wumpus changed the topic of #bitcoin-wizards to: This channel is is for discussing theoretical ideas with regard to cryptocurrencies, not about short-term Bitcoin development | http://bitcoin.ninja/ | This channel is logged. | For logs and more information, visit http://bitcoin.ninja
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<bramc>
Arguably, if fees are on an upward trend it's better to always consolidate sooner because fees will be higher later
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<bramc>
But if you can manage to ever overshoot by less than a transaction fee you've basically got it. Of course, that's a problem too: With variable transaction fees, you have to overcommit early
<bramc>
Maybe I should just conclude that coin combining doesn't matter all that much because it amortizes out the same in the end anyway
<gmaxwell>
I think the only thing that matters there is that if you undercombine and get very small change thats a loss.
<bramc>
Why? If your output is smaller than the amount it costs to add another input to a transaction then throwing it out is cheaper than doing the consolidation.
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<gmaxwell>
e.g. you spend 5.0001 to get 5 out, ending up with 0.0001 change. That might be worth keeping, but not hugely so. You could also add a 1.0 additional input and end up with 1.0001 change, which is much more useful.
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<bramc>
The cost of a transaction is mostly proportional to the number of inputs it has, so for every utxo you have in your wallet that will eventually cost some coin to get consolidated. If you can make it smaller than the consolidation cost, then throwing it out is a win
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<bramc>
Adding that 1 sounds like a loss. You could have waited to add the 1 until later, which would cost the same amount.
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<gmaxwell>
but later you can now ad the 1.0001 which cost the same as adding the 1 itself or the 0.0001
<bramc>
It's still adding two inputs over time, and it loses versatility: Maybe you need to spend exactly 1.0 or .0001
<gmaxwell>
indeed but the the merging might make the exact spend more likely. Which is I guess the question thats interesting to ask.
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<bramc>
If you merge later you have three possible exact spends. If you merge now you have one
<bramc>
A, B, and A+B, versus just A+B
<bramc>
Of course if you have more then your chances of having an exact or near exact go up as well
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<bramc>
Which seems to be an argument in favor of keeping different sizes of coin around
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<amiller>
bramc, i think the fee should be based on the costs, and eventually that will be dominated by utxobytes*time
<amiller>
assuming that full nodes are still keeping track of even all the utxos
<bramc>
amiller, I'm just working with what we've got today
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<CodeShark>
utxo space should be rented out, not sold :)
<gmaxwell>
CodeShark: hard to avoid bad incentives.
<gmaxwell>
"lol, think I'll ignore this transaction right here so it's UTXO expires next block."
<CodeShark>
yeah, indirect incentives via the miners are problematic
<CodeShark>
economically what would most make sense would be to distribute this fee across all nodes that maintain a copy of the utxo...but I'm not sure how to accomplish that ;)
<CodeShark>
and still have a separate fee incentive for the miner
<gmaxwell>
I think the best suggestion I've seen along those lines is petertodd's proposal that the UTXO set not be stored (or only a small, fixed size, 'most recent') be stored and the rest is accomidated by an increasengly large hashtree membership proof. The down side is that bandwidth seems like it will always be much more scarce than storage; so almost any traodeoff of less storage for more BW is a lo
<gmaxwell>
ss.
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<CodeShark>
are you talking about the merkle mountain range proposal?
<CodeShark>
in principle, I fully agree with the idea that the person spending an output should be responsible for supplying the proof that the output exists and hasn't been spent
<gmaxwell>
MMR is just another name for a particular kind of insertion ordered hashtree strategy. I'm speaking more specifically of a sub-class of "commited TXO" proposal (where there is a small txo set everyone is assumed to have, and the rest is accessed via commitments)
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<CodeShark>
but I don't think such an approach is really practical for a flood network
<gmaxwell>
though I did observe the proof sizes of TXO commitments are much better if you also assume nodes will cache the top levels of the tree; though that hardly takes any storage.
<gmaxwell>
it's easy to halve the proof sizes while hardly requiring any more storage.
<gmaxwell>
but the access costs have to be considered too... turns out that updating is expensive.
<CodeShark>
or perhaps have a way for nodes to query for the proof if they don't already have it
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<gmaxwell>
CodeShark: well sure, you could p2p negoiate and say "I've got all the data, don't send me proofs" so on a link by link basis you could make the bandwidth vs storage tradeoff.
<CodeShark>
right
<gmaxwell>
But if its virtually never a win to send the proof; then the scheme (With its cpu cost) isn't a win.
<c0rw1n>
CodeShark that sounds to me a liiiiiiiittle like having the spender ... mine? the proof that the TXO is U ? ( feel free to ignore if this is too stupid )
<CodeShark>
the spender doesn't have to mine...but the commit structure needs to be updated before a miner mines it
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<c0rw1n>
( still over my head and this is not btc-lrn2wizard so thanks but i'll stop asking ( unless and until i go and relearn everything technical i knew of bitcoin that i forgot in over two years ) )
<CodeShark>
c0rw1n: essentially, either the validator (which updates the commit structure) must have enough of the global commit structure to validate the transaction...or the sender must supply exact instructions on how to update the structure
<CodeShark>
and it needs to be possible to validate each instruction with minimal knowledge of the global commit structure (i.e. a hash)
<c0rw1n>
that ... does ring a few more, distant, bells but still doesn't entirely parse :(
<c0rw1n>
i forgot so much
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<CodeShark>
imagine git but where there are also strict rules on how you can modify files
<c0rw|zZz>
ok, hazy representation engaged (hoping to avoid illusion of transparence) ...
<CodeShark>
you can either send the modified files or deltas
<CodeShark>
but if you supply a delta it needs to be possible to check that it's a valid transition
<c0rw|zZz>
ok, got that yes... yes
<c0rw|zZz>
ah so
<c0rw|zZz>
the transmission could include the delta and a hash (of the unmodified file, or of the result)
<CodeShark>
right
<CodeShark>
and you might need to break up a delta into several deltas so you can validate it
<CodeShark>
imagine primitive deltas...the smallest possible deltas that can be validated with knowledge only of the commit hash
<CodeShark>
these structures must be fully self-contained...meaning they encode the complete set of instructions for updating the commit hash
<CodeShark>
and it must be possible to make sure each delta satisfies the transition rules
<CodeShark>
cost tradeoffs can be better reasoned about economically if we have incentive mechanisms
<c0rw|zZz>
so what's transmitted is a series of tiny deltas, each with a hash that proves it's actually a sensical (following the transition rules) update to the previous version of the file
<CodeShark>
right
<CodeShark>
there are some intrinsic incentives here - for instance, it is always in the interest of a sender to make sure it is possible to construct a proof if needed. but transmitting the proof across the network incurs costs on other nodes
<CodeShark>
as does storing it
<c0rw|zZz>
( i remember reading the term "relay fee" some day. related? )
<c0rw|zZz>
hm
<CodeShark>
there's a dust prevention fee that's hardcoded into bitcoin core - but it's not a particularly good example of proper incentives ;)
<CodeShark>
proper (or direct) incentives would be the ability for the prover to pay the relayer
<c0rw|zZz>
i'd thought of having each relay sign each transmission they relay, which would build them each a rep for being Good Transmitters ... don't remember where i was going with that at the time
<CodeShark>
it's too easy to game that by just sending a bunch of transactions to yourself
<c0rw|zZz>
yeah at which point it'd need blockchain analysis in parallel with relay structure analysis and that would be gameable too and then arms race so yeah no
<c0rw|zZz>
( ... if it'd even be at all profitable to arms race for a few satoshis and/or hardly-monetizable rep cred ... )
<CodeShark>
I believe ultimately this is the fundamental problem of decentralized networks...and if we could solve it it's sort of like the holy grail
<CodeShark>
how to create mechanisms for direct incentives that promote network health
<CodeShark>
and since these networks are likely to be highly heterogenous, we also need to consider division of labor
<CodeShark>
it makes sense for different types of devices to specialize in different tasks
<c0rw|zZz>
i'm uncomfortable with that :-/ best p2p network has flat structure with every node being equal ... but then bitcoin has miners, full nodes and spv nodes
<CodeShark>
mobile devices with intermittent or restricted network access don't make particularly good validators, miners, or relayers
<CodeShark>
big servers don't make particularly good point-of-sale authorization devices
<c0rw|zZz>
yeah, exactly : flat p2p nets are not practical
<c0rw|zZz>
mathematical and physical limits say that something like bitcoin can't very well live on nodes all light enough to live in intermittently-connected, compute-limited smartphones
<c0rw|zZz>
it's 8AM here and i forgot to go sleep again. good night magic cypherpunks :-)
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<CodeShark>
nite
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<gmaxwell>
I've talked about BAR model in here a fair number of times in the past; never seen that particular page; see (at least some of) the papers there. It's a useful model, I think.
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<andytoshi>
lmatteis: yes, but probably #bitcoin until (if ever) more information comes out
<andytoshi>
i don't think anyone here was responsible for those transactions
<frankenmint>
price movement today
<frankenmint>
i mean coins movement but I'm certain that we could see market reaction to this as well,
<andytoshi>
market reaction is definitely OT here
<frankenmint>
sorry
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<fluffypony>
andytoshi: oh sorry, it was me, my finger slipped when I was trying to play SatoshiDice
<fluffypony>
:-P
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<btcdrak>
BC.i go home you're drunk.
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<btcdrak>
maraoz: so that's an attack on the blockexplorers?
<fluffypony>
seems that way
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<maraoz>
btcdrak: so it seems. bc.i is the only affected explorer afaik
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<fluffypony>
btcdrak: "Relayed by IP Blockchain.info"
<fluffypony>
so there's that
<frankenmint>
hmm, I was thinking, if BTC hyptothetically could choose its own blocksize on its own, how would it work?
<frankenmint>
would it be forward thinking or lazy?
<btcdrak>
RIP anyone relying on BC.i's API and accepts zeroconfirms
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<lmatteis>
andytoshi: before saying "yes" you should wait confirmations ;)
<andytoshi>
lmatteis: well, it was a real bc.i link :)
<andytoshi>
but yes, lesson learned, i thought this was too extreme a bug even for bc.i
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<GAit>
I can't say I've seen worse but my first reaction was to check other block explorers and my node
<fluffypony>
well this is blockchain.info
<fluffypony>
they deserve to be stripped of the name on account of incompetence
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<Tiraspol>
^
<nsh>
andytoshi, hey have you looked into multiprover models much?
<nsh>
for zero-knowledge consensus, that is
<andytoshi>
nsh: not at all, sorry
<andytoshi>
i suppose multisignatures are a special case of that
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<nsh>
hmm
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<nsh>
i suspect there are definite efficiency savings, but you then have a problem of ensuring no collusion in some interactive proof, or you have a more abstract problem of facilitating non-interactive proofs with composition
<nsh>
i was hoping that you might be able to avoid trusted setup using multiple provers, but that seems overly optimistic
<nsh>
(PCPs can be dispensed with, but from what I saw, it was still under a CRS model)
<andytoshi>
:/ i've been really out of the loop on zero-knowledge proving in 2015, all my crypto stuff has been ECC related.
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<andytoshi>
though fwiw nothing has jumped out at me from eprint.iacr.org in that time
<nsh>
i object to referring to how economics do anything as the correct way, even where it might be
<nsh>
*economists
<psztorc>
it isn't a general claim, of course, just one about measuring costs
* nsh
nods
<nsh>
.wik Spearman correlation
<yoleaux>
"In statistics, Spearman's rank correlation coefficient or Spearman's rho, named after Charles Spearman and often denoted by the Greek letter (rho) or as , is a nonparametric measure of statistical dependence between two variables. It assesses how well the relationship between two variables can be described using a monotonic function." — https://en.wikipedia.org/wiki/Spearman_correlation
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<nsh>
--
<nsh>
( Did you know that Bitcoin uses extremely strong randomness to select the creator of the next block? The randomness discourages collusion among block creators, making double-spend attacks unreliable. The randomness is so strong that no one can predict who will find the next block, or even when the next block will be found! )
<nsh>
-- you link to the distribution that's used to predict when the next block will be found...
<psztorc>
I know, I thought it was conceptually the closest
<nsh>
i'm just suggesting that claiming it can't be predicted is a bit misleading
<c0rw1n>
well it can't be predicted exactly ...
<psztorc>
good point, I'll add "exactly"
<nsh>
the fact that the period of block discovery converges on 10m modulo the cut corners of difficulty increases is kinda important to bitcoin working nicely
* nsh
nods
<nsh>
cut corners of *hashpower increases
<andytoshi>
i really like the couple paragraphs after "Is a “Work-Independent” protocol possible?", i think this is something people have trouble understanding
<andytoshi>
i do think your definition of P2P will be called "too strong" by people advocating (partially) centralized solutions; hopefully they will at least have to be honest that this is what they're doing
<andytoshi>
"This is because Miners are the most able to double-spend, and these coins are the easiest to double-spend, and so they need to be held to standards which are extra-conservative" is sorta true but not why we have the maturity time
<c0rw1n>
depends how blind you want the distribution to be exactly, but "infinitely" doesn't exist that's totally right
<andytoshi>
it's easiest for miners to double-spend, but they can double-spend anything with the same ease
<andytoshi>
the reason we have the maturity period is that in case of reorg, coinbase transactions are -gone-, even without malicious behaviour
<psztorc>
Ok thanks
<nsh>
psztorc, 'Earned $2000. After expenses and repayment, $230 was earned as compensation for specialized labor attention and risk-compensation.' how do you calculate that split?
<andytoshi>
well, i guess if the same miner produced both forks the coinbase could be the same
<nsh>
oh, nm
<lmatteis>
in Vitalik's "On Stake" article, he states that a PoS system "no one gains any benefit from making more than one attempt per account per second" using a PoS algorithm such that SHA256(prevhash + address + timestamp) <= 2^256 * balance / diff. i'm confused by this. couldn't one peer try many future timestamps to find the "smaller" value and therefore claim
<lmatteis>
the block?
<c0rw1n>
then what's preventing anyone from makint 10k accounts?
<c0rw1n>
*making
<fluffypony>
psztorc: great article
<lmatteis>
i guess that other peers won't accept timestamps in the future?
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<psztorc>
thank you!
<nsh>
i don't think it's entirely fair to say that large capital deposit illiquidity doens't have a temporary deflationary effect. i don't believe it's socially useful, but it may be argued to exist to a certain extent
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<nsh>
pricing reflects circulating currency, not theoretically future circulating currency, but it's not quite that simple either
<nsh>
actually, you address this is in the following paragraph
<psztorc>
i get that a lot
<fluffypony>
lol
<psztorc>
it sounds funny, but I actually seriously wonder if there's something wrong with the writing
<waxwing>
yes nice article, problem is how do we get people not like the ones in this channel to understand it ? :)
* nsh
smiles
<nsh>
start a cryptocurrency where you earn coins via comprehensive recruitment
<nsh>
*evangelism maybe
<fluffypony>
waxwing: you don't, PoS makes sense "intuitively" if you aren't used to thinking adversarially. Convincing people otherwise is...ugh...so much effort. The only way they learn is to get burned.
<nsh>
asimov wrote a book once called "a choice of catastrophes" going into the various ways humanity might see its end
<nsh>
someone could do a project where they create a successful of pedagogical altcoins that all fall to the various theoretical dangers in clear and theatrical ways
<nsh>
sounds like a lot of effort though
<waxwing>
fluffypony: well, that's a reasonable point but otoh in matters of money i feel like people understand that you can't just rely on fuzzy warm feelings. free market principles are widely understood. I think it's a failure to believe that physics can be involved that's the problem.
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<fluffypony>
waxwing: what I mean is that most people are disinterested in learning and understanding
<fluffypony>
that's not to say there aren't willing teachers, but how often is the "read the logs" post beaten here? people are lazy :-P
<waxwing>
seriously; most are literally incredulous when they first discover that bitcoin is fundamentally based on electrical power. see for example I Kaminska's old article with a title something like "Is this how money dies? With thunderous CPUs?"
<nsh>
unfuck-the-planet-tech, presumably
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<psztorc>
Markets are a conveyor of information...such that people will have to agree with you, even without replicating your experiences or reasoning.
<psztorc>
But we already have coinmarketcap with Bitcoin outperforming by like a factor of 200 and that doesn't persuade anyone either
<waxwing>
agreed
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<tromp_>
lmatteis: future timestamps will be accepted only later; thos in distant future may be ignored
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<tromp_>
c0rw1n: splitting your balance doesnt help you satisfy that equation
<c0rw1n>
yeah i misparsed
<c0rw1n>
sry :(
<lmatteis>
tromp_: say i just create a whole chain by myself, with entirely new transactions and blocks from the very beginning. are checkpoints the only thing stopping this from happening?
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<tromp_>
well, the very beginning could be defined by an ICO genesis, it's not fair to call that a checkpoint
<tromp_>
you still need to get hold of enough old private keys to rewrite history
<tromp_>
eg. by hacking a wallet hosting exchange
<andytoshi>
lmatteis: on bitcoin checkpoints will prevent this in practice, but it's not necessarily true that all nodes have the same checkpoints. what actually blocks you is the amount of work you'd have to do to beat the total chain work
<lmatteis>
andytoshi: yep and that's obvious in pow. unclear in vitalik's implementation
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<andytoshi>
oh, sorry, i wasn't following the context of the discussion
<helo>
wow, that paper...
<nsh>
ICO genesis, tromp_?
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<nsh>
oh, initial coin offering
<tromp_>
yep, like what NXT had
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<lmatteis>
tromp_: but with keys wouldn't you only have access to that block? you wouldn't be able to generate the other blocks after it... or would you?
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<tromp_>
you can make arbitrarily many blocks with arbitrarily many txs transferring stake among the accounts for which you have privkeys
<lmatteis>
hrm ok
<lmatteis>
so wouldn't a user that sold all his currency, go back and do this?
<gmaxwell>
Or give sell his old empty keys to someone else who will.
<gmaxwell>
Sure.
<gmaxwell>
I mean, most of the time most people don't care to attack. Though generally we don't regard things secured by indifference as very secure.
<gmaxwell>
lmatteis: you've been coming in here every couple weeks since Sep 18 2014 and asking about POS; burning out a bunch of people on this subject who were already tired of explaining it multiple times. I really do think you'd benefit from carefully reading and contemplating the materials that were directed to you the very first time you joined the channel.
<lmatteis>
ok yes. it was more a question regarding vitalik's blog post. but i'll stop
* nsh
smiles
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<Taek>
I made a block propagation manipulate simulation
<Taek>
*manipulation
<Taek>
the results and conclusion are at the bottom of the file, the setup is at the top
<Taek>
the results weren't as interesting as I was hoping
<Taek>
I think it ultimately takes some pretty extreme network bandwidth asymmetry in order for a miner to encourage mining centralization via unlimited blocksize manipulation
<nsh>
what is the limiting factor?
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<Taek>
nsh: my setup has 6 nodes, 3 with 40gbps links to eachother, and the rest of the graph is fully connected at 1gbps
<Taek>
the 40gbps nodes have 25% hashing power each
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<Taek>
40gbps vs. 1gbps is a pretty big disparity, and I don't think the results would be interesting if it was only 2x difference
* nsh
nods
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<gmaxwell>
Taek: uh. that looks bogus, go compare to sipa's simulator. (As an aside; 40gbps? come on.)
<Taek>
what looks bogus about it? (there are datacenters with 40gbps connections, I know it's a stretch but it didn't seem entirely unworldly. Do you think it was also too generous to give the 'weak' miners a 1gbps conenction?)
<gmaxwell>
Taek: (as an aside; another thing to keep in mind is that since mining is perfect competition a 1% difference in blockchain concentration can be a 50% increase in profit.)
<gmaxwell>
Taek: because your fully meshed network for 40gbps connections (assuming it was distributed around the world) would cost hundreds of thousands of dollars a month.
<phantomcircuit>
gmaxwell, more than that...
<phantomcircuit>
asia/africa are crazy expensive to get bandwidth
<gmaxwell>
I'm being generous because it's been a few years since I was involved in building such things. :)
<Taek>
I am skeptical that a 1% difference in revenue would blow up to 50% difference in profit, but fully aware that there is a large multiplier
<Taek>
I also believe that's Sipa's simulation of adding only a 2mbps conenction between the mining groups is overly-strict
<phantomcircuit>
Taek, the profit margin on mining long term approaches zero
<phantomcircuit>
a 1% difference will be enormous
<gmaxwell>
Taek: that was based on an actual measurement (to china); but you're free to change it and try different situations.
<phantomcircuit>
iirc 2mbps is actually double the actual rate due to packet loss + tcp
<gmaxwell>
Taek: getting the 50% blowup just requires mining be operating on a 2% margin over operating costs. We spent much of 2012 at that level.
<gmaxwell>
I think in general trying to look for bandwidth dependance here though is stupid; because there is no necessary dependance at all.
<Taek>
In general, investors will not invest in anything that has a lower profit margin than the S&P500, because they could have a higher profit margin just by sitting on the stock market.
<Taek>
For that reason, I don't think profit margin would ever go to 0
<phantomcircuit>
Taek, there's a delay between ordering hardware and the hardware being installed
<gmaxwell>
Taek: fuzzy thinking. The hardware is already there. You insert $1 and get $1.02 in a fairly short timescale. People happily (?) buy bounds with interest rates lower than that.
<phantomcircuit>
because of that the real profit margin will actually tend towards zero
<c0rw1n>
also a delay between investment and dividends no?
<c0rw1n>
on the Market
<phantomcircuit>
not to mention that there's enough people out there with "free" power that anybody paying for it is guaranteed to go to zero
<phantomcircuit>
c0rw1n, that's not the basis upon which most people invest in equities markets
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<Taek>
it's definitely a fuzzy thing to reason about. I wouldn't put money behind any of my claims
<phantomcircuit>
Taek, bitcoin mining is a classic perfect market
<gmaxwell>
And there are plenty of reasons that it will be dragged lower e.g. due to power surpluses. In any case, it's a big multiplier regardless of what it is it is exactly.
<c0rw1n>
last time i looked it was flatly impossible to buy asics at prices under their fabricator's projection of their returns, free electricity or no :-(
<phantomcircuit>
indeed it's probably the only one that's ever existed
<gmaxwell>
And so then you get faced with the question of "hm, should I move my hashpower to megapool X to get 1%*huge_multipler more profit?" the answer is hell yes. :)
<phantomcircuit>
c0rw1n, i suspect that antminers cost of production is significantly below their sale price
<phantomcircuit>
but they are now an effective monopoly player
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<phantomcircuit>
if you'd like to change that im accepting donations towards an open source bitcoin mining asic... so far i have collected $0.00
<phantomcircuit>
:P
<c0rw1n>
there were projects on btctalk like two years ago...
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<Taek>
huh. I never thought about adding bitcoin mining facilities to power plants to soak up overflow power
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<Taek>
that might prove to be even more effective than Tesla's wall battery
<phantomcircuit>
Taek, that's likely the eventual direction of the market; but that could take decades
<phantomcircuit>
especially as most of the excess power is coming from nuclear stations
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<phantomcircuit>
and they have unique security requirements
<AdrianG>
but that would only allow miners run at certain times.
<AdrianG>
isnt 21.co trying to do something similar with their chips
<AdrianG>
suck up excess electricity in return for airmiles or something lol
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<AdrianG>
Taek: i think plenty of people invest in things that yield much less than sp500.
<Taek>
bonds is a good example
<AdrianG>
not just bonds.
<AdrianG>
rental real estate for example
<AdrianG>
yields are lower, but so is the risk.
<AdrianG>
real estate market in general is huge, much bigger than sp500.
<AdrianG>
yet you have no shortage of investors of all sorts.
<gmaxwell>
Taek: people already use mining for overflow power on industrial sites (often industrial power is billed at $$$ for peak plus e.g. 2 cents per kwh. So when the machines are off, the miners are on... eating into that big peak)
<AdrianG>
then you have mutual funds, income trusts, etc etc etc.
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<nsh>
heh
<nsh>
mining as variable power cost amortization
<nsh>
actually, i think it was discussed before
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<psztorc>
I tried to figure out what 21.co was up to, and failed.
<psztorc>
But it occured to me that they'd have my phone mine while it was plugged into the wall and fully charged (like from 4 to 7 AM).
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