Thread

What's HPC?

High performance compute. AI.

Ah okay. But can ASICs do that?

But if someone with unlimited money (a country like USA or China) wanted to attack the network by paying the miners to mine empty blocks indefinitely, they could effectively stop the network since they are currently so few pools. And their resources are drastically higher than the fees and reward the miners receive from the network. Is that not true?

Hypothetically, would the US government pay miners in China to mine empty blocks?

If we assume that a pool is going to do what’s best for themselves, they could operate a mining operation exclusively to mine empty blocks if paid enough by a bad actor. Hypothetically.

The energy - not the ASICs. At most energy of the large miners today, already unprofitable for bitcoin. That’s why they’re repurposing their sites to HPC.

i don't know if it's just been (bad) luck in timing lately but i feel like i haven't seen much from you on nostr lately. really good to see this 'random' note from you on a saturday night. a well-made and reassuring point!

So they let the miners sit unused while mining is unprofitable? If so, that's annoyingly inefficient... Surely there's something a miner can do other than mine, during these periods..

Valid transactions cannot be stopped from being added to the timechain. Even if you control 75% of the hash rate, all you will do is bid up the price of transaction fees. Someone will always be there to take the fee.

Good point, but there has to be some upper limit to the fees most people are willing to pay. I wonder if that's higher than a government can pay to offset.

Those miners represent a capital investment. They could recoup some of that investment by selling the rigs. I'd argue that ai compute & bitcoin mining incentives will constantly compete for energy usage & capital allocation. What might not be sustainable today may be highly profitable in 3 months.

Yeah but selling rigs means losing whatever the msrkey figures is amortized, and the transportation and taxes. It would be so much better if rigs could sit there and do other tasks

I don't remember the reasoning... But you don't want the mining rigs to be useful for anything but mining Bitcoin. It's supposed to be better for Bitcoin that way

Interesting. I'd like to know the reasoning for that.

😎Exactly, mining centralization is self-correcting. The free market is the ultimate decentralizer, punishing inefficiency and rewarding innovation. Those chasing fees instead of cheaper energy will get outcompeted by those who actually evolve.

ASICs can only do a very specific task. ASIC (Application-specific Integrated Circuit) They are very high performance in that one specific thing. But, as Jeff said, AI is competing for the energy and infrastructure.

Bitcoin mining also has the potential to replace energy storage technologies, further enhancing decentralization. Solar and wind energy systems can be designed to meet the maximum electricity demands of a remote city, while also incorporating future capacity considerations. These systems can then be connected to a mining site. As long as there is an excess of energy, mining operations can continue. Conversely, when energy is needed, the miners can be turned off. It’s an elegant solution. -proofread with AI

Except mining pools are what is centralized, not the miners. Only ocean has solved the technical side of mining centralization.

It’s so cool how since it’s actually a free market, we can just let the market cook. 🧑🏼‍🍳 🧡

Let the free market cook. nostr:nevent1qqsz075muv2tugwffsamzv84jsl22k0qymetcs73t09mn7wwlepjjmcpzemhxue69uhky6t5vdhkjmn9wgh8xmmrd9skcp2v4zd

Hey Jeff, I know you like game theory. I do too. I'd be interested to know if you can debunk my article: - https://controlplanecapital.com/p/what-most-bitcoiners-are-wrong-about

Not much to debunk - except that the risks that you point out are being solved by education, circular economies, privacy tech such as Fedimint by a ton of builders, OG’s, and others who know the risks and choose to spend their time building and contributing to an alternative reality of what you pose here. It only seems like there are fewer because many of their voices are being drowned out by the flavour of the day. That’s why I’m so optimistic. I know for sure that governments will try to co-opt Bitcoin and most will go along with it…..measuring in price go up…..BUT, that polarity creates the opportunity to provide immense real value….and I’m spending my time with those building something that won’t be stopped.

💯! Repricing everything includes nation states and they will be the last to catch on. The ultimate hubris. Newspapers, Music, Movies, Retail, Banking and soon Fiat economies. Imo - gold sniffs it, Bitcoin measured in energy seals the deal.

Thanks for taking the time. I think privacy tech will be heavily suppressed/stopped at scale. Circular economies are awesome but niche. Most of what I've written about in the article is an education problem and gets solved by talking about these issues. As you said, most measure in price go up, so all people want to hear is that Bitcoin is going to $1 million in 2 years. Ironically, this would be more realistic if people took self-custody instead of buying IOUs and gambling on treasury company penny-stocks. I hope I am wrong on the privacy tech suppression at scale angle. We'll have to wait and see.

Miners chasing fees instead of efficiency are just fiat thinkers in orange costumes. The market will teach them. 🔥

They're only good for hashing.

If 51% of the mining hashrate get together and say they'll include only OFAC-compliant transactions, and they'll build only on top of OFAC-compliant blocks, then we'll have a cartel of miners that cannot be beaten. They'll agree to exclude miners that don't sign up to their rules, and those rules will change in arbitrary ways to suit the leaders of that cartel Miners outside that system will earn nothing, and will quickly stop mining It's critically important that the relay network continue to be designed to help small miners and new miners, that is the real subtext of the Core versus Knots argument.

But wouldn’t that undermine the incentive of the miners? The reward for the miners is the Coinbase and not so much the fees. If the coinbase gets worthless because the network dies there is no incentive to mine empty blocks in that scale.

Hashers are not “miners”.

I’m curious what nostr:nprofile1qqsg86qcm7lve6jkkr64z4mt8lfe57jsu8vpty6r2qpk37sgtnxevjcpzpmhxue69uhkummnw3ezumrpdejqzrthwden5te0dehhxtnvdakq0yjchp will answer. But aren’t the nodes always looking for the longest chain? And while the 51% heighten the possibility of mining the next Block, it’s still possible not two get it maybe two times in a row. As soon as the cartel is two blocks behind, there is no way of catching up with the next block - so they could continue working on their OFAC-Chain but it would be shorter and therefore not valid for the nodes.

Can you explain that?

This mining group have 51% of the hashrate. If they remain coordinated, i.e. only mine their OFAC-compliant blocks *and mine only on top of each other's blocks*, then they will have the longest chain When they first decide to do this, then it's possible that - for the first couple of blocks immediately after they 'activate' - the 49% might be lucky and will build up a small lead. But that's just temporary during the transition. The 51% will keep building their chain, ignoring the non-compliant blocks from the 49%, and the 51% can't be stopped by the nodes or by the 49%. The nodes have zero defence against this kind of coordinated action by 51%. The only thing we can do is try to set up the incentives such that the miners remain uncoordinated and do not attempt this. This is why is remains critically important for the relay network to remain the primary (ideally, *exclusive*) source for the miners to get their transactions. If we try to censor things, encouraging the miners to further extend their "private mempools" with their out-of-band transaction-submission systems, then the miners will build more of those kinds of systems and eventually the *big* miners will connect their private mempools to each other. Eventually, the *big* miners will realise that they are simply coordinating transactions with each other and that they don't need the relay network and the relay network will be less and less important In that scenario, the relay network will simply be passive consumers of the blocks produced by the big miners; the transactions will be decided exclusively by the *big* miners. Bitcoin will be dead. The relay network must be optimized to keep the miners divided, and to keep all the miners, especially the big miners, dependant on the open relay network. As long as we keep the big miners divided from each other, we noderunners remain powerful. But we'll lose that power if we don't relentlessly continue our 'divide and conquer' against the big miners

It's just a trade off for specialising. They do one thing faster than any other chip. They can also be used to mine/attack any fork of Bitcoin. Bitcoin the token has been trading sideways for a long time. It sounds like miners are starting to capitulate. When bitcoin's price has another leg up, all the incentives shift again. If AI hardware could compete with ASICS, Bitcoin would have a decent mining attack vector risk. What protects Bitcoin is the fact that it's more profitable & less risky to be an honest/cooperative miner. The self correcting incentives of Bitcoin is something so magical, one might think they're divine.

nostr:nevent1qqs275la54pktpfpkzvxtlcvgr2ta0fakx645kjxjtgvge7xc0pjw9gpr9mhxue69uhhqun9d45h2mfwwpexjmtpdshxuet59upzp57hgyjdm76mm3sm3uvdzlpnxkamf7x8zxp2xhhzwv22fxjwk7caqvzqqqqqqy33ww28

Furthermore, large entities tend to introduce overhead in excess of utility provided. Given the ruthless nature of mining, this means bloated operations that only seek ROI will fail. Conversely, hashrate heating is price insenstivie and will hash regardless of mining revenue

isn't it that sooner or later some other small miner (not paid by a country) will be lucky to find a block and do include the transaction that big centralized miners or governments wanted to censor? and so, "worst case" it would take a bit longer, maybe a few days instead of 10 minutes, but still any valid transaction from anyone could be included, no?

The free market is there to save us once again! 💪

If transactions become that slow and expensive because so few blocks that contain transactions are mined, it could effectively make the network useless.

A calm and poignant reflection as usual ♥️ What I really look forward is for stratum v2 to become the norm, but I guess something must happen to create the incentive. At the moment only Brains and Ocean allow it, correct?

But if their goal is to make money, as long as they are being paid enough to attack the network by a bad actor then they don’t care about the incentive of the network. They’re basically being paid to bring down the network. And in my opinion we have to assume that will happen if we really think bitcoin will become what we think it will. In other words, assume the worst and decentralize mining and block creation ASAP.

Yes but would bitcoin be effective as a network at all if it takes days to get transactions into blocks and those transaction fees are also extremely high

Privacy tech will not be stopped - already too late. You’ll see why soon and how you can very easily make sure you’re a part of it that’s easier than running a node.

Your constant litany of "trust me bro, Bitcoin as freedom money is inevitable" isn't remotely plausible. plus one for keeping it positive I guess but minutes several hundred for cope

Makes sense. And IMO, bitcoin is divinely inspired. Basically its an example of a platonic ideal form emerging out of chaos as a coherent entity. In bitcoin's case, we're not looking at a physical thing and imagining that there's a platonic ideal version that collapses an infinite array of possible features into one knowable concept, but rather the knowable concept emerging almost a-priori and in order to know it we describe it's features - so knowing its genesis makes it backwards compared to every other thing in the course of human experience. It would break my brain to try believing that bitcoin could enter this world without divine inspiration. Well... Yes, that sounds woo-woo to me too. I need another coffee.

O>1

Jeff, good thoughts🙏. Isn’t the flip side that in a deflationary environment the energy costs are nearing zero, so that the fee ends up the main revenue?🙏

Would appreciate thoughts on this: I think also it is divine imitation. It took a miracle for the Divine to create a physical world with limits to His limitlessness. It took a miracle to allow free will. There was no necessity for either. As creatures we owe worship not a desire for equality. Stay humble reflects this to me. Fiat is - even as a ledger - limitless expansion. As such a ledger it implies man can owe man infinitely; it either bakes in a lie (it will not actually be repaid, an affront to the truth). Or it bakes in an assumption of divine equality- man can owe infinite because man will be infinite. An affront to justice. Bitcoin did not have to be finite - this was a choice; as such Bitcoin, (even if inspired) as a creation by the flawed intellect in man, was made in imitation of divine creation. Unlike gold which was practically finite - (not via a nod towards humility but in fact as a metal steeped in a scarcity at odds forever with environmental stewardship) - Bitcoin is prescribed finite. While it can be subdivided to account for *a lot* of transactions, the finite backbone does prescribe limits (if I understand Jack K at all, nostr:npub18384z4sjgdfy7vr76thzwtru7jncysz0hcapwesxqsak44p8aemsyfaslh , and I probably do not) these limits may stretch towards the absolute limits of the material world. As such created in imitation of the Divine as a creator it can be seen as Gods money ( maybe in the solution to the recommendation to give to Ceasar what is Ceasars…) Stay humble stack sats (which I think is from nostr:npub1qny3tkh0acurzla8x3zy4nhrjz5zd8l9sy9jys09umwng00manysew95gx ) can be both a personal mantra to overconfidence and foolish pursuits but also maybe a moral imperative in orienting towards ethical money. I suspect I have made many errors and shortcuts coming to this; to the extent any of this is useful or true it came from other sources I cannot specifically remember to quote or credit and has become inchoate in my head.

And to get further outside of any competence, if things like changing op return limits or other changes to bitcoin itself challenge (even indirectly) this essential attribute to finite, then they challenge the good of the imitation. All else equal (which is a very tall order) if a change seems to expand Bitcoin it may undermine this humility?

Kardashev has entered the chat

Innovation to increase productivity and value for consumers would definitely benefit the miners instead of finding ways to increase profits with higher fees. They could encourage innovation in lighting that mines bitcoin or other value added products and services.

Interesting thoughts! This is a new angle for me. It never occurred to me to associate finitude with humility in the design of bitcoin, and then think of bitcoin as a smaller image of God - which it must be, since everything is, to varying degrees of fidelity and scope. An infinite fractal has infinite variation, while still retaining coherence. In fact, that would still be the case even without God, based on cosmic expansion from the supposed big bang. I like it. Thanks for showing me this new side of this jewel emerging from hyperspace that we call bitcoin.

Ah, forgot part - as I currently understand the op_return thing, stuff put there is prunable. If that's wrong, someone please tell me, cuz that's really important I think. I've been mostly against the op_return change, because it looks like an inelegant solution imo - elegant would be reverting at least part of taproot or the witness discount - but if its prunable then it might not be as bad as it seems. Then the next question after that is : can lightning work (or be made to work) on a pruned node (currently no). My lack of knowledge here is forcing me to emphasize the "stay humble" part of Odell's phrase.

But who owns the miners if their are public traded company ( doesnt matter if compute or protocol is decentralized) Sample list and of course CCP which mines about 50% Marathon Digital Holdings, Inc. (Symbol: MARA) Riot Platforms, Inc. (Symbol: RIOT) Hut 8 Mining Corp. (Symbol: HUT) Bitfarms Ltd. (Symbol: BITF) Canaan Inc. (Symbol: CAN)

well, you could say that both normal miners and governments that are using bitcoin, you could say that they are generating another financial bubble in which by investing in bitcoin many people will get into it only for one day something to happen that causes a fall. of its value causing everyone who had money invested in bitcoin to lose it in just seconds?

Entities providing hashrate without deciding what block to mine are not miners since they have no say over what transactions go into the next block. This means that mining can still be centralized even if hashrate providers improve upon energy efficiency. This is why adaption of StratumV2 and of solutions like DATUM (ocean) are crucial

I am new to your feed. So much good information. Thank you.

🙏

Does that take the ‘decentralized’ out of your “as long as it stays decentralized and secure, you have an open, decentralized, secure protocol bounded by energy” thesis?

Free market is working perfectly - by providing choice away from those who would centralize. Just chaotic as few understand it.

Just listened to your latest interview - need to move away from the concept of BTC as an asset within a control system and more towards demonstrating to close circle how preserving the hope of some semblance of sovereignty by holding BTC in cold storage is like the root cellars of old - not luxurious but quells hunger when the system falters - as it is doing presently. I got the impression that you moved from Canada; is that so?

Trying to “fix” mining is like trying to fix gravity. The market and the thermodynamics already wrote the rules.

Hello.. it's me Elon Musk. Nice meeting you here! 🤝🇺🇸

lol oKay

So you’re saying my Bitaxe has a chance? I’m a decentralized BTC Mining operation of 1 but I’ll be doing it no matter the price 😎