
Bitcoin price crash forces miners off network - sanefive
https://decrypt.co/22538/chinese-miners-hash-halving-coronavirus
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exabrial
Thank goodness. This waste of electricity and natural resources needs to go
away.

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Barrin92
it was always funny that people with a prepper mentality touted bitcoin as
some sort of rock stable currency in times of crisis when government money was
going to be worthless despite the fact that it basically takes an electricity
source the size of the country to keep the whole thing running.

What are you going to do in the post apocalypse, get a team of people with an
abacus to calculate hash functions?

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behringer
I would expect bitcoin to work properly with as few as 3 people... And any
computer can calculate hashes.

~~~
v64
This is a point I see a lot of people miss about Bitcoin's power consumption.
It doesn't have to use as much electricity as it does, as the difficulty is
adjusted to mining capacity.

The reason why so much electricity is being used on BTC is a result of an arms
race between miners, not a necessity of the technical specification. Bitcoin
would still operate correctly with less mining capacity. What is sacrificed is
that the threshold for mounting a 51% attack becomes lower with less miners.
But again, the network itself does not need a nation-state's worth of
electricity to operate.

~~~
creato
How quickly would the difficulty adjust? My understanding is that there is an
algorithm that slowly adjusts difficulty. If a big chunk of the ASIC miners
went offline and mining reverted to individual GPUs, it might be a very long
time before the difficulty reverted to something reasonable.

~~~
tromp
Bitcoin difficulty adjusts every 2016 blocks, nominally 2 weeks. Each time it
can adjust by a factor of at most 4 (in either direction). Many other
cryptocurrencies adjust difficulty every single block.

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Melting_Harps
If this is true, which I welcome because Chinese miner centralization has been
a massive worry for us since about 2012, that still has yielded they highest
hash rate (the computing power dedicated to mining Bitcoin) in the History of
BTC:

[https://bitinfocharts.com/comparison/bitcoin-
hashrate.html](https://bitinfocharts.com/comparison/bitcoin-hashrate.html)

Its easy to skew this if you don't understand the underlying tech, but Bitcoin
continues to work despite a supposed exodus of miners (best example being the
last fork with BCash), what secures the network are the nodes, not miners.
They're just participants who are rewarded for appropriating the network with
hashing power.

As for the price dip, well I welcome anyone to buy $100 of BTC and hold onto a
$100 and see which is more valuable now that the Federal Reserve has dropped
Interest rates to 0%, and is issuing a $700 Billion QE program:

[https://www.cnbc.com/2020/03/15/federal-reserve-cuts-
rates-t...](https://www.cnbc.com/2020/03/15/federal-reserve-cuts-rates-to-
zero-and-launches-massive-700-billion-quantitative-easing-program.html)

> They should never be there anyway, Bitcoin is a waste of time.

Personally, this couldn't have come at a worst time for me as I stepped down
from my day job to undergo my SpaceX interview(s), I've turned down some
gig/jobs in the last month too, but I'm glad that I have BTC as a cushion with
some cash on hand.

~~~
iamaelephant
Bitcoin is fundamentally not a cash alternative. Which means definitionally
the alternative to holding onto $100 BTC is NOT holding onto $100 cash. In
fact cash is intentionally inflationary and BTC is intentionally deflationary
(over long enough time scales) so yeah, you'd win your silly bet if there's no
major crash. Doesn't mean you'll come out ahead of other strategies.

~~~
raiyu
The problem with bitcoin is specifically that it is deflationary. In over
simplified macro economic terms when you have deflation it is in the consumers
interest to not spend money, because the cost of a service or good will be
lower in the future. So the longer you wait the more you save.

You have the same issue with Bitcoin, because it is deflationary it is in the
holder's interest to not spend it, because it's future buying power will be
increased.

So if you look at how bitcoin was distributed you have early holders that have
a tremendous amount and have been rewarded for it.

Add to that speculation and you have this whole cycle ramped up on steroids,
with huge swings up, and then down, and all the while the value continues to
increase because it is designed to do so.

The problem was that bitcoin tried to solve two problems, but should have only
solved one.

The first problem was how to transfer value in an untrusted network which was
a great success.

The second, was unneeded, which is to make it deflationary as some sort of
perhaps response to the inflationary world we live in.

But the reality is that the inflationary world was designed by economists so
that wealth continues to circulate. Yes, there are still issues. Yes we have
imbalance. But inflation does case wealth to circulate, though not as quickly
as some would hope for.

In bitcoin, you have the exact opposite, wealth gets accrued to early backers
and just sits there.

~~~
toohotatopic
There is hidden inflation that comes from other crypto currencies.

Once Bitcoin inflation is too strong and people are not willing to sell, it
becomes profitable to start another currency. That currency will absorb
liquidity and the deflation of BC stops. Like information in the internet,
value flows around obstacles.

~~~
toohotatopic
edit: Once Bitcoin _deflation_ is too strong ...

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aeturnum
Curious about the network's capacity to respond to a downward trend in hash
power (which doesn't seem inevitable, but possible).

Does the difficulty factor of new blocks get dropped in response to losing
hash power? Is the fee / mining reward balance predictable? Does the network
become non-functional for xfers below a certain value at some point?

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Nursie
Yes, the difficulty rebalances periodically (every two weeks, roughly?), it
would take a catastrophic decrease in hashing power to affect that by too
much.

The mining reward stays the same, though it drops by half every few years (one
such drop is approaching in May).

The network actually becomes non-functional for low transfers the other way -
when there's too much interest, and too many transactions, the fees to get a
transaction through start to rocket. At the peak of the 2017 hype the y hit
around $50-70, IIRC.

~~~
foepys
It balances after 2016 blocks, not 2 weeks. This is a crucial difference
because when the hash rate drops dramatically, those 2016 blocks might take 4
or even more weeks to create.

~~~
Nursie
Yes, it could. There is a hypothetical "stuck network" situation, but that
really is dependent on a lot of network power disappearing. Before that you'd
end up with a lot of idle hash power and ex-miners wondering what they could
achieve in the way of an attack with it...

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Animats
Bitcoin is volatile. No surprise there.

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atleta
Last week a FB friend discusses with his connections the winning investment
strategy wrt the virus. They agreed that BTC (besides gold) is a safe heaven.
It was @ $8k back then (now it's $5k).

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pontifier
In my opinion, for-profit bitcoin mining is detrimental to the ecosystem.
Prices should fall to unprofitable levels,so network hash power is more
distributed among smaller groups.

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jraedisch
The already existing mining hardware would make attacks easier and more
probable, especially considering actors able and willing to operate at a loss.

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timcc50
They should never be there anyway, Bitcoin is a waste of time.

~~~
HenryBemis
It's not waste of time. I think if helped progress in the hardware. It
educated people on blockchain. Now there may be rigs our there for sale, which
can be reused for more important things, scientific research, etc.

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Traster
I think it's time that the government started to consider stepping in a
providing support to these out of work ASICs.

~~~
yjftsjthsd-h
In the interest of hijacking this into a productive discussion: Does anyone
know if it's possible to use BTC ASICs for anything else? It's just a lot of
sha256 hardware, right? Can we use it for arbitrary checksumming?

~~~
RL_Quine
Absolutely not. They’re application specific as the name implies. They can not
do anything else.

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naskwo
Given the run on toilet paper, a better black swan hedge seems to be Shitcoin!

