Re:Bitcoin Is Dead, Long Live Bitcoin
by zanny on Saturday January 16, 2016 @09:26AM
(#10915322)
> the majority of the hashing rate with high efficiency rigs in well-connected datacenters with low priced electricity.
The only time this is economically viable is when you both have a large enough economy and when your marginal hashrate gains over the swarm are significant enough to invest in.
My point is that if your algorithm is CPU / GPU favored, of course you can make specialized hardware, but as long as the performance gap isn't the multiple orders of magnitude modern bitcoin ASICs get over generic computers it takes significantly more money - and here is the key point - in relation to the value of the economy you are taking over to do so. Where it could cost 100 million to build a bitcoin miner datacenter that can immediately seize 30% of the hashing power on the network, your 100 million datacenter on an scrypt network can probably only seize 10-15% because there is much higher normalized mining participation by end users. It means it would cost you a lot more to get a 51% hashing oligopoly, and for the people making business decisions on if they want to spend a billion dollars doing so they will look at the market cap of the economy they are trying to usurp and realize its not a profitable venture.
My point is that there is also a degree of benefit in how consumer practical the mining algorithms are and thus how much less of a dramatic leap in performance custom ASICs would be. If you have algorithms that do not see the leagues of performance difference between custom hardware and general computers, your required investment for the same effective control are much higher, potentially to the point of fiscal unviability, but even if not that your margins would be slimmer and your opportunity cost would dissuade you more from doing it.
The mining superclusters of bitcoin only emerge because of how much potential revenue there is from doing so - fab a few thousand custom ASICs and you suddenly control a huge chunk of total mining power, because nobodies personal computers can even come close to competing. If you want working distributed mining everyone needs to already have viable mining hardware from the start, ie, the computer on their desk.
Re:Bitcoin Is Dead, Long Live Bitcoin
by xp3ll3d on Monday January 18, 2016 @08:53PM
(#10928406)
Ethereum is addressing this. They made sure that the algorithm was bothering by memory bandwidth, to try and make it harder to create specialised ASIC hardware.
The only time this is economically viable is when you both have a large enough economy and when your marginal hashrate gains over the swarm are significant enough to invest in.
My point is that if your algorithm is CPU / GPU favored, of course you can make specialized hardware, but as long as the performance gap isn't the multiple orders of magnitude modern bitcoin ASICs get over generic computers it takes significantly more money - and here is the key point - in relation to the value of the economy you are taking over to do so. Where it could cost 100 million to build a bitcoin miner datacenter that can immediately seize 30% of the hashing power on the network, your 100 million datacenter on an scrypt network can probably only seize 10-15% because there is much higher normalized mining participation by end users. It means it would cost you a lot more to get a 51% hashing oligopoly, and for the people making business decisions on if they want to spend a billion dollars doing so they will look at the market cap of the economy they are trying to usurp and realize its not a profitable venture.
My point is that there is also a degree of benefit in how consumer practical the mining algorithms are and thus how much less of a dramatic leap in performance custom ASICs would be. If you have algorithms that do not see the leagues of performance difference between custom hardware and general computers, your required investment for the same effective control are much higher, potentially to the point of fiscal unviability, but even if not that your margins would be slimmer and your opportunity cost would dissuade you more from doing it.
The mining superclusters of bitcoin only emerge because of how much potential revenue there is from doing so - fab a few thousand custom ASICs and you suddenly control a huge chunk of total mining power, because nobodies personal computers can even come close to competing. If you want working distributed mining everyone needs to already have viable mining hardware from the start, ie, the computer on their desk.