Oh, and, there's still a chance for profit, too!  Win/Win.

That's disturbing, all the hashing power inuse today can be
bought for only 2 to 8 million and a fake pool could have us all working for the attacker? So how can we secure the pools? Maybe open-source pooling software of some sort?

Yeah, one pool down means everybody switches. But, when all pools have problems?

I am not sure, but a lot of people with < 1GH/s would not go solo. Waiting a month for single block on average requires a lot of patience and good nerves to not loose faith.

If the pools would not be invented last year, I guess the network would be 1/10 or less than it is today.

Plus, the attacker can "prepare" his own new pool while attacking all remaining. All would switch to his pool, and he would easily gain >50% of network. You would not know at all, he can "fake" his pool stats. Then, he rules the network.

There was indeed a noticeable effect when deepbit first went down to the DDOS.

In the hour after the attack the network only solved 2 blocks. It improved from that point on, but it still wasn't great. That certainly isn't desirable or what I would call healthy.

127555    2201f7d916...    2011-05-29 22:41:30    43    1472.65095723    21.143
127554    15fa32c760...    2011-05-29 22:13:38    37    877.09812426    23.145
127553    1de06a4a0a...    2011-05-29 21:46:22    47    2052.27689526    17.552

Miners are slow to notice, slow to react, and I suspect some didn't bother switching at all.

I wonder how many miners would even bother (or are capable) to set up back-up solo mining if a coordinated attack was able to shut down 4-5 major pools.

This completely wrong.  I'm tired of people spouting off this nonsense.   If all the pools dropped, people would mine solo.

If you look at deepbit, when it was hit by DDOS, everyone switched.  There was no "loss" of pooling.   

Or are you assuming all of us mining are NOT greedy bastards and would flounder around saying "AHHH POOLS ARE DOWN NO MORE MINING!?"  If anything we are greedy and would start mining like mad thinking that deepbit is down and therefore 1/4 the total pool.  (Completely wrong.)

No, there's no worry about DDOS and then someone taking over the network that way.

Here's the key assumption you need to go in with.

Imagine whatever you spend you'll never get back and don't spend any more money than you can afford to live without.  If you make back your original investment down the road, great, if even more, that's gravy.

Whatever you do, don't go out and max your credit cards out expecting you'll get the cash to pay it back in a month or two.

Don't get me wrong, I'm not trying to dissuade anyone from mining or BTC's.  I'd highly suggest you get into mining however you can because it's a blast and you'll learn a lot.  But just go in with the assumption that you'll never get your money back and have fun with it.

The problem with this calculation, is that by the time they got through bureaucracy & installation, they need 10 times this amount

This.. The OP is (wrongly imho) assuming a full depreciation of his equipment after only 3 months. The GPUs should be easy to sell for at least 50% of what you paid for them, even after a full year.

Getting my next rig for free/close to free

its my bday soon and sent all the people who give me gifts a recommendation item to get me hehe, and i know half of them did already

who can say 'no' to free hardware?
my excuse is, that the hardware will probably pay off for itself sooner or later (may it be 1month, or 6),
after that point, i can do with that practically free hardware, whatever i want, give it to family-members or friends for free (or for a favor), sell it for profit, or just let it keep mining for even more profit.

and why should the government be able to freeze Ghaddafi's assets?
why only his, why not yours too? do you have different rights than he has?

I think that to survive the option of a DDOS attack the next version of the minner should have the option that if there is no connection to the server to try and connect to another pool ...
and finally if there is no connection to try and do solo minning.. I can build a guiminer that will do it but I see no point in rebuilding everything from scratch ..
I think this is very important!!

There are cases in my mind where giving governments the ability to freeze assets makes sense to me. For instance, freezing all of Ghaddafi's assets.  This wouldn't be possible with Bitcoins I believe. I am certainly aware there are benefits to have a means of exchange that isn't controlled by governments, but I'm not 100% convinced yet.

I will take that bet if it includes that there is still no Dwolla/MtGox-like ACH way re-established within the 6 month period.

Welp, this thread was interesting, up until the end of the last page 

We've stumbled upon something far more interesting than a bet. Why on earth would you entertain the validity of forbidding alternative currency as a 'non-stupid' law?

How about making the bet that BTC is worth it's prebreak price six months after a dollar break? So of its illegal tomorrow it's worth $10 dollars again by Jan 2012, as calculated converting from BTC to trading currency to USD.