Timeline for Why did Satoshi design Bitcoin to be mineable only on specialized hardware, if the goal was decentralization?
Current License: CC BY-SA 3.0
13 events
| when toggle format | what | by | license | comment | |
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| Aug 19, 2022 at 4:29 | comment | added | verdy_p | Creating a purely decentralized network is a dream: it is already extremely difficult to reach in other Internet domains. Look at what large monopolistic search engines can do, and if Google for e.g. introduces some Quantum Computing (QC), it could have a very powerful IA to break all existing attempts to get a decentralized consensus! This also affects now all automated markets or insurances, all interested in IA (and now also in QC), as well as dictatures (to control the opinions). | |
| Aug 19, 2022 at 4:24 | comment | added | verdy_p | So Bitcoin (or any other chainstate) must create an innovative way to regulate its consensus and allow again more decentralization. But it's a very difficult problem (it would probably require some IA to locate chains of transactions that are too much coordinated by a controling entity, and lower the weight of their "votes" in the consensus, and probably introduce some cryptographic-level randomness in the consensus process to break their coordinated strategies). | |
| Aug 19, 2022 at 4:18 | comment | added | verdy_p | But this also means that less people can mine and mining is more centralized than before and there's a growing risk of some large enough organization to take over 50% of minin power (unless there are lot of people mining in large pools, without ever being profitable, except to avoid a monopolistic control of Bitcoin's consensus to break the market equity). But it is known now that even a 25% share of miniing power is enough to get a significant advantage and progressively take control Bitcoin's value with forked chains: it may explain why Bitcoin's market value has dropped so abruptly. | |
| Aug 19, 2022 at 4:13 | comment | added | verdy_p | But mininig in regions where power is expensive, limited and polluting, mining is now prohibited or severely taxed (so they are no longer profitable): lot of miners were destroyed or stopped by their owners that just loose their money (notably those using GPUs and all those using CPUs). | |
| Aug 19, 2022 at 4:10 | comment | added | verdy_p | FPGAs then ASICs were specifically made not just to be "faster". But also to use much less energy (so then it was more profitable too: yes it was costly to design, but when scaling up, it was more protitable, especially in locations where electricy is costly). But it was not sufficient, and now miners are running mostly in locations where power is very cheap (nuclear or geothermal, it could eventually use gas in Russia or Arab Emirates), including for cooling (e.g. in Iceland and Arctic regions). | |
| Nov 12, 2017 at 17:15 | vote | accept | parliament | ||
| Nov 10, 2017 at 21:41 | comment | added | coteyr | And don't forget to be a legit miner you may have to pay taxes and other such fees in your region. | |
| Nov 10, 2017 at 21:37 | comment | added | coteyr | Also keep in mind that it took a while for the hardware to actually be profitable. At the start, I remember tat ASICs were nice but the profit margin was very low. The cost of the device plus the cost of electricity and the cost of cooling meant a very significant investment to see a return higher then say a US$ savings account (which isn't much). As hardware got better and cheaper the profit margins increased, and made it a more viable option. | |
| Nov 10, 2017 at 20:52 | comment | added | quetzalcoatl | @jwg: if we're to nitpick and catch words, he said "a student could" not "any student can" and that makes a whole lot of difference :) | |
| Nov 10, 2017 at 13:51 | comment | added | jwg | @PeterTaylor It is not the case that an intelligent first-year could design an ASIC to efficiently mine Bitcoin. | |
| Nov 9, 2017 at 23:27 | comment | added | Peter Taylor | It's not really "someone figured out" how to mine on FPGAs or ASICs: an intelligent first year undergraduate could port SHA256 from C to Verilog. It's more that it began to make economic sense. ASICs in particular require a big enough up-front investment that you need economies of scale. | |
| Nov 9, 2017 at 22:55 | comment | added | Toby Hawkins | Just to add, this is mentioned in the original whitepaper which is a short read. I'd recommend anyone interested in Bitcoin to read it as a starting point. bitcoin.org/bitcoin.pdf | |
| Nov 9, 2017 at 22:19 | history | answered | Ava Chow♦ | CC BY-SA 3.0 |