[HN Gopher] Bitcoin hashrate drops nearly 40% as deadly U.S. sto...
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Bitcoin hashrate drops nearly 40% as deadly U.S. storm unplugs
miners
Author : belltaco
Score : 137 points
Date : 2022-12-26 16:55 UTC (6 hours ago)
(HTM) web link (finance.yahoo.com)
(TXT) w3m dump (finance.yahoo.com)
| [deleted]
| lucb1e wrote:
| https://www.statista.com/statistics/881472/worldwide-bitcoin...
|
| 40% of latest value (November) would be 116x.4=46 TWh
| ("estimated") or 78x.4=31 TWh ("minimum"). USA uses 4223 TWh per
| year (Wikipedia "Electricity sector of the United States", 2018),
| so Bitcoin uses around 1% of the USA's electricity per year
| (1.09%, or 0.73% for the minimum value).
|
| The lower value is truly a minimum of minimum, as I understand
| it, because (1) not everyone will have been unplugged, and (2)
| the source "minimum TWh" value makes unlikely assumptions about
| the efficiency of every miner (latest equipment, no overhead).
|
| At "7.09 x 10-4 metric tons CO2/kWh" in the USA
| https://www.epa.gov/energy/greenhouse-gases-equivalencies-ca...
| (709 grams per kWh; 2019) this seems to come out between 22 and
| 32 million tonnes of CO2 per year, and iirc the average first-
| world person uses just over ten tons (ten thousand kilograms) per
| year so this is the equivalent of having an extra 2.2-3.2 million
| rich people on the planet (just the USA consumption, not
| Bitcoin's consumption elsewhere or other PoW currencies').
| epolanski wrote:
| To give it another way to visualize it: every 25 hours the US
| pollutes as much as burning an entire 50 car long train full of
| coal for Bitcoin mining alone.
| lucb1e wrote:
| Wow, that's one heck of a visualization indeed. Is that based
| on the CO2-equivalent amount of coal or based on the amount
| of coal actually used in the USA grid? (Not saying that the
| former is 'inactual' or whatever, just to understand what
| this figure means.)
| epolanski wrote:
| Equivalent.
| HN_is_for_gemes wrote:
| [flagged]
| dragontamer wrote:
| Perhaps it'd be more accurate to say "X BTUs of energy".
| BTU is the American unit of energy after all.
|
| And then say that "50 railroad cars of coal" is
| equivalent to X BTUs.
|
| I'm being pedantic. I think its well known that the US
| Grid is a complex mix of solar, nuclear, wind, and fossil
| fuels. It is also known that its mostly fossil fuels
| (natural gas, coal, and petrol), despite our best efforts
| to the contrary. So I think the visualization is pretty
| good. But a few additional words for clarity here would
| probably be better?
| tromp wrote:
| > as the hash rate rate drops, your individual profitability
| will rise
|
| This is not quite accurate. As the hash rate drops, the next
| difficulty adjustment will lower the difficulty, and that is
| what improves profitability. At a given difficulty, it doesn't
| matter how many other miners join, that just makes blocks
| arrive faster; it doesn't change the frequency at which a given
| miner hits the difficulty target, which is what determines
| their profitability.
|
| The last adjustment was around Dec 19 [1], and the next one is
| normally 2 weeks after, but with 3/5 of the former hashrate,
| blocks will arrive 5/3 slower, so it will take longer to adjust
| to a lower difficulty, in early to mid January.
|
| [1] https://bitinfocharts.com/comparison/bitcoin-
| difficulty.html...
| lucb1e wrote:
| Sorry, your reply coincided with my editing that out. I saw
| another comment in in this subthread
| https://news.ycombinator.com/item?id=34140409 that indeed
| pointed that out already and then edited my post just before
| you replied.
| lazide wrote:
| Eh, not quite. There is an important distinction here in how
| it actually works.
|
| The Bitcoin chain difficulty is essentially the number of
| random lottery tickets 'issued' for a given block (size of
| hash space hashes will be generated in).
|
| The first miner to get a winning lottery ticket wins the
| block rewards. (Each hash being a 'ticket'). The space is
| typically insanely large, think 10's of trillions.
|
| Sometimes that happens really fast, sometimes it takes a long
| time. The difficulty (number of tickets) adjusts at periodic
| intervals to keep the average winning frequency at around 5
| minutes based on the current quantity of hashing, but the
| actual win rate varies a lot.
|
| So cutting actual hash power in half (by taking half of
| miners off line) gives any single miner remaining twice the
| odds of getting a block reward. But it will likely take twice
| as long hashing, and the blocks will mine about half the
| speed of usual (think 10 mins avg instead of 5), unless the
| difficulty resets.
| trifurcate wrote:
| Not quite squared. The hashrate of the rest of the network
| does not directly matter to you. Only the difficulty
| matters. Without a difficulty readjustment, cutting actual
| hash power in half does not double your odds.
|
| Think of it like this: if the difficulty is such that there
| is 1 winning hash out of 1 million possible hashes
| (oversimplified), and if your hardware calculates 1,000
| hashes per second, then your odds of finding a winning hash
| in 1 second is 1/1,000. Notice how this odds calculation
| does not take as an input what the other miners are doing.
|
| Of course, after a difficulty readjustment, your odds will
| actually change; that is the entire purpose of the
| difficulty target.
|
| (This comment ignores block header propagation etc.
| affecting mining latency, which will change mining overhead
| slightly if block times double)
| lazide wrote:
| Not sure where you got squared from?
|
| If half the hash rate disappears, your odds do indeed
| double, as every hash anyone does has the same odds of
| success, and with has of your competition gone, you now
| have twice the odds of being the one that gets it. It's a
| (approximate to many decimal places) linear relationship.
|
| If you had 1% odds, you'd now have 2% odds in the 'half
| the hash power disappears' situation.
| tromp wrote:
| > you now have twice the odds of being the one that gets
| it
|
| This is not the right way to think about it. Someone else
| publishing a valid block doesn't deprive you of a reward.
| You just continue mining on top of their now latest
| block.
|
| When a miner's hash meets the difficulty target, they
| have a valid block that they publish, and will collect
| its reward (except in the unlikely case of another miner
| finding a valid block at almost exactly the same time).
| The amount of rewards a miner collects thus depends
| solely on how often their hashes meet the difficulty
| target, irrespective of the total hashrate.
| lazide wrote:
| Eh, we're saying similar things, but you're wrong in a
| fundamental detail - and you're making it really
| confusing for everyone who doesn't understand what is
| really going on.
|
| The rewards a miner collects do not depend solely on how
| often their hashes meet the difficulty target. Otherwise,
| every miner could keep mining prior blocks forever until
| they got a hash that matched, and collect the reward for
| that block. But that isn't allowed to happen.
|
| The first miner that gets a block accepted by the network
| with a valid hash wins. A block can only be mined once,
| by one miner. Otherwise, transactions would be double
| spent, or blocks double mined.
|
| Your individual odds of being that miner are directly
| proportional to the amount of hash power being used to
| mine the current, most recent block.
|
| The window of time you have (aka the 'time until the
| lottery drawing') is until someone finds a winning hash
| to the current block. When there is a conflict/split in
| the blockchain, the longest/highest chain of blocks wins,
| and everything on the 'split' chain gets ignored.
|
| The algorithm bitcoin uses to mine is a rather simple
| one.
|
| 1) Collect validated transactions
|
| 2) Add the block metadata, such as prior/highest current
| block (this is what makes it a block chain), this miners
| metadata (if any), and the block reward address if this
| block wins.
|
| 3) Add/Change the blocks random nonce
|
| 4) Construct a block by putting all these together into
| the binary format.
|
| 5) Hash it
|
| 6) If the produced output hash has the right number of
| zeros in it (really) to match the difficulty target, it
| is a winning block. Publish it, and if the network
| accepts and builds more blocks on top of it, you can
| spend your reward. Otherwise, go back to 3.
|
| The difficulty target is partitioning up the bitspace to
| determine the odds of 'winning' blocks, just like I'm
| describing using the lottery ticket analogy.
|
| There is no way any miner can change their odds here (or
| 'try to meet the difficulty target'), unless they collude
| with others to avoid already tried hashes/nonces for the
| same exact block values, which they have negative
| incentive to do.
|
| In fact, independent miners have every incentive to make
| their opponents try the things they already know won't
| work.
|
| Removing half the hash power would double the chances
| (all other things remaining the same) of the remaining
| hashers winning, as there is now half the number of
| competitors randomly trying to get a winning hash, as the
| winning hashes are randomly distributed.
|
| It also doubles the time to find a winning hash, all
| other things remaining the same, as there is now half the
| number of players trying random values. (or half the
| number of random attempts to find the right value).
|
| Unless someone has broken SHA-256, Every active miner has
| the same odds on any hash attempt to get the winning hash
| value.
|
| That means everyone has to try every value within that
| space. And they won't know what value they'll get from
| hashing until they do the actual hashing (aka do the
| work).
|
| That's pretty fundamental to the protocol.
|
| Increasing/changing difficulty targets isn't linear in
| impact, but that's not related to what is being discussed
| here, as the target itself isn't changing. Just available
| hashing power.
| trifurcate wrote:
| "Not quite squared", because the parent comment also
| started with "not quite".
|
| The sibling comment is exactly right. Your odds of mining
| a specific block are altered, but this doesn't mean much.
| If everyone else but you disappeared from the network,
| without a difficulty retarget, your odds of mining the
| next specific block are 100%. The rate at which you mine
| these blocks is exactly the same as the rate at which you
| mine blocks when you represent 1% or 0.1% of the network
| hashrate.
|
| Example: Fixed difficulty, so 1/1,000,000 hash wins,
| 1,000 hashes/sec.
|
| a) You are 100% of the network hashrate. Your odds of
| finding the next block are 100%. After 500 seconds of
| mining, your odds of having mined 1 block are 50%. After
| 500 seconds, the network will have produced on average
| 0.5 blocks (I know, awkward.)
|
| b) You are 1% of the network hashrate. Your odds of
| finding the next block are 1%. After 500 seconds of
| mining, your odds of having mined 1 block are 50%. After
| 500 seconds, the network will have produced on average 50
| blocks.
| lazide wrote:
| Nope, see reply to the sibling comment.
|
| If the OVERALL rate of exploration of the keyspace of
| valid hashes halves, the remaining half will take twice
| as long (on average) to find the winning value.
|
| Whoever finds a winning value first stops the contest.
|
| If I am 1% of the networks hashrate, and everyone but me
| disappears, my odds are indeed 100% of finding the next
| block - but that's not the right analogy here, because
| there is always someone else looking, and whoever is the
| first to find it wins.
|
| The time you could expect that to take, if all but 1% of
| the hashrate disappears, is going to be 100x of the time
| (on average) it would take with the original hashrate.
| Unless it takes so long the difficulty target reduces, of
| course, and the odds change.
|
| This is done infrequently to avoid someone gaming the
| system by kicking everyone else off to start being the
| sole miner with an economic amount of $$ spent.
|
| You got lost at your example b I think because you seem
| to think that the odds of any particular hash attempt
| being a win have something to do with current aggregate
| hashrate (which is what we're discussing changing), but
| it does not. It only changes the odds of it being a match
| IN TIME.
|
| With network hash rate being a rate (aka value over
| time), halving the value, doubles the time to completion
| on average.
|
| The odds of any specific hash being a win is set by the
| difficulty target, which is based on HISTORIC AVERAGE
| hash rate, and only adjusts infrequently. When that is
| adjusted, it changes the odds. But that is done
| independently of this whole 'suddenly half the network
| disappears' event.
| mlyle wrote:
| I think you guys are talking past each other.
|
| It doesn't matter what happens to the rest of the
| network--- you'll win the same number of blocks per year,
| whether you're the only miner or one of many miners.
| You'll win a greater proportion of blocks if there's
| fewer miners, but the same number overall.
|
| Only difficulty changing changes this.
| lazide wrote:
| That is the part that is false.
|
| You will not win the same number of blocks per year, and
| fundamentally can't, unless _you have the same share of
| the overall mining hashpower_ that entire time.
|
| Bitcoin literally could not work if that was not the
| case.
|
| If your share of the hash power doubles, because your
| total hashes stayed the same but the overall hash power
| halved, you'll 'win' twice as many blocks.
|
| Changing difficulty does not change this.
|
| Changing difficulty only changes how much hashpower is
| required (on average) to mine a block, and indirectly the
| number of blocks produced over over time, for a given
| hashpower.
|
| Difficulty changes the odds of any given hash attempt
| winning. It does not change the odds you will find a
| winning hash before anyone else does. That is based on
| your proportion of the overall hash rate.
|
| This is why there is such strong incentive to add more
| hashpower at lower per-hash price to mine Bitcoin.
| Because it increases individuals share of the overall
| hashrate, they end up mining more blocks, and they get
| more block rewards for it.
|
| Less efficient hashers get less and less share of winning
| blocks as this happens, until it becomes uneconomic for
| them to hash at all.
|
| If all miners dropped off (or 99%), blocks won't keep
| getting mined every 5 minutes. They'll take forever to
| mine until the network adjusts the difficulty, which
| takes awhile - 2016 blocks, to be precise.
|
| In fact, with a sufficiently high hash rate setting a
| high difficulty, then dropping to a sufficiently low hash
| rate right after a difficulty adjustment, it might never
| adjust back, and it could be years or decades to mine the
| next block.
| Anon1096 wrote:
| I don't have expertise in this, but wouldn't it be that
| your chance of mining a _specific_ block doubles? I don
| 't believe it would affect your overall profitability,
| because in the inverse case of the amount of miners
| doubling, if you lose out on a specific block, you can
| just start mining the next one instead, so on average it
| should be the same. And you don't lose out on work
| because of the high randomness of winning hashes.
| lazide wrote:
| With only one winning block (generally), yes your chance
| of mining the specific winning block doubles.
|
| There is no explicit co-ordination regarding blocks
| mined, and no hashes tried by other miners have any
| impact on you or your odds, except if they win, as there
| is no (known) co-ordination between (independent) miners
| on what has or has not been tried yet - any block which
| produces a valid next-in-chain value is the 'right' one,
| and every miner who gets a value which isn't the right
| one, got a wrong one.
| lettergram wrote:
| I'm going to go out on a limb and say I don't believe this. I
| simply don't believe anywhere near the figures people use for
| the energy used to mine Bitcoin.
|
| Drive down your street, look at all the businesses with their
| power on, all running computers. Every home running lights,
| fans, computers, video games, TVs, etc. then we have industrial
| manufacturing, etc.
|
| You mean to tell me there's some people in a warehouse around
| here with racks of servers running hashes? Just hashes, not a
| data center. We'd need hundreds of those warehouses to be 1% of
| the On-grid power. Sorry, I don't buy it.
| TomSwirly wrote:
| > I simply don't believe anywhere near the figures people use
| for the energy used to mine Bitcoin.
|
| Why do you think your belief, unsupported by any facts,
| sources or calculations, has any value?
|
| > Drive down your street,
|
| Can you explain why this is some sort of reasonable way to
| find data centers? Why would you expect these data centers to
| be on streets where people live?
| pengaru wrote:
| > You mean to tell me there's some people in a warehouse
| around here with racks of servers running hashes? Just
| hashes, not a data center
|
| When you can be profitable running a datacenter without even
| needing to find customers to pay for your services on actual
| servers, why _wouldn 't_ you just run miners instead?
|
| Clearly the incentive is there for this to be the reality.
| arcticbull wrote:
| The math is really easy.
|
| Take the network hash rate, the take the latest AntMiner S9's
| MH/J. Multiply it out. Weep.
|
| That's gonna be your best case too, btw, assuming nothing
| less efficient is on the network.
| crazygringo wrote:
| Then that's just willful ignorance, because you don't _have_
| to blindly "believe". You can calculate it yourself.
|
| It doesn't matter what you see driving down the street. There
| are widely available stats on how much energy mining takes
| (based on GPU energy usage, nobody's lying about this, you
| can run an energy meter yourself) and how much mining is done
| (verifiable with actual Bitcoin stats, this can't be
| falsified).
|
| And obviously the warehouses aren't evenly distributed.
| They're concentrated where costs are cheapest (mainly energy
| costs).
| dragonwriter wrote:
| > There are widely available stats on how much energy
| mining takes (based on GPU energy usage, nobody's lying
| about this, you can run an energy meter yourself)
|
| What does GPU energy usage have to do with Bitcoin? Isn't
| it predominantly mined by ASICs? (Though GPU and even CPU
| is possible, but uneconomical unless someone else is paying
| the bill...)
| zekrioca wrote:
| And what do you think all these Ads from all sorts of
| websites on the web and compromised "free wifi hotspots"
| do with the javascript runtime in your browser?
| fbdab103 wrote:
| GPU energy gives you an order of magnitude estimate using
| consumer hardware. These numbers are well publicized and
| hard to manipulate. From there you can offer a fudge
| factor (eg ASICs are X% more efficient) and there you go.
| Alternatively, you could find some posted stats on ASIC
| hardware, that should get you to a more robust number,
| but relies upon using what I consider to be more dodgy
| sources (someone selling ASICs or someone trying to claim
| higher/lower energy usage)
| ineedasername wrote:
| The math really isn't complicated here. If your gut feeling
| differs than that's on you & your mathematical competence to
| evaluate independently.
|
| But I'll get you started: The estimate I find from various
| publications, both crypto friendly & otherwise, estimate
| around 1,500 kwh/bitcoin. Multiple out from there to the ~40%
| network hashrate capacity in the US and divide by total US
| kwh output.
|
| Alternatively you can find a bitcoin profit calculator of
| choice and use its inputs to work backward.
|
| Buy it or not. Your gut feeling doesn't have to correspond to
| the math, and I'm mostly okay with your gut being wrong
| (unless you're in a position to make policy decisions or
| something. Doubtful though...)
| pclmulqdq wrote:
| There are thousands of those warehouses, but they are
| concentrated in areas where power is really cheap.
| lucb1e wrote:
| That's fine, please run the math again then. (Edit: I did not
| downvote, it's a legitimate question /edit)
|
| I've done it myself also in the past because, like you, I
| couldn't believe it either (this was around 2018 I'd guess).
|
| It's a fairly simple calculation to take an energy-efficient
| graphics card and see how many SHA2 hashes per second you can
| get from that, see its energy consumption (ignore the rest of
| the computer and connectivity to support the GPU for now),
| multiply that with the hash rate, et voila you get some
| ridiculous number (don't remember, but something like half
| the world's energy consumption). This indicates that all
| Bitcoin miners are using ASICs. Now the question becomes how
| efficient a Bitcoin ASIC is, and when you hunt for that
| number and plug that in, the result is in the same range as
| what the news has been saying.
|
| Edit: if you want to take a shortcut and use a readymade
| hashes per gigajoule value from last summer, see figure 1
| here https://ccaf.io/cbeci/index/methodology </edit>
|
| It also roughly works out when you look at kWh costs versus
| Bitcoin profit per consumed kWh, so the figure is not
| unreasonable. People would be leaving money on the table if
| their real electricity consumption were lower, because then
| they could add more equipment and make greater profits.
| Everything points towards this unbelievable waste to be real,
| unfortunately.
| FormerBandmate wrote:
| I know people who have worked with investors to buy up entire
| power plants to do this. It definitely happens
| msk-lywenn wrote:
| Took me less than a minute to find an article showing one of
| those farms and it dates 2014. So yeah, today, it wouldn't be
| a surprise if there were thousands.
| https://www.nwnewsnetwork.org/economy-business-finance-
| and-l...
| shrubby wrote:
| Nice comparison.
|
| IMO average should be ditched and median used instead for
| personal emissions for a country. Even in reasonably low
| inequality OECD countries the difference between average and
| median is substantial as a low percentage of people drive the
| average high.
| lucb1e wrote:
| Good point; I agree but I don't have this figure handy. The
| "this many persons" was more of a fun aside, though. The main
| thing to know is that it's 1% of electricity in the USA as
| well as a big impact on the world's CO2 budget.
| shrubby wrote:
| Oxfam Extreme Carbon Inequality had something like 16 ton
| average and 8 ton median for the US. Here in Finland it's
| around 7 and 11 but we're one of the most equal countries
| but still the difference is big.
|
| I'm too tired to look up the sources but OECD ones can be
| found from the stated report though a few years old by now.
| hippich wrote:
| Since difficulty recalculation is based on number of blocks, not
| time, would a scenario be possible where hashing power keeps
| crashing constantly pushing block difficulty recalculation in the
| future and essentially freezing transactions on the network?
| wmf wrote:
| I don't think there's any kind of feedback loop where a drop in
| hashrate would cause further drops. Even if hashrate dropped
| 90% then you'd have to wait 20 weeks for difficulty to adjust
| but the network would still function somewhat.
| jiggawatts wrote:
| I did a back-of-envelope calculation that it _is_ possible
| for BitCoin to get into this kind of death spiral, but it 's
| not very likely.
|
| In the hypothetical scenario that the mining rate drops to
| just tens of percents of the original, then the _utility_ of
| BitCoin drops because transactions get both slower and more
| expensive.
|
| This could cause a "run on the bank" where people try to get
| their money out, but can't transact on the network. If the
| next hash rate change is far enough out and a panic sets in
| long enough, then BitCoin's value could plummet as users lose
| all confidence.
|
| This _can_ recover, but if it 's juuust bad enough to take
| out _more_ miners via bankruptcy after the next hash rate
| adjustment, then it can sustain itself.
|
| Miners have fiat expenses and BitCoin revenue.
|
| If BitCoin drops too fast, they _have_ to cease operations,
| otherwise they 're literally burning piles of valuable
| currency to make worthless monopoly money they can't spend on
| anything.
|
| It all depends on how long the big miners can "hold out"
| while being unprofitable, or more importantly.. how long
| they're _willing_ to risk losing everything they 've made
| until then.
| kragen wrote:
| probably the big miners convert their bitcoin to fiat or
| stablecoins quickly after earning them?
| wmf wrote:
| They should but then they started hodling as the price
| dropped, putting them in a bind that is leading to
| bankruptcy.
| kragen wrote:
| i'm guessing that behavior isn't universal
| kragen wrote:
| the doomsday scenario is that the hashrate drop outpaces
| difficulty adjustment, because as you point out there's a
| rate limit on the difficulty adjustment; possibly in those 20
| weeks the hashrate would drop another 90% because it isn't
| profitable to run the miners during those 20 weeks at the
| still high difficulty but much lower bitcoin price
|
| after two or three orders of magnitude drop in the hashrate
| 51% attacks would be quite affordable
| amluto wrote:
| I would argue that they're already quite affordable in a
| marginal sense -- the marginal cost in power to supply 51%
| of the hash rate for long enough to attack the network is
| not terribly high.
|
| These attacks are not affordable in a _capital_ sense when
| the miners are running near capacity. There isn't an AWS
| with unlimited piles of hashing ASICS that you can rent for
| the hour at a reasonable price. You need to buy or lease
| these things, Ave capacity is finite.
|
| But I suspect that, if mining profitability per hash drops
| enough, then the capital limitation on attacks will go
| away.
| maxbond wrote:
| Purely speculating, but there could be a feedback loop if
| people observed the hash rate plummeting, lost faith in the
| network's functioning, and selling en masse. The plummetting
| price would impact the profitability of miners, who might
| start pulling capacity from the network, confirming people's
| fears and encouraging more selling pressure.
| cozzyd wrote:
| Those poor miners without their primary source of heat.
| [deleted]
| [deleted]
| MuffinFlavored wrote:
| > The Bitcoin network hashrate has dropped by more than 38.8%
| from its peak on Wednesday, as many U.S.-based miners have been
| forced to switch down their facilities due to deadly blizzards
|
| Is there any kind of geographical map that shows in which
| states/cities these hashrates are? I guess there probably isn't
| good correlation between hashrate + external IP?
|
| I wonder how profitable mining Bitcoin is these days at any
| scale.
| latchkey wrote:
| > _I wonder how profitable mining Bitcoin is these days at any
| scale._
|
| It boils down to a function of Capex and Opex.
|
| Today though it is a bit more complicated. Given that the
| bitcoin price goes in cycles, it is less about the current
| profitability and more about the ability to weather bear
| cycles. Miners now will hold as much as possible and then take
| profits when the prices go up again. Sometimes, they borrow
| against their existing holdings to buy more hardware.
|
| During bear cycles it is far more risky to setup a new mining
| operation, especially when presented with the ability to just
| market buy BTC in large enough quantities to not affect price.
|
| To answer your question though, it makes almost no sense to
| start a mining operation these days. You're competing with much
| larger players who have much deeper pockets. If you're doing
| just a small operation, the difficulty adjustments will hurt
| you more than a larger player who's lighting up thousands of
| machines at a time.
| lottin wrote:
| Imagine if copper miners held on to copper in the hope that
| it will go up in price. Taking a risk that is both
| unnecessary and unrelated to your business is stupid. That's
| the opposite of what a well-run business does.
| nikanj wrote:
| At least bitcoins are absolutely useless, so a bitcoin
| shortage doesn't affect anything
| latchkey wrote:
| Copper miners control production output [0], which defines
| the price. Bitcoin miners don't directly control
| production. They'd need to fork and get 51%+ to follow that
| fork.
|
| [0] https://seekingalpha.com/article/4546309-ivanhoe-mines-
| upsid...
| [deleted]
| fbdab103 wrote:
| You mean like OPEC does on a fairly regular basis?
| britneybitch wrote:
| That behavior is more common across industries than you
| might think.
|
| One example: https://markets.businessinsider.com/news/commo
| dities/natural...
| sgjohnson wrote:
| > I guess there probably isn't good correlation between
| hashrate + external IP?
|
| Probably not, since you don't even need to be online at all to
| mine bitcoin.
| MuffinFlavored wrote:
| > I'm no expert, but mining is just your computer taking the
| last valid block and trying to make a new one based on it by
| guessing a solution over and over.
|
| > Every 10 minutes or so, some miner on the network guesses
| correctly, and their block becomes the new one that everyone
| uses for their guessing.
|
| > If your miner isn't on the network, it'll never be told
| that some other miner guessed correctly and that everyone
| else on the network is now working on a newer block. Your
| miner will keep on guessing, but if it does eventually guess
| correctly, it won't matter as the network has moved on.
|
| https://www.reddit.com/r/Bitcoin/comments/sjfds/why_am_i_abl.
| ..
|
| Seems kind of inefficient?
| hanklazard wrote:
| What? A miner needs to be connected to the network to
| actively mine blocks.
| Ekaros wrote:
| How do you get transactions if you are air gapped?
| lucb1e wrote:
| Or even if you don't care about recent transactions, at
| minimum you'll need to either own >50% of the hash rate and
| just make your own chain (good luck) or be online every
| couple minutes to find the longest chain's block hash
| value.
|
| You don't need fiber internet but just a DSL modem with
| most-of-the-time connectivity to do mining for contributing
| to the network's safety, but doing it offline altogether
| indeed does not really make sense. (If you're doing it for
| the moneys then you probably do want to get information
| early (stable, low latency internet) so that you don't
| waste hash cycles.)
| tommek4077 wrote:
| The coin is transfered to your public key. This is saved in
| the public blockchain. Air gap means here, that you store
| your private keys on a device without internet.
| lucb1e wrote:
| That's one way of using the word air gap, but probably
| not what they meant.
| lucb1e wrote:
| > Is there any kind of geographical map that shows in which
| states/cities these hashrates are?
|
| https://ccaf.io/cbeci/mining_map
|
| I didn't know this existed but randomly saw it in the website's
| menu while researching another comment. It even drills down to
| state level in the USA and province level in China if you click
| the button at the top of the map. Georgia is popular in the
| USA, anyone know why?
| htag wrote:
| > I wonder how profitable mining Bitcoin is these days at any
| scale.
|
| They have calculators for this [0]. The summary is that
| assuming mining difficulty, electricity rate, and bitcoin value
| hold constant it's a 10+ year return on the most energy
| efficient miners, so you're probably better off buying bonds.
| If you don't have access to very cheap electricity ($0.06/kwh
| or cheaper) and don't have an efficient way of handling waste
| heat then it's a non-starter. Even then the price of bitcoin
| and the mining difficulty are likely to move considerably in 10
| years so it's a very risky business plan.
|
| [0] https://www.coinwarz.com/mining/bitcoin/calculator?hs=80
| MuffinFlavored wrote:
| I was aware of the calculators but I was more interested for
| example like
|
| what does one large mining operation (one large enough that
| when it goes offline during a blizzard, it's a mention-worthy
| part of that 40% hash rate drop figure) look like in terms of
| the calculator variables?
|
| How many of what piece of equipment do they have, are they
| getting electricity for $0.06/kwh or less like you said, how
| are they handling the waste heat?
|
| I wasn't aware we had huge mining farms in America to be
| honest. I thought it was mainly other countries. I'm also not
| super knowledgeable/in the know about this kind of stuff so,
| might just be accidental ignorance on my part.
| htag wrote:
| 1. USA has pretty cheap electricity globally. I'm not
| surprised to see lots of mining here.
|
| 2. The blizzard probably took multiple mining operations
| offline. Large parts of the US are experiencing very cold
| conditions.
|
| 3. Maybe Rockland, TX has the most PR about currently
| operating large miners in the US. I think they have a
| contract for ~$0.03/kwh and purchase hundreds of megawatts
| [0]. It's tens of thousands of miners.
|
| [0] https://www.wired.com/story/hard-luck-texas-town-bet-
| bitcoin...
| MuffinFlavored wrote:
| How much money does one of these operations roughly make
| and what was the startup cost?
| JumpCrisscross wrote:
| > _How much money does one of these operations roughly
| make and what was the startup cost?_
|
| Riot Blockchain (RIOT) [1], Marathon Digital (MARA), HIVE
| Blockchain Technologies (HUBTF) and Hut 8 Mining Corp
| (HUTMF) have public financials [2].
|
| [1] https://www.sec.gov/Archives/edgar/data/1167419/00010
| 7997321...
|
| [2] https://marketrealist.com/p/publicly-traded-bitcoin-
| mining-c...
| fbdab103 wrote:
| Fascinating find. Not a financials guy, but my quick look
| at the RIOT filing says they are operating at a loss for
| the 2020 year. Bitcoin price has seen a significant drop
| since then, which would compound their losses.
| tmpburning wrote:
| https://poweroutage.us/
| yunohn wrote:
| This is exactly why crypto is the opposite of disaster resistant.
|
| I fail to understand how people expect to use crypto when stuck
| in a dangerous situation or in the middle of natural/political
| turmoil.
| everfree wrote:
| Hash rate dropping by 40% doesn't affect the usability of
| Bitcoin in any way.
|
| There was a disaster, and Bitcoin resisted it. How does that
| make it the opposite of disaster-resistant?
| ineedasername wrote:
| The 10min/block rate-- and subsequent trasactions-- would
| suddenly take a lot longer under hash difficulty decreases in
| response. Until then, roughly 40% increase in time to mined
| block & corresponding decrease in transaction rate, probably
| an increase in fees to get your transaction included. These
| are in fact usability issues.
| everfree wrote:
| > would suddenly take a lot longer
|
| After a 40% hash rate drop, transaction inclusion would
| take 66% longer on average (1/0.60). So, it would increase
| from an average of 10 minutes (and potentially up to 40
| minutes) to an average of 17 minutes (and potentially up to
| 50 minutes).
|
| I can't imagine any kind of transaction where 10-50 minutes
| is timely and acceptable, yet 17-67 minutes is unacceptably
| long. Either 10-50 minutes is already too
| long/unpredictable, or an increase to 17-67 minutes does
| not make any difference.
|
| > probably an increase in fees
|
| Bitcoin's fees did not spike significantly during the one
| hour between 17:00 and 18:00 UTC.
| [deleted]
| _fizz_buzz_ wrote:
| It seems it has already recovered:
| https://cointelegraph.com/news/bitcoin-hashrate-recovers-aft...
| ineedasername wrote:
| Does this mean the mining has suddenly become easier & more
| profitable w/ lower difficulty rates for the remaining 60%
| capacity to keep it 1 block/10 minutes?
| wmf wrote:
| No, because difficulty only adjusts every two weeks.
| dwaltrip wrote:
| Does anyone know if there are good reasons for not adjusting
| the difficulty more often?
| ineedasername wrote:
| So a sudden 40% loss in hashrate could substantially impact &
| lengthen the 10min/block rate, unless there's quite a bit of
| excess capacity (equivalent to 40%) that could be brought
| online in response.
| lucb1e wrote:
| You have to spend 40% more time before someone finds a valid
| hash, but any miner is 40% more likely to be the one to find
| a valid hash... sounds like that should cancel out indeed but
| I'm not entirely sure.
| jallen_dot_dev wrote:
| You (as an individual miner) would still mine the same
| number of blocks on average as before, nothing has changed
| from your perspective (difficulty/hashrate). You would find
| a larger percent of all blocks mined, but same absolute
| number of blocks.
| modeless wrote:
| Wow, I had no idea that much hashrate was in the US now. A much
| better situation than when it was in China, IMO.
| Jensson wrote:
| Not good for Americans though since their electricity gets more
| expensive.
| walkhour wrote:
| Sure but we need numbers, how much more expensive is it, is
| it 1%, 10% or 100%. Because just saying "more" is compatible
| with the energy being 0.000001% more expensive. So your
| comment in not really saying anything.
| ajkjk wrote:
| Defensive much? It's more, and probably by more than 10^-9,
| and the point is allowed to be posted even if it doesn't
| include exact numbers.
| fabianfabian wrote:
| Numbers please, because it seems you haven't considered
| the possibility of it being cheaper.
|
| The practice known as curtailment, is a way for miners to
| help electricity grids. The miners' steady demand ensures
| power producers are bringing in revenue to offset costs,
| but can power off when demand from other sources is high,
| such as during winter storms.
| onlyrealcuzzo wrote:
| Proof works both ways.
|
| Show me empirical evidence what you described is actually
| happening on a large scale.
| sdenton4 wrote:
| I could believe that the energy saved in curtailment
| could power all of the remittances which Bitcoin so
| helpfully enables.
| latchkey wrote:
| It depends. The inexpensive power is usually taken up by data
| centers and is located in areas where the power would be too
| expensive to send to other locations. For example, Quincy, WA
| and Massena, NY.
| [deleted]
| throwaway0x7E6 wrote:
| I really doubt _bitcoin_ mining farms use power from the
| grid, that 's simply not viable. they can only operate with
| near zero electricity prices.
| ineedasername wrote:
| Your doubt on viability is misplaced. A variety of ASIC
| miners are profitable with kwh prices are high are
| $0.12/kwh. The average electricity price in the US is less
| then this, with as low as about $0.08 in some locations.
| [1]
|
| Small/medium mining operators just build in those cheapest
| locations.
|
| The largest operations are turning towards purchasing or
| building their own capacity, some of which activity will
| still contribute to a supply/demand curve that raises
| prices for the entire country (or at least region). In some
| cases large mining companies have even recommissions old
| coal power plants, e.g., Marathon Digital Holdings w/ the
| Harding plant.
| JCharante wrote:
| Not if it's priced appropriately.
|
| Some countries have different prices for residential areas vs
| businesses vs industry.
|
| For residential areas they might do something like first 10
| kWh = $0.01/kWh, next 20 kWh = $0.02/kWh, etc. This punishes
| people who use excessive amounts and helps keep electricity
| affordable for people living in poverty.
|
| It's the US's fault for not implementing something like that
| (and I'm one of the people living in it).
| latchkey wrote:
| It is a misnomer that it matters where the hashrate is on the
| planet. What matters is the amount of control any single entity
| has.
|
| Even in China, it was individuals setting up mining rigs, not
| some giant government conspiracy to control all the hashrate.
| wmf wrote:
| The argument was that the government _could_ have controlled
| the miners if they wanted to. They never exercised that power
| (except to eventually ban mining) but it was there.
| latchkey wrote:
| Exactly, it is more efficient to just ban it.
|
| Even in China, I don't think they can just declare eminent
| domain over someone's business, but they can certainly
| control who gets power generated for them.
|
| On top of it, if you've ever run a large scale mining
| operation (and I've run several), it isn't easy. There is a
| lot of competence required to do it profitably.
| JumpCrisscross wrote:
| > _in China, I don 't think they can just declare eminent
| domain over someone's business_
|
| Beijing can absolutely just seize a business.
| Disappearing leadership [1], installing Party Board
| members [2], promoting Party management members (a
| requirement for any business of consequence [3]) and
| simply taking assets are commonplace in China.
|
| Eminent domain doesn't really exist because the legal
| system is subservient to the Party [4]. If the CCP wants
| something, it takes it; it doesn't need court permission.
|
| [1] https://www.ft.com/content/2f7c7a10-2df3-4f1b-8d2a-ee
| a0e0548...
|
| [2] https://thediplomat.com/2019/12/politics-in-the-
| boardroom-th...
|
| [3] https://amp.theguardian.com/world/2019/jul/25/china-
| business...
|
| [4] https://www.hrw.org/report/2008/04/28/walking-thin-
| ice/contr...
| latchkey wrote:
| It isn't one business though, it is/was ~40% of the
| hashrate, spread across the entire country, run by who
| knows how many operations. We're talking about tens of
| thousands of computers and hundreds of megawatts of
| power.
|
| It is one thing to take it over and shut it down, but a
| whole another thing to keep it running. It isn't like the
| people running it will just suddenly want to work for a
| new (hostile) boss. Like I said before, this stuff isn't
| trivial to run. You don't just plug a box in and call it
| good.
| JumpCrisscross wrote:
| > _isn 't like the people running it will just suddenly
| want to work for a new (hostile) boss_
|
| Have you ever done business in China? _Everyone_ already
| works for that boss.
|
| The boss may not be as present yet, but they're there,
| and refusing to follow a Party member's orders is a
| criminal offense.
| latchkey wrote:
| Indirectly, yes. One of my large mining operations was
| based in Vietnam and we used equipment sourced directly
| from China due to our partnership with a very large
| crypto company there, with a two letter domain name.
|
| You're taking one talking point out of the conversation
| and then trying to apply that as a whole. The larger
| picture here is that what you are replying to isn't the
| point of what I'm talking about, but it sure makes you
| sound like you know what you're talking about though.
|
| The fact is that the govt would likely never take over
| every single mining operation, when the lowest barrier is
| to simply ban it. That's exactly what happened.
|
| They don't need Bitcoin, when they have their own
| infinite money printer. Even if they didn't ban it, and
| still took it all over, they wouldn't have enough
| hashrate to control the network (~40 < ~51). If they
| somehow invested even more funds into this massive
| operation to control more hashrate, what could they do?
| At most, reorg a few blocks and effectively destroy
| bitcoin. It would be a very expensive suicide, for what
| purpose?
| JumpCrisscross wrote:
| > _the govt would likely never take over every single
| mining operation, when the lowest barrier is to simply
| ban it. That 's exactly what happened._
|
| Totally agree. I was contesting the narrow point of the
| government not being able to seize those operations. They
| could have. But they aren't idiots, those rigs are
| strategically worthless because Bitcoin is strategically
| worthless.
| nathias wrote:
| your use of misnomer is a misnomer
| latchkey wrote:
| what would be a better word to use?
| sowbug wrote:
| The "nom" is your clue that the word has do to with names
| or labels. Nominally (in name only), denomination (the
| label giving the value), nominate (to be named to a
| position), etc. I think even "number" (a label for a
| quantity) and "name" come from the same root.
|
| It follows that a misnomer is a "bad name," usually
| stemming from a misunderstanding about an origin. E.g., a
| firefly isn't a fly, a peanut isn't a nut, a starfish
| isn't a fish, a shooting star isn't a star, etc.
| modeless wrote:
| "Fallacy" or "misconception" would be closer to what you
| meant.
| [deleted]
| anaganisk wrote:
| Of course, it is much better than one country known as meddling
| with other govts compared to another country that meddles with
| other governments.
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