Re:Ethereum 2.0 launches
by nootropicat on Tuesday December 01, 2020 @12:16PM
(#25267201)
Discounted cash flow applies to capital like asics, but energy used for mining is instantaneous cost. When the expected revenue from mining is lower than expected power expenses mining makes zero sense.
Not necessarily, the paper itself shows motivations other than direct revenue for discovering a block (IE ability to withhold a block and selfish mining strategies).
> We also assume that miners always have space to include all available transactions.
This is also a pretty bad assumption. In reality the bitcoin mempool is almost always non-zero as bitcoin has smaller and/or less frequent blocks than many other cryptocurrencies.
>Figure 2: Illustration of Mining Gaps. Miners will only mine when the instantaneous expected reward exceeds the instantaneous cost
This makes no sense, rational actors generally consider discounted future cash flows, not just instantaneous reward. Perhaps the quality of the paper is explained by the researchers following this strategy and only working on 15th and 30th of every month (when their salaries are remitted to their bank account representing an instantaneous reward).