Interesting post on increasing SHA256 mining efficiency
- Thread starter NoahA
- Start date
Yes... I agree as well. But this algorithm does way more than just mining, so if there is a way to enhance your chance of finding the right answer without random chance, it would be an eye opener.
I don't understand how this is going to increase profits. Unless you're referring to a quick one-time event.
There already are too many mining companies running at negative cashflows in this space, and that's even after a number went bust due to the post-merge apocalypse.
All this will do is either cause more mining companies to join to get part of the pie, or just slow down the rate of others going bust (for a while).
Economics works by supply & demand. I don't see how this can change anything long-term?
There already are too many mining companies running at negative cashflows in this space, and that's even after a number went bust due to the post-merge apocalypse.
All this will do is either cause more mining companies to join to get part of the pie, or just slow down the rate of others going bust (for a while).
Economics works by supply & demand. I don't see how this can change anything long-term?
From my understanding, it has to do with increasing efficiency of the algorithm. Its kind of like if you are playing roulette, and notice that the wheel isn't balanced, so you find some numbers on one side of the wheel are more likely to come up.
So here, I figure they found a way to make the hashing less random, and more predictable. Maybe there is a bit of a pattern to the nonce that they keep changing in order to reach the desired value they need faster.
Stats dictate how likely you are to reach the correct answer on any one guess, and lets say you need to make 1 million guesses (its much, much bigger). But then you find that there is a way to make the guessing more precise, and hence you on average now need to only make 900,000 guesses. This would mean that you've got a leg up on everyone else, a 10% efficiency gain.
Now of course, if everyone else does this as well, the difficulty level just goes up, but if you can keep the secret to yourself, you might get more block rewards with less work than everyone else.
Your costa are less, then you can sell you product for less.
Does this bode well for the end consumer??
LOL... I see what you are trying to do here. The cost to produce bitcoin isn't exactly reflective of the price. Just because more people will want bitcoin one day doesn't mean that more supply can come online. Likewise, if bitcion isn't popular for a while, it doesn't mean you can scale back production. A new block is produced every 10 minutes on average, and that miner gets 6.25 bitcoins... but soon to be half of this by about April next year.
From my understanding, most miners don't want to sell their bitcoins because they know the value is going to be much, much higher. So they finance their operations with debt.
Supply and demand will ultimately set the price of bitcoin, but the production schedule is fixed, so you can't compare it to anything else in the world like commodities or goods made in China or even services. These things all scale and can be scaled up or throttled back, but not bitcoin issuance.
Oil is a great example. OPEC sees a drop in demand, so they cut production in order to keep prices high. Bitcoin won't do this. We all know how many are being produced and we all know how many are out there. The fact that the issuance schedule is fixed actually makes for a much better system.
I wonder who is lending them money? I'm not as convinced as you are of the value if Bitcoin and I certainly wouldn't put my capital at risk on something so volatile.
I wonder what kind od interest they have to pay?
I can see keeping surplus coins in reserve but I imagine the bills have to be paid currently.
The publicly traded miners haven't been doing that well.
I have no idea about who is lending them money. But there was a recent announcement from an OG in this space, one of the cyperpunks who is CEO of Blockstream that makes a hardware wallet. He started a fund that will invest in older model miners (computers) which will then be put to use once the halving happens. After this time, each reward per block will be 3.125 bitcoins. This will make it even more lucrative to mine.
Think of it like BlackRock buying up properties during a housing collapse. Or, from what I heard, Blackrock buying up land from all the burned down houses in Hawaii. So the idea is that you buy the miners cheap now, which aren't as efficient, and then you put them to good use once the cost/benefit analysis goes in your favor.
I agree that bitcoin is volatile, but as some people say in this space, if you don't own bitcoin, it means you are short bitcoin, and is this something you want to be short? Or put another way, do you have faith in the government fixing problems? Or maybe central banks fixing problems? Do you think inflation won't be used as as tool to "outgrow" debt? Or do you think that maybe the debt won't somehow be defaulted upon? There is no scenario out there that allows for a way out of this mess without major chaos and which doesn't replace the current financial system.
Listen, everyone can argue about how to fix the system, and maybe you aren't ready to see the light on bitcoin, which is fine. But for anyone to think that the next few years are going to be just fine is totally clueless. You can't have over 1 trillion in deficits in the US, along with almost 1 trillion in interest expense, and a high interest rate that has completely frozen the housing market, and the list goes on. There is a list of things that is the possible breaking point. The minute there is talk of dropping interest rates will be acknowledgement of major pain ahead, and if they don't droop, there is already major pain from just where they are. The only game plan is for the central banks to bankrupt all the smaller banks and gain control over every dollar. But the US isn't China, and there is no possibility of control at the level that China does. It would lead to civil war. But its only with total control that the authorities will be able to keep the system functioning as is.
Anyway... as you can see, I'm bullish AF!
(Interesting side note... had a friend visit me from Hong Kong. He is fully aware that his condo there can easily be written down to zero. If China makes a strong move and he has to get out, he will leave, and luckily has citizenship elsewhere so he can go. But he understands the value of his expensive condo will be zero to him. And yet, he doesn't think bitcoin is valuable. All the property value out there can easily be a fraction of what it is today with just a simple move of the government. What do you think happens to the financial system if property values have to be written down because of geopolitical events?)
If I understand the whole original bitcoin mining principal (good chance I don't) the more that are mined the harder the remaining coins are to be mined. So even if someone figures a way to game the system somewhat does it really amount to much of an advantage?
Doesn't the "gaming" have to itself step up its game more and more?
Doesn't the "gaming" have to itself step up its game more and more?