Today's crypto has the same issues: the fastest decision-making computer with the shortest time to the network makes the block.
Just like cutting inches off mainframe cables, manufacturers of ASICs purpose-build computer chips for crypto. GPU operators tune their cards and even download new code to get every last bit of processing capability from their devices. Crypto in these ways is just like HFT.
Transferring data and calculating the core of a new block takes a fraction of a second, and then it takes an average of several minutes to find the right random numbers to finish the block.
A latency advantage in HFT lets you take most of the profits. A latency advantage in cryptocurrency mining gives you a fraction of a percent better profits.
A calculations-per-second advantage helps in mining, but it's strictly proportional.
> Transferring data and calculating the core of a new block takes a fraction of a second, and then it takes an average of several minutes to find the right random numbers to finish the block.
A PoW, say Bitcoin, is configured in the consensus algorithm to avoid duplicate spending. The fastest, correct miner for a block that communicates the quickest to the network will get the block.
I think you're very confused about how mining blocks works. It only takes microseconds to test a specific hash. Every miner is testing a different random bunch of numbers to see if they get a lucky result where the hash starts with enough 0 bits.
There's near-zero overlap between the numbers tested by different miners. So a latency advantage does not make you win. Everyone is picking lottery numbers in parallel. If three miners have the exact same hash rate, and one of them has a 2 second head start, then the one with the head start is only going to win 33.4% of the time.
You're making some incorrect assumptions about what I wrote, based upon somehow reading things I didn't write. I am intimately familiar with the bitcoin network. I never said that many miners simultaneously work on the same block. Don't worry, you aren't alone in the crypto world with making assumptions.
"The fastest, correct miner for a block that communicates the quickest to the network will get the block." is misleading at best and completely false at worst.
If I'm misinterpreting you, feel free to clarify, but to me it looks like you're saying that latency matters (more than a fraction of a percent) with cryptocurrency, and it does not matter.
And moreso, "the fastest decision-making computer with the shortest time to the network makes the block." is not true. Even if you mean "lucky" by "fastest", since the computer that finds a block doesn't have to be fast, 99+% of the time blocks are found far enough apart that time to network is irrelevant.
I meant that the flat system of crypto where (at least before industrial mining), people could spin up mining rigs (which is still possible, I think at least with some altcoins), but also, that the barrier to entry for folks trading crypto is lower than traditional markets. Some may chalk this up to the need for KYC/AML, but I think there are intentional barriers to entry for individuals that people in power don't want to have access to say, equity markets, that don't exist as much in crypto markets. I don't think crypto markets should be used to supplement terrorism, money laundering, tax avoidance, or anything else like that, but if you take a look at say, Robinhood, who tried to lower some of these barriers to entry to traditional markets, I think crypto as a whole is trying to do that. I also have said in other posts, and will continue to, that blockchain analytics will only continue to get more advanced, so the narrative that crypto is only used for illegimate activity is bullshit. I do think that it is a power to the people that can't be stopped, due to its decentralized nature, and that it is the only possibility I've seen so far as an alternative to everything else going on that requires sovereign government policy and currencies (that are backed by war, control, etc).
Just like cutting inches off mainframe cables, manufacturers of ASICs purpose-build computer chips for crypto. GPU operators tune their cards and even download new code to get every last bit of processing capability from their devices. Crypto in these ways is just like HFT.