[HN Gopher] Crazy crypto mining story from 2013
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Crazy crypto mining story from 2013
Author : lemonking
Score : 168 points
Date : 2022-10-18 12:08 UTC (10 hours ago)
(HTM) web link (joonaskoppa.medium.com)
(TXT) w3m dump (joonaskoppa.medium.com)
| lemonking wrote:
| I wasted my student welfare checks, sold my belongings and
| dragged myself into debt to go all-in during the first Bitcoin
| mining gold rush in 2013.
|
| A true story that sheds light onto what crypto mining was like
| before the times of warehouse mining farms and dedicated mining
| hardware (FPGA & ASIC).
|
| Wishing to hear from others with similar experiences in the
| comments. Take me back to the good old days.
| llampx wrote:
| Did you keep some coins for later and sell near the peak in
| 2017 or 2021? If not, do you wish you had?
| lemonking wrote:
| I didn't keep any, but I also don't regret it. I would have
| sold them many times over on the way to those peaks. I do
| nowadays HODL some coins no matter where the price goes but
| these were purchased via fiat during the last year or so.
| devX3 wrote:
| well shit, I'm also not a financial genius myself, had a
| huge opportunity to buy a lot of eth in 2016 and was like
| meh. So now I'm back to wageslaving.
| lupire wrote:
| If it's any consolation, your Eth would likely have been
| stolen.
| kurisufag wrote:
| I appreciate you're not a crypto fan, but must you post
| something snide under every comment chain in the thread?
| EVa5I7bHFq9mnYK wrote:
| I bought an FPGA miner in April 2012. Very soon made obsolete
| by ASICs. So by no means was 2013 "before the times" of FPGA &
| ASIC.
| adrianomartins wrote:
| Well, that sure is an entertaining read. I can't imagine what
| the struggle was. Back then I would do ridiculous small bets on
| rising crypto coins and feel extremely stress, I can't imagine
| what you've been through...
| mdrzn wrote:
| I sort of had a similar story, started mining mid-2014 and went
| "all in" after Doge was born, for a couple months. LTS I sold
| all my doges in the following years, the last of which just a
| couple months before Elon decided to tweet about Doge and
| skyrocket the price.
|
| Good times.
| Defitio wrote:
| Sooo what your thoughts on climate change?
|
| Did that ever cross your mind?
| mrshadowgoose wrote:
| One does not solve climate change by shitting on "immoral
| users of electricity" ("immoral" from your point-of-view).
| You might not personally value cryptocurrency activities, but
| many other people clearly do.
|
| Our entire society is based on energy, and our cumulative and
| per-capita use of it is only trending upwards. Arguing for
| increased green energy generation helps all electricity users
| fight climate change, regardless of your perceived morality
| of their usage of it.
| Defitio wrote:
| When the topic is crypto it's valid to bring up relevant
| crisism.
|
| I'm also advocating for more green energy.
|
| And no just because some people like the advantage of
| crypto doesn't make crisism invalid. To bring up an extreme
| example for simplicity: smoker like smoking. Heroin addict
| likes heroin. Fast car driver likes to drive fast.
|
| And yes to finish this: this is a comment from me which
| states my viewpoint of it. My perceived morality is exactly
| what I'm commenting with together with arguments. That's
| the point of a discussion or comments.
| plebianRube wrote:
| Bitcoin is great for the climate.
|
| It currently uses .1% of global energy, instead of all the
| worlds energy as predicted in 2017. It makes use of stranded
| energy, off peak energy stabilizing grid production,
| incentivizes green energy build outs, and with the landfill
| methane caputure business will soon be the only digital asset
| that is carbon negative.
|
| What have you heard? That it is a climate disaster and you
| should stay away?
| plopilop wrote:
| > It currently uses .1% of global energy
|
| ie. about between 300 and a million times more energy than
| VISA/Mastercard when adjusted to the number of
| transactions. [0]
|
| > It makes use of stranded energy
|
| Miners who mine 24/7, by definition, do not consume
| stranded energy. There are no numbers whatsoever that can
| affirm which part of the miners use stranded energy. On the
| other hand, when _one_ coal mine got flooded in China last
| year, 33% of the mining power came to a halt. [1]
|
| > off peak energy stabilizing grid production
|
| So much stabilizing it has caused blackouts in several
| countries [2]. Texas has resorted to pay miners so they
| don't cause blackouts [3]
|
| > incentivizes green energy build outs
|
| No, it incentivizes cheap electricity sources. Moreover in
| the topic of climate change the greenest energy is the one
| you don't consume.
|
| > with the landfill methane caputure business will soon be
| the only digital asset that is carbon negative
|
| What? Landfill methane business is basically saying
| "instead of just burning methane, let's burn it and use the
| heat to power up some BTC mining". At best, that makes the
| operation carbon neutral.
|
| If you are trolling, I must say, congrats, you triggered
| me.
|
| [0] https://digiconomist.net/bitcoin-energy-consumption [1]
| https://fortune.com/2021/04/20/bitcoin-mining-coal-china-
| env... [2] https://www.bloomberg.com/news/articles/2022-01-
| 25/kazakhsta..., https://www.bbc.com/news/world-
| europe-59879760, https://www.cnbc.com/2021/05/26/iran-bans-
| bitcoin-mining-as-... [3]
| https://fortune.com/2022/07/12/texas-bitcoin-miners-paid-
| shu...
| plebianRube wrote:
| Great thing about bitcoin is you don't have to use it at
| all. It is opt in.
|
| I don't tell you what to do with things you buy that I
| think are useless.
|
| Those who purchase or generate electricity can do so with
| it as they wish, it is a free market.
|
| You can post all of the articles you want, the innovaters
| are outpacing the obstructionists as they have been for
| millennia, it's nothing new under the sun, and progress
| marches on.
| lolc wrote:
| You came on with claims of how good Bitcoin mining is for
| the climate. When someone counters your arguments, citing
| sources? Eh whatever liberty something. So do you believe
| what you were evangelizing about?
| Defitio wrote:
| It's not a free market.
|
| There is no lead paint anymore and no lead in gasoline.
|
| I'm often wondering who is behind those comments. You
| should be quite aware that there are plenty of counter
| examples to this 'free market's statement.
|
| And yes there also laws like non smoking to protect
| others.
|
| Energy can also be shut down for you from the energy
| ministry if your usage has a risk to the power grid.
|
| About the uselessness point: also not a good point on
| your side. We all life on one planet. It's absolutely
| valid to have a discussion like this.
| plebianRube wrote:
| You're going to have to get used to people ignoring you
| and working around you then.
|
| I don't want to help you understand bitcoin, because I
| don't want insufferable obstructionists having a say in
| humanity's future.
|
| What you value is cleary different than what I value and
| that's fine, but there is nothing you can do to stop me
| from using my preferred value store, and that is exactly
| the point.
| Defitio wrote:
| You would at least be honest in a discussion if you say
| that you don't care for the climate impact or accept that
| your arguments in regard of Bitcoin and being green are
| wrong.
|
| I'm not arguing for people like you who don't care. I
| argue for everyone who hasn't maid up their minds and
| want to have real arguments for pro and con.
|
| Without people like me there would be no push back at all
| and there is active push back.
|
| The power station in NY got much more criticism than it
| would have gotten otherwise (none).
|
| Very weird your reaction though. Do you'really believe I
| stop arguing against Bitcoin just because crypto bros
| don't care for arguments?
| scottiebarnes wrote:
| > ie. about between 300 and a million times more energy
| than VISA/Mastercard when adjusted to the number of
| transactions. [0]
|
| This isn't really an apple to apples comparison. Since
| Bitcoin is a programmable platform, its possible to scale
| upwards exponentially with layer 2's (Lightning network),
| which allows for even more tps. Since transactions
| wouldn't need to run on the main chain (other than
| opening and closing channels), the upper bound is much
| higher.
|
| https://d-central.tech/bitcoins-lightning-network-from-
| seven...
| plopilop wrote:
| A real, complete comparison is impossible as the two
| systems are fundamentally different and too complicated.
| What I like with that comparison is remains very simple.
| If you'd scale BTC to the amount of tx operated by
| VISA/MC, you'd need around 50% of the world electricity,
| which is clearly more than what Visa takes. Also it's a
| comparison of the fundamental part of the exchange, i.e.
| the authority checking for the authorization (visa or the
| miner).
|
| If we incorporate the lightning network, then we must
| also take into account the electricity to run the servers
| for the intermediate exchanges etc. On the other hand,
| one could also lower the fiat electricity cost by
| factoring in the cash transactions.
|
| TBH i'd be interested to see a reasonable estimation of
| the BTC+lightning emission costs per transaction, I'll
| admit I have no idea how much lightning brings the cost
| down.
| scottiebarnes wrote:
| > If you'd scale BTC to the amount of tx operated by
| VISA/MC, you'd need around 50% of the world electricity
|
| Well, it doesn't make sense to scale the main chain in
| that sort of way, because you'd be looking at blocks the
| size of several terabytes in order to fit in global scale
| transactions. And so running a node would then require
| you to basically run a data center, which wouldn't make
| the system decentralized at all.
|
| Electricity for mining is also not directly related to
| transaction throughput. Mining is the arbitrage of
| bitcoin price and electricity/mining hardware cost. The
| system technically does not need more electricity to
| secure the same amount of transactions. What happens is
| when bitcoin's price goes up, so does that arbitrage
| value, giving mining a profit incentive.
| plopilop wrote:
| > because you'd be looking at blocks the size of several
| terabytes in order to fit in global scale transactions.
|
| My comparison would rely on running several bitcoin
| networks in parallel. Of course it does not make sense
| economically speaking, but it allows for a back of the
| envelope estimate.
|
| > Electricity for mining is also not directly related to
| transaction throughput
|
| This is true, but when you look at the C02 consumption
| (which was the topic of discussion when I first posted,
| before my OP decided to completely change subject), the
| mining cost is what you look for.
| scottiebarnes wrote:
| > My comparison would rely on running several bitcoin
| networks in parallel. Of course it does not make sense
| economically speaking, but it allows for a back of the
| envelope estimate.
|
| Mmmm, I understand you're looking for a convenient way to
| mathematically equate the two on a per transaction basis
| for comparison's sake, but its just really difficult. For
| example, your several bitcoin networks in parallel
| doesn't really exist, because separate networks running
| in parallel are not interoperable (Bitcoin vs Litecoin).
| You lose the utility of network effects, etc.
|
| Its like comparing energy costs of bicycles and ocean
| freighters, but no amount of bicycles could ever tow
| freight across an ocean.
| Defitio wrote:
| Ah yes the lightning network argument.
|
| In practice people have problems even understanding
| bitcoins (general speaking and El Salvador specific) and
| now lightning is the solution while people not even get
| Bitcoin.
|
| But yes lightning also doesn't work in El Salvador.
|
| So
| scottiebarnes wrote:
| > But yes lightning also doesn't work in El Salvador.
|
| Do you have any citations?
|
| I'm running a lightning node on testnet...have had some
| small issues finding a pathway in the graph to one of my
| nodes, but then again I'm new to it.
|
| > In practice people have problems even understanding
| bitcoins (general speaking and El Salvador specific) and
| now lightning is the solution while people not even get
| Bitcoin.
|
| Most people don't understand how tcp/ip or dns work, yet
| they have no problem using applications based on it on a
| daily basis.
| Defitio wrote:
| There was a documentary in Arte. It's a french German art
| channel state funded.
|
| A reporter went there after she got invited from him and
| zig other crypto bros.
| scottiebarnes wrote:
| Right, well I haven't seen that program, but here's some
| realtime lightning network statistics:
|
| https://1ml.com/statistics
|
| Currently ~17k nodes, 82k channels, ~5k BTC capacity
| ($100m) on the network.
|
| The network's capacity is up about 66% is the last year:
| https://bitcoinvisuals.com/ln-capacity
| Defitio wrote:
| I found it and it has subtitles:
| https://www.arte.tv/en/videos/101938-007-A/42-the-answer-
| to-...
|
| Arte is quite known for its cultural tv and
| documentaries.
|
| And your statistics is not saying much. Relevant is real
| life. Take a look at the documentary how people in El
| Salvador use crypto and not some white dude with too much
| money waiting for the next big thing.
| scottiebarnes wrote:
| I'll try and watch it but it seems geo locked.
|
| > And your statistics is not saying much. Relevant is
| real life.
|
| The statistics are real life: they represent people
| committing time and resources by hosting nodes and
| risking their btc to use on a developing, experimental
| live network.
|
| But what you're doing is the equivalent of looking at
| early 90's internet, not understanding it, and
| pronouncing, 'This is stupid, nobody will use this
| 'Internet' to meet other people. People aren't going to
| order their pizzas online. Just ask anyone on the street;
| nobody knows what internet is, and therefore this is a
| failure.'
| vvvvvo wrote:
| ambicapter wrote:
| If anyone was wondering, he made 10000 euros in the end.
| tamcap wrote:
| Did he?
|
| > I paid off all my debts, bills and rent, and the cold
| realization hit me: I had nothing left over to show for it.
| SamPatt wrote:
| The 10.000 euros is what he used to pay everything off.
| extantproject wrote:
| https://archive.ph/6JiHU
| Renevith wrote:
| As soon as I started reading I knew this was going to involve
| stealing electricity.
|
| "took it to my friend's student dormitory where the electricity
| was "free"."
|
| I was not disappointed! Life hack: stealing can make you money!
| googlryas wrote:
| Do dormitories put acceptable use/abuse policies on the free
| electricity they give you?
|
| I know for a fact my university in the early 00's did not have
| an acceptable use/abuse policy on internet usage, and I was the
| person that caused them to create that policy!
|
| We had 2 T-3s for internet access, one dedicated to dorms, the
| other dedicated to labs/office spaces, but there was fast LAN
| access between the dorms and the labs. The dorm T3 was always
| slammed in the evening by about 5000 students, and the
| lab/office one was 100% available - so I set up squid proxy on
| a lab computer, and was getting 10 Mbps where everyone else was
| getting 50 kbps.
|
| A sysadmin saw the process running and tried to kill it and it
| forkbombed for some reason, crashing the lab computer. So they
| came and knocked on my door and made me sign a paper saying I
| wouldn't do it again, and then next year every incoming student
| had a to sign a policy saying they would behave on the network.
|
| I still maintained that I did nothing wrong, and it was the
| sysadmin that didn't know how to kill a process appropriately
| that needed to be talked to.
| SideburnsOfDoom wrote:
| > Do dormitories put acceptable use/abuse policies on the
| free electricity they give you?
|
| The dormitory did not give the free electricity to the
| author, but to their friend.
|
| If, for instance, an "all you can eat" buffet had an
| acceptable use policy, I do not think that it would allow
| "you can also feed a friend".
| googlryas wrote:
| So you believe it would be against policy for a non-
| resident visiting a resident to plug their phone in to
| charge?
| nl wrote:
| Of course it's against policy.
|
| It would also rightly be ignored.
|
| A visitor charging their phone? Ignore it. A resident
| running an extension cord to the carpark to charge the
| car of a different visitor every day? Enforce it.
|
| Don't ask bad-faith questions like this. There's nothing
| gained by arguing the extremes of a case.
| Arubis wrote:
| The uni I attended did indeed have an "all you can eat"
| buffet, and strong-armed dorm residents into overpurchasing
| meal plans. Students swiping in people experiencing
| homelessness to expend their otherwise-forfeit meal credits
| was a relatively common sight.
| top_sigrid wrote:
| This is just at the beginning of the story to be fair. Later on
| he is mining in his living place and also writes about the
| electrity cost needing to be covered by the mining revenue.
| lemonking wrote:
| The universities also very quickly banned crypto mining in
| dormitories. People still did it secretly, but it was very
| easy to get caught. There would have been no way to have any
| sizeable operations in a dorm.
| AmericanChopper wrote:
| A friend and I managed to run a PS3 cluster mining bitcoins
| in one of the labs on campus for pretty much the entire
| 2009 academic year. But I think that was before mining rigs
| became much of a nuisance.
| SamPatt wrote:
| I'm extremely skeptical of this claim.
|
| Only a handful of people were mining Bitcoin in 2009,
| which is the same year it was created.
| AmericanChopper wrote:
| -\\_(tsu)_/-
| lupire wrote:
| Yeah, only computer tech geeks were using it then. The
| kind of people who would do wild stuff like go to college
| and install Linux on PlayStations.
| lottin wrote:
| I don't know if Linux users had (have?) much sympathy for
| bitcoin.
| kolinko wrote:
| It was mostly hackerspace/linux kind of people back then.
| squeaky-clean wrote:
| I'd say 2009-2012 it was mostly Linux users, at least the
| communities I was in.
| greycol wrote:
| I know a gui for bitcoin core was available for windows
| machines by at least the end of 2010 as that's what I
| used when I was first reading about it.
| idiotsecant wrote:
| I think Linux users are humans with a range of interests.
| jefftk wrote:
| The 2009 academic year runs from Fall 2009 through Spring
| 2010, so it may be a bit later than you're thinking?
| EVa5I7bHFq9mnYK wrote:
| The first Bitcoin difficulty adjustment happened on Dec
| 30 2009. Which means that for entirety of year 2009 there
| was on average just one computer mining Bitcoins.
| cj wrote:
| Not really a stretch. I have a similar story that I can
| attribute to 2009/2010 (attempting to mine on the
| person's computer I was living with at the time)
| seper8 wrote:
| And you're proud of this treft why exactly?
| snapcaster wrote:
| You're on _hacker_ news dude
| Loughla wrote:
| That's an interesting statement. Are there still people
| on here who define hacker as a bad thing, instead of
| someone who wants to take things apart to see how they
| work?
|
| Is tech still counter culture now that it pervades every
| place in society? Is it still okay to completely shirk
| the law now that many tech companies, for all intents and
| purposes, write the laws?
|
| These are interesting questions to me.
| lupire wrote:
| The distinction between legal and illegal hacking it
| relatively recent. Stealing small amounts of money or
| value goes way back.
|
| And Hacker News is run by YCombinator, which has an
| application form that asks applications to explain a time
| when they cheated ("hacked") a system for personal
| advantage.
| q-big wrote:
| > Is tech still counter culture now that it pervades
| every place in society?
|
| Tech is not counter culture (and has in my personal
| observation never really been). Hacker culture, on the
| other hand, was counterculture from beginning on and
| still mostly is.
| jazzyjackson wrote:
| To be a hacker is to know the rules well enough to work
| around them
|
| Besides, breaking the law is not inherently a bad thing.
| bleuarff wrote:
| I'd say the stereotype may include a willingness to break
| the law in order to achieve some technical feat.
| lupire wrote:
| Or a willingness to achieve some techical feat to break a
| law.
| brianwawok wrote:
| Is it a technical feat to install code someone else wrote
| on a computer and click RUN?
| AmericanChopper wrote:
| Was just sharing my experience with the topic really.
| Tbh, building a PS3 supercomputer was one of the most
| educational experiences I had during my time at
| university. If they didn't have an 11 figure endowment I
| might almost feel bad about it.
|
| Edit: Also, I absolutely didn't get rich from this if
| that's what you're concerned about for some reason. We
| cashed out after an early price spike, pocketing several
| thousand dollars each, which with both considered to be a
| major windfall.
| helloworld11 wrote:
| Considering the typical behavior of about 90% or more of
| all major tech companies that many people on this site
| work for or contract to, it's laughable that you'd snark
| at someone talking about a minor pseudo-theft of
| electricity form a dorm room several years ago. Hell,
| much of the shit being thrown by commentators on this
| site on cryptominers, who often use renewable energy
| sources for their mining, is itself laughable considering
| how much electricity and resources the mega tech corps
| they work for burn all the time. You could argue that
| said companies do so for "better" reasons, but that's
| debatable and a separate matter.
| zinodaur wrote:
| Its not stealing to use a resource paid for by a friend
| tmpz22 wrote:
| Thats sick their friend paid the electric bill for their
| whole university dormitory - nice person.
| zinodaur wrote:
| no but they paid for the electric bill for their room. The
| university should have made a policy about per-room usage
|
| The Man will fuck you on any technicality they can - don't
| turn around and give them the benefit of the doubt
| lottin wrote:
| There are unwritten rules in society. If you don't
| understand that you'll have a hard time getting anywhere
| in life.
| RestlessMind wrote:
| Those who end up amassing fortunes have often ruthlessly
| exploited the loopholes of unwritten rules - Peter Thiel
| taking advantage of Roth IRA, Uber and AirBnB dumping the
| externalities of unregulated taxis and hotels on the
| wider society, Walmart putting its lowest paid staff on
| medicaid etc. Just look at Panama papers to see how the
| rich exploit all the loopholes to save on taxes.
| turmeric_root wrote:
| Are you implying that Peter Thiel should be seen as a
| role model?
| vvvvvo wrote:
| PragmaticPulp wrote:
| > As soon as I started reading I knew this was going to involve
| stealing electricity.
|
| My favorite crypto miner story was from a guy who caught an
| employee hiding ASIC miners above the ceiling tiles in their
| office. For some reason he thought nobody would notice. They
| noticed both the noise and the weird new devices on the
| network.
|
| I suspect he lost more money from getting fired than he gained
| from the crypto mining. His miners were offline for quite a
| long time while they were seized as evidence in the ensuing
| investigation, too.
| josu wrote:
| That's not what the story is about. The operation was being ran
| at his place, what you quoted looks more like the initial test.
|
| >Meanwhile, my monthly electricity bill was hovering somewhere
| around a thousand euros"
| woah wrote:
| Correction: The gif in the article is actually a depiction of
| Dogecoin mining
| giarc wrote:
| Which gif? All of them?
| vc9999 wrote:
| If you continue to mine you would be a billionaire today? Maybe
| the lesson here is just don't give up. Nice story anyway.
| spyder wrote:
| Probably more so by "hodling" instead of immediately selling to
| buy more hardware, or selling half for hardware and holding the
| other half to split the risk between the two option. But it's
| easy to be smart after the fact...
| g_sch wrote:
| Seems unlikely, given that this story was told from the
| perspective of someone mining in the pre-ASIC era. I suppose
| they could have invested in ASICs early on, but they started as
| a broke student and the reason the story is fun is because they
| made it work on a shoestring. "And then I bought $200,000 worth
| of ASICs in an overseas datacenter" doesn't have the same
| effect.
| SamPatt wrote:
| ASICs existed in 2013. But they wouldn't have been obtainable
| to a broke college student.
| lemonking wrote:
| The problem with ASICs and FPGAs were indeed that you would
| have to order them some 6-12 months in advance and pay the
| multi-thousand cost up front.
|
| The FPGA/ASIC manufacturers were actually using their own
| stock to mine the best profits and only then ship them to
| customers.
| JohnJamesRambo wrote:
| I sold all my Ethereum miners around 2017 I think because proof
| of stake was "coming soon". It arrived a few months ago haha. I
| used the profits and all future money to just buy coins and that
| has worked much better. :)
|
| I do miss the heat of the Ethereum mine though. Thank you for
| sharing your story, it brings back a lot of memories. It also
| echoes the stories of most Bitcoin mining companies I read in The
| Age of Cryptocurrency by Casey and Vigna. Always racing on the
| hamster wheel of profitability against the difficulty algorithm
| and electricity prices and flirting with or going bankrupt. I'm
| glad proof of stake is finally here and we can move to a more
| sane way of doing things.
| unboxingelf wrote:
| I'm glad proof of stake is finally here and we can move to a
| more sane way of doing things.
|
| Proof of Stake isn't a drop in replacement for Proof of Work -
| it comes with completely different properties and implications.
| If you're just looking at it from the perspective of running a
| miner in your room, sure, but if you're talking about the
| security and longevity of the actual network...
|
| Proof of Work means participants in the network exchange energy
| to validate transactions. Anyone may participate without
| permission. Anyone may leave at any time.
|
| Proof of Stake means participants in the network, that already
| hold a large stake in the network (32ETH in Ethereum) deposit
| that stake in exchange for permission to validate transactions.
| You may not withdrawal your stake (Coming Soon(tm)) and if the
| transactions you publish are not inline with the rest of the
| network, you are fined (slashing).
|
| So while it's true both PoS and PoW can be used to validate and
| secure a blockchain network, they couldn't be further from each
| other. Proof of Work is currently the only solution for a truly
| decentralized network that's not susceptible to coercion.
| nootropicat wrote:
| To mine bitcoin you need to buy an asic, which is a single
| purpose physical good with at most two original maker (fabs).
| It needs to be physically received. This single distribution
| is trivial to track by the authorities and makes bitcoin
| mining a permissioned system.
|
| Energy use is so large mining at any non-negligible scale
| anonymously is impossible. Any serious miner will have to
| open a company, move to a special facility and get a special
| energy connection. Mining only makes financial sense in few
| countries with cheapest energy. Last but not least, due to
| the difficulty mechanism mining for anyone but enormous
| miners requires pooling with others.
|
| Pools are public entities that are yet another possible layer
| of control by regulation. Adding all that and the conclusion
| is that PoW has zero resistance to regulations. China could
| take over bitcoin, but they decided to throw away mining
| instead, only making it possible for America to do so in
| turn.
|
| All it takes is indirect or direct control over >50% of
| hashrate to censor anything. It's not possible to create a
| fork without censoring miners, because any minority fork can
| be trivially attacked in an adversary situation. If any PoW
| network even becomes important for American government to try
| to censor it there's no defense.
|
| To stake in ethereum, you need to buy eth, which can be
| trivially bought anonymously from anyone that owns eth, most
| likely fully online without any physical contact. A more
| permissionless system isn't possible. There's no physical
| trail, both from ordering asics and from energy use. All
| that's needed is an internet connection. Staking can be
| easily fully anonymous and can happen anywhere in the world.
| That's why PoS is the only way to have a decentralized
| network.
|
| It's always possible to fork with any arbitrary subset of
| validators, whether for censorship reasons or other
| disagreements.
|
| PoW is objectively worse than PoS in literally everything but
| as a method to distribute coins. Mining is a way to sell
| coins for energy and hardware cost, which is an advantage at
| the cost of being worse in everything else, but only in the
| early period.
| datadata wrote:
| > To mine bitcoin you need to buy an asic, which is a
| single purpose physical good with at most two original
| maker (fabs). It needs to be physically received. This
| single distribution is trivial to track by the authorities
| and makes bitcoin mining a permissioned system.
|
| There is no hard limit here on the supply chains for
| miners, this is like saying "there are at most two mobile
| phone operating systems". Sure it is somewhat true, but
| there is no deep reason it must be true.
|
| Second, bitcoin mining is not a permissioned system. A
| permissioned system means that the system itself imposes
| permissions. You are talking about actions outside of the
| system that would perhaps incentives people to not use the
| system. This is a concern but not the same as being a
| permissioned system.
|
| > All it takes is indirect or direct control over >50% of
| hashrate to censor anything.
|
| For bitcoin PoW and ethereum PoS (hashrate => stake
| percentage) this is true. However the difference is that
| with PoW it is possible to increase the supply of mining
| hashrate to overthrow this quorum of censorship by
| literally building more physical hardware. In ethereum, if
| this ever happens there is no recourse as the supply of
| coins to stake is finite.
| justajot wrote:
| > Proof of Work is currently the only solution for a truly
| decentralized network that's not susceptible to coercion.
|
| Enter Proof of Space and Time. PoST improves upon Proof of
| Work to maintain the high level of security PoW provides (if
| not improve upon it) while using considerably less energy. It
| essentially does the work once instead of for every block,
| storing the proofs with space and using the time component to
| collectively move the chain forward.
| lupire wrote:
| PoW _burns_ (wastes) energy, not _exchanges_ ". PoW is really
| "Proof of Waste".
|
| Anyway, the real world use cases are largely large money
| transfers and scams, and PoS is more efficient for that.
| unboxingelf wrote:
| No, it literally exchanges energy for digital
| matter/scarcity.
|
| Real world use cases are digital scarcity and digital
| commodities.
| justajot wrote:
| For now, but I don't think this is true for long. There are
| too many talented people working in this space who care
| enough to develop solutions to some really difficult
| problems that blockchains are perfect for.
| Defitio wrote:
| Ah yes of course there is no way of coercing someone in a PoW
| scenario.
|
| Very well argumented!
|
| (This is sarcastic )
| JohnJamesRambo wrote:
| You couldn't be more wrong about what you are saying. Bitcoin
| has zero long term answers for what happens when the block
| reward isn't enough to secure the blockchain in the future.
|
| https://www.bis.org/publ/work765.pdf
| [deleted]
| foxhill wrote:
| apologies, this is non-sense. this is what transaction fees
| are for. the gradual reduction in coinbase incentivizes
| miners to charge for transactions, and the desire for
| transaction completion incentivizes clients to pay for
| them.
|
| the paper you linked hand-waves away this for some reason,
| either to suggest that interest in bitcoin is purely
| speculative (which to be fair would only be half-wrong), or
| ignoring that market forces put upward pressure on
| transaction fee cost.
| cowtools wrote:
| Why do you expect transaction fees to increase?
| somenameforme wrote:
| One of the core strengths of Bitcoin is in dynamic
| difficulty adjustment. If there are fewer people mining
| then the difficulty to mine new blocks will automatically
| decrease, which will in turn increase the value/revenue
| per block. And vice versa in the case where there are
| more people mining. So regardless of the state of the
| market, you will always reach an equilibrium point where
| it will be profitable.
|
| The one asterisk that needs to be added here of course is
| that with sufficiently low difficulty, a double spend
| attack becomes more viable, but this is a somewhat
| overblown threat. It's low reward, extremely high cost,
| and 'easily' undone if the market so agrees. It shouldn't
| be ignored, because it is indeed a threat, but at the
| same it's also kind of a 'meh' threat.
|
| ---
|
| edit: And for those who are may not be aware. Even once
| the final Bitcoin is mined, miners will continue mining -
| something which may be counter-intuitive. Whoever mines
| the block will get no coins, but will get all revenue
| from the fees attached to whichever transactions are
| processed.
| cowtools wrote:
| >you will always reach an equilibrium point where it will
| be profitable.
|
| That is my point- that equilibrium point will eventually
| be low enough that 51% attacks, selfish mining attacks,
| etc. become feasible and highly desirable to execute.
|
| >It's low reward, extremely high cost
|
| It is currently low reward/high cost. But it will
| eventually not be.
|
| >and 'easily' undone if the market so agrees.
|
| False. Bitcoin has not made a hard fork in how many
| years? Can you make a hard fork faster than the attacker
| can "cash out" to crypto-crypto exchanges? Highly
| doubtful.
|
| >Whoever mines the block will get no coins, but will get
| all revenue from the fees attached to whichever
| transactions are processed.
|
| ... which is dependent only on the fee market, and
| currently amounts to a small fraction of total block
| reward.
| foxhill wrote:
| because i expect miners to not operate at a loss. they
| can address this by either turning off their miners
| (which is most likely to occur when coinbase dominates
| the block payment amount), or by charging more to process
| transactions.
|
| so far, by-and-large, the proportion of block profit
| coming from transaction fees has increased, as expected:
| https://buybitcoinworldwide.com/stats/fees-percent-of-
| reward...
| cowtools wrote:
| >so far, by-and-large, the proportion of block profit
| coming from transaction fees has increased, as expected:
|
| of course it has. I am not talking about the proportion
| of block profit, I am asking how you expect the total
| block profit to stay the same from just fees. The network
| will have to survive when the proportion will eventually
| be 100%
| smeej wrote:
| I expect on-chain transactions will eventually be
| extremely high-value, between major players and
| institutions willing to pay the fees, while the daily
| transactions will be on sidechains/other layers.
|
| I'm not sure the fees will actually change a whole lot if
| denominated in BTC. I just expect that when 1 BTC is
| worth a lot more than it is now in fiat, people won't be
| paying for their coffee on-chain (assuming inflation
| doesn't do crazy things to the price of a cup of
| coffee!).
| cowtools wrote:
| >people won't be paying for their coffee on-chain
| (assuming inflation doesn't do crazy things to the price
| of a cup of coffee!).
|
| Okay, but those LN transactions clearly depend on the
| security of their multisig channels without subsidizing
| the miners through the fee market.
| Aperocky wrote:
| So just like the current financial system where the real
| transactions are between the fed and the banks while
| everyone else you me and him are just fiddling with
| numbers in a mainframe table.
| unboxingelf wrote:
| You couldn't be more wrong about what you are saying.
|
| What part am I wrong about? The stake required to validate
| Ethereum[0]? The lack of ability to withdrawal it[1]?
| coercion[2]?
|
| [0] https://ethereum.org/en/staking/
|
| [1] https://ethereum.org/en/upgrades/merge/#merge-and-
| shanghai
|
| [2] https://www.coindesk.com/tech/2022/10/14/censored-
| ethereum-b...
| cowtools wrote:
| The solution is monero's tail emission:
| https://localmonero.co/knowledge/monero-tail-emission
| extr wrote:
| I have a similar story (albeit at a much smaller scale). Around
| 2017 when you could still mine eth-derived altcoins feasibly with
| a GPU, I repurposed my old gaming PC into a mining rig with a few
| old cards. I took off the side and taped a box fan to it to
| provide air-flow [1]. My apartment at the time was $950 flat, all
| utilities included, zero language about max usage in my lease, so
| effectively whatever I mined was 100% profit.
|
| I wasn't making much, maybe $50/mo at absolute peak? I'm sure if
| I had scaled up the property manager would have eventually
| wondered why/who was spiking the apartment building's electrical
| bill and I would have found the limit to my unit's "unlimited"
| electricity. But it was a fun project. I was working a full time
| job too, so I learned a lot about remote managing something like
| that. I had it all wired up with a VPN so I could SSH into the
| mining box from my phone. Here's another pic of my "workstation"
| at the time. The right hand monitor was my "status dashboard",
| really just a tmux session with htop, iftop, eth miner, etc...
| [2].
|
| I was ~25 and single at the time and the biggest obstacle to 100%
| uptime was actually if I wanted to bring guests or dates over,
| they would wonder why there was a jet engine in the corner of my
| studio apt. So I would shut it down in that case. Eventually that
| + loss of profitability + general jankyness of the setup led me
| to dismantling it. But it was fun while it lasted. The part in
| the OP about restarting the box with a screwdriving short
| definitely spoke to me. My box had a whole ritual around restarts
| that I discovered through trial and error, where I would power
| up, pull the plug, restart, restart again, and then it would run
| stable indefinitely. Good times.
|
| [1] https://i.imgur.com/vTDr7Ap.jpeg
|
| [2] https://i.imgur.com/SUFzTZh.jpg
| Underhill7 wrote:
| You can't undervalue the education received for this experience.
| The point is to try and fail at as many thing as possible if you
| are truly leaning from them.
| andai wrote:
| Can anyone suggest a way to read this without the gifs? I tried
| my phone's reader mode but it shows the gifs too.
| Eisenstein wrote:
| Brave browser can block them. That's what I did.
| jliptzin wrote:
| I hate when cryptomining is described as "solving extremely
| complex mathematical problems." That makes it sound like math
| professors gathering around a conference table burning the
| midnight oil trying to crack a formula when in reality it's just
| trying to crack a safe by randomly guessing the code over and
| over again - nothing complex about it.
| marktangotango wrote:
| I get your point, the calculations are generally just
| arithmetic, but there are in fact many cryptologist who spend a
| lot of time and effort understanding these algorithms and
| finding ways to "crack" them.
| InCityDreams wrote:
| >burning the midnight oil
|
| Deliberate?
| [deleted]
| tromp wrote:
| They mean very complex in the sense of very difficult. Which
| finding a hash output with over 75 leading 0 bits most
| certainly is.
| stall84 wrote:
| this sounds like a college fever dream
| naet wrote:
| So tons of energy (and mental energy) was wasted, graphics cards
| were hoarded and abused, and in the end nothing of value was
| gained. Sounds like crypto to me :)
|
| I'm glad the author took some positive experience from it though.
| There is something "fun", or at least gratifying, about going all
| in on something even when it puts you through hell.
| flotzam wrote:
| Another classic in the genre:
| https://nitter.net/eigenrobot/status/942839737563234304
|
| "so I'm mining monero to heat my apartment this winter" ... "My
| ceiling is now on fire"
| lemonking wrote:
| Thanks for the link! You have no idea how strong of a
| connection I immediately felt to the thought processes of that
| guy :D
| flotzam wrote:
| I can relate. The optimal number of ceilings on fire is not
| zero.
| k__ wrote:
| I was thinking to do something like that, since heating got so
| expensive this year.
| foobarian wrote:
| I was kinda considering this to use up the excess production
| from our solar panels, because the net metering is only
| returning a fraction of the market price. It will depend on
| the ROI from a small homelab-sized mining rig.
| Thlom wrote:
| One of the first crypto personalities in Norway did this back
| in 2011. Even had an article in the local paper. "Local man
| heats bathroom with his computer". Basically he had water
| based heating in the floor on his bathroom and had hooked the
| water cooling on his computer to that. Even had a script that
| would "start doing heavy calculations" when the temperature
| sunk below a threshold.
|
| Reference: https://www.cw.no/it-bransjen-komponenter/bruker-
| pc-en-til-a...
| Tijdreiziger wrote:
| Even with the increase in prices, electric heating is still
| much more expensive than gas heating (unless you use a heat
| pump, but then you're not mining anything).
| spyder wrote:
| Heater that mines bitcoin :-D :
|
| https://www.heatbit.com/
|
| https://www.engadget.com/2018-03-09-qarnot-
| qc1-cryptocurrenc...
| jollyllama wrote:
| I've had some chill landlords in my time, but this guy's LL is
| something else.
| SevenNation wrote:
| Good stories have a lesson of some kind. What's the lesson here?
| mrpopo wrote:
| If you want to become rich, take advantage of what comes for
| free and sell it. For this guy, it was welfare and free
| electricity. For others, it is healthy soil, or rich natural
| resources.
| minitech wrote:
| In this story, the electricity wasn't free and he didn't
| become rich.
| pelasaco wrote:
| I had a similar story, mining bitcoin with fpgas, litecoins with
| gpus and energy for free in a student dorm. I could however pack
| it in a free room in the dorm. Nobody cared about it. I did
| around 20 bitcoins, but sold almost everything before it hit 500
| euro/coin, because my girlfriend got pregnant and we needed an
| apartment. I held 3 coins, that after the network split with
| Bitcoin cash, was doubled. I ended up selling them well.. I still
| have 5000 peercoins, since the idea was great, and I was able to
| mine and mint them well, but unfortunately it never became the
| thing.. Maybe one day, I get rich. For now, I just was able to
| buy a small apartment with my 3 BTCs..
| rambambram wrote:
| Nice read! But the gifs, man. I was reading on desktop and your
| paragraphs are too short to find a quiet place I could scroll to.
| lemonking wrote:
| Thanks for the feedback! This was my first blog post so I
| didn't really have a reference.
| rambambram wrote:
| No problem. I would love to read more about your stories.
| Have a blog somewhere? The gifs just really distracted from
| the interesting content. I think simple images from these
| gifs would do the job as well, or a short video - which can
| be smaller in filesize than gifs, I read somewhere - that I
| can pause.
| lemonking wrote:
| The link in this post is my blog, it's just that it's my
| only post so far. Probably gonna post non-crypto related
| stuff there too, but feel free to follow.
| bjt2n3904 wrote:
| Welfare promise: if we give people free money they will be more
| productive!
|
| And yet, here is someone who got free money, wasted their time
| chasing "get rich quick" fantasies, lived in obsessive misery
| like a gambling addict, stole utilities, and in the end, arrived
| at the same place they started.
| WarChortle wrote:
| This is nothing like welfare. Its really disingenuous to
| compare the two.
| humanistbot wrote:
| This was a student receiving a monthly stipend from the
| government for their living expenses, which is normal in many
| European countries.
|
| Wikipedia defines welfare as "a type of government support
| intended to ensure that members of a society can meet basic
| human needs such as food and shelter." That seems like a good
| definition to me, and this case definitely fits.
|
| Edit: In fact, there is a conservative anti-welfare narrative
| that this post plays right into. If the author was waiting
| until midnight for the deposit to post so they could buy
| drugs, alcohol, or some other 'vice', this would certainly be
| picked up by a conservative politician or media outlet and
| used to argue against welfare.
| WarChortle wrote:
| Sorry I read the first post in the wrong context, your
| right it was welfare.
|
| That being said, I do think that taking 1 persons
| experience and using that as an argument against welfare
| is, just dumb.
| 4ggr0 wrote:
| Is your argument that we should stop giving welfare to people,
| because not 100% of the people use it in the way you determine
| it to be useful?
| mustafabisic1 wrote:
| It ended a bit anit-climatically :( but a great story tho
| banannaise wrote:
| When there's a gold rush, the only ones really profiting are the
| ones selling shovels.
|
| Who won in the whole arms race? Hardware manufacturers, and
| people who could either run arbitrage or steal resources. (Which
| is which was often a matter of perspective.) Everyone else?
| Break-even or worse.
|
| What was actually built, for all that effort? Almost nothing.
| What did we gain as a society? The same.
|
| And I'm not sure that dollar-denominated financial markets are
| really any different.
| EVa5I7bHFq9mnYK wrote:
| First gold rush was in summer 2011, when GPU mining was invented,
| Bitcoin hit $17, first articles appeared in mass media, and
| Radeon 5XXX cards suddenly vanished from computer stores.
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