Wouldn’t it be easier if a bunch of people paid a dollar every second, and one of those people was randomly selected to get every dollar submitted?
Comment on Bitcoin mining is no longer profitable
hperrin@lemmy.ca 3 weeks ago
By design, it’s supposed to be barely profitable, so it makes sense it would cross that boundary once in a while. Then some miners stop, the difficulty is adjusted automatically, and it becomes profitable again. It’s actually a pretty interesting strategy.
Basically the difficulty depends on how many miners there are on the network. More miners = more difficult. Fewer miners = less difficult. The “difficulty” is just how “lucky” you have to be to hit a successful hash on a block. The block’s hash is based on the previous block + all the transactions you include in your block + a random number you add. If the hash ends in a certain number of zeroes, you have a successful block you can add to the chain, and you’re rewarded with some brand new coin in your wallet (you include that in the transactions in your block).
The amount of new coin constantly goes down as the chain gets longer, until it hits zero and mining doesn’t create new coin. Then, you would charge a fee for including someone’s transaction (a lot of miners already charge a fee). The more zeroes required at the end of the hash, the “harder” it is to mine. The network automatically adjusts how many zeroes are required to keep new blocks being added at a roughly constant rate.
So, fewer miners would mean blocks are being added too slowly at the current difficulty, and the network adjusts to make it easier to hit a successful hash.
Oka@sopuli.xyz 3 weeks ago
FiskFisk33@startrek.website 3 weeks ago
it would, but the act of giving a dollar doesn’t double as a way to validate transactions
humanspiral@lemmy.ca 3 weeks ago
Also a clue from one of the links is that “German industrial rate customers, cost is $200k/btc”. Their industrial rate is $0.25/kwh, and so then their claim is based on 12c/kwh utility rates. Utility rates has pretty much always been cost prohibitive. Wholesales and behind the meter power is certainly an advantage large scale mining uses.
Hirom@beehaw.org 3 weeks ago
Thanks for the refresher. I’m aware of the basics, but assumed the difficulty measured by the number of zeros could only increase. Apparently difficulty can decrease, and I’ve read it’s expected to decrease very soon to keep the system running a while longer.
Bitcoin’s creator was smart enough to design a system that automatically adjust to remain profitable for several years without intervention, but not smart enough to foresee social and environmental costs.
It’s a good example that illustrate why automated systems shouldn’t be left running unsupervised, even if it’s designed by the best of minds with the best of intentions.
The_Caretaker@lemm.ee 3 weeks ago
There are other methods of operating a blockchain, besides proof of work, which are much more energy efficient. Think of Bitcoin being like a coal fired power-plant and some other cryptos based on proof of stake being akin to solar panels.
Swedneck@discuss.tchncs.de 3 weeks ago
but also proof of stake is just taking off the mask and outright saying that rich people control the network
locuester@lemmy.zip 3 weeks ago
The network is constantly supervised and mining is a competitive business. The network was built to adjust, and is working precisely as intended.
Hirom@beehaw.org 3 weeks ago
Then why doesn’t it adjust to avoid negative social and environmental effects? My guess is that it’s because it’s not possible to adjust bitcoin’s algorithm, and that miners don’t have enough intensive to abandon bitcoin for something less destructive.
My understanding is that bitcoin’s core algorithm, which include the difficulty and consensus logic, cannot modified nor fixed in any way.
A hard fork is possible, which means leaving the bitcoin network and setting up an alternative (hopefully better) network with different result.
locuester@lemmy.zip 3 weeks ago
lol it can’t adjust on public approval. It’s software that runs. It’s valuable. If it wasn’t, people wouldn’t run it.
It can hard fork with a consensus mechanism change anytime someone writes one and people decide it’s the best path forward. Ethereum decided this and did this.
That’s not happening with Bitcoin because those that understand how it works agree it’s the best system to use.
I use Bitcoin as a store of value, and Solana for day to day stuff and financial investments like lending and liq providing. That’s my preference, for now. It’s a very fluid industry, nothing is set in stone, although Bitcoin appears to be pretty solidly the preferred secure store of value.