Mining is only profitable when the block reward and transaction fees are worth more than the costs of mining (electricity, capital costs). ETH was the only coin big enough to support all those GPU mining rigs. With ETH gone, there are too many miners and not enough valuable stuff to mine.

I'm sure this is a stupid question, but I'm going to go for it anyway: isn't Bitcoin also proof-of-work? Why isn't that where ETH miners are going?

Bitcoin mining all switched over to custom ASICs long ago, and is barely profitable even on that hardware. The GPUs that were used for Ethereum mining can't compete.

For some more background: bitcoin's POW is basically just sha256, which was trivial to port first to GPUs and then to custom hardware. That makes mining a bigger up-front investment and thus more centralized, which is why almost all later coins chose POWs that aren't easy to speed up with ASICs

Bitcoin is using a different hash function. Bitcoin uses sha, which is easy to implement more efficiently in fgpa and asic, which blows gpus out of the world.

Eth thought that was a bad thing, so chose an algorithm that was intentionally difficult to implement in asic. They thought having gpus be the most efficient platform would be more decentralized and be more one person one vote compared to asics. As a result people use gpus for eth.

Thanks. I'm curious, is there a certain class of algorithms that is generally difficult to implement in ASIC but easy to implement in a GPU?

Usually its about how much RAM it needs access to.

Password hashing algorithms (scrypt, argon2, etc) are generally designed to minimize the advantage custom hatdware gives.

> Why isn't that where ETH miners are going?

Mining BTC on a GPU isn't profitable.

You need a dedicated ASIC chip that is far more efficient at the task than a GPU if you want to hope turning a profit mining Bitcoin.

Something like this:

https://www.bitmain.com/

I'm fairly sure that Bitcoin mining just isn't as profitable to mine with a GPU -- it's more cost-effective to use an ASIC designed for that purpose.

The article gives an answer to this.

> "The only coins showing profit have no market cap or liquidity. The profit is not real."

That is, the remaining PoW derived coins are not as profitable for miners, presumably not enough to cover their margins.

Not really. https://whattomine.com/gpus

Ouch, looks like for most cards even if energy was free a miner would be looking at ~1000 days to break even. Hopefully this really does more or less end GPU mining.

Those numbers are based on $0.1/kwh electricity costs. Here in the UK the cost is around $0.4/kwh, so I don't believe any of those cards would generate any sort of profit. Basically the electricity cost is the main driver, and you'd need to check what your local cost is to evaluate this.

Of course if you are running from home generated power (e.g solar) then the equation changes, but so does the capital cost.

In winter if one uses resistive electrical heating and where heat pumps are not allowed like in some apartment blocks mining can be free as the consumed electricity just heats the home.

You would be better off spending your money on an air or ground source heat pump though...

I live in an apartment in Norway where an air heat pump is not allowed by regulations and the ground source is way too expensive even with the current electricity prices and will take years to get approval as the area is considered a historic part of the town and must be preserved.

So couple of years ago I permitted for my son to mine coins on GPU when it was cold allowing to him to earn like 2-4 Euros per day.

But then I stopped as I realized that this just promoted insanity of using proof of work in other places.

Wouldn’t an electric space heater provide more heat per watt? This isn’t a rhetorical question because I don’t know the answer. It’s just my intuition that something designed to produce heat would do that more efficiently than something designed to do computations that produces heat as a side effect.

Basically, heat is waste. A space heater is a resistor causing 0% efficient usage.

If 500 watts of electricity go into a heater or a computer, 500 watts of heat will come out, minus some light from leds and screen, some electricity on the ethernet cable, and other of these ignorable things.

If it does some usefull computation on the side, that's nice, but energy wise a 500 watt game computer is just as efficient as a 500 watt heater, if used for heating purposes.

No it's same thing. All energy eventually becomes heat and there can be no lost energy in a system. In the case of a GPU we're converting electrical energy into thermal energy, and some mechanical and sound energy due to the fans. So a GPU should just as efficient at producing heat as a space heater, it's just that the electricity goes through a few more steps first.

Of course, but what he's saying is that you don't generate currency as a side effect of running your dedicated heater. Whereas the inverse is true with mining - you generate heat as a side effect of running your mining setup. When that's desirable, it can be factored into the net cost.

If home power generation was cheaper (considering all costs) than grid generation, everybody would have a home setup.

If you have excess capacity and no way to sell it to a grid, then it might make sense to do some mining, but then you are really just recouping some of what you over spent on solar panels.

Presumably those other coins are close to an equilibrium point where more people mining them would be unprofitable. Aka if the total block rewards from other coins are 1 million dollars per month, there is no way spending 2 million per month on electricity is a good idea.

I saw that argument on twitter when talking about the energy reduction for ETH mining. Someone commented that it won't change because they will just focus their GPUs on some other coin.

TFA is pointing out that other GPU-based POW chains have become unprofitable. Partly because of the massive influx of GPUs increasing the difficulty of those chains, and partly because those coins are just not worth as much as ETH. If that's true, then lots of miners are going to be shutting down their GPUs and selling them.

Power companies are incentivized to sell power.

They will just find other buyers.

Copper companies are incentivized to sell as well, but they don’t get to pick the price. Once the price falls enough some copper mines go out of business.

The same thing happens with power companies and we get a net reduction in generation.

At a commercial level (megawatts), power companies absolutely get to pick the price.

They can’t pick a price below their marginal cost, though—that’s the problem with copper mines, and it’s a problem with power, too

Perhaps you are right about power companies wanting to sell more power (although it seems like that is not the case for the marginal kWh given all that power companies do to incentive energy efficiency for their customers).

But even so, at least that power would go to something useful (keeping buildings comfortable, purifying water, who knows what) rather than being burned in the crypto-pit.

I'm getting downvoted on my original comment, sigh HN.

> Perhaps you are right about power companies wanting to sell more power (although it seems like that is not the case for the marginal kWh given all that power companies do to incentive energy efficiency for their customers).

It is literally called a power company. They offer special rates for large customers. That alone creates a marketplace.

> But even so, at least that power would go to something useful (keeping buildings comfortable, purifying water, who knows what) rather than being burned in the crypto-pit.

Did you have a choice in where that power went to begin with? No.

"No one has the moral authority to tell you what is a good or bad use of energy (ex: watching the Kardashians)" -- https://twitter.com/danheld/status/1479135584685854729?lang=...

That tweet thread is 100% wrong. I absolutely do have the moral authority to tell everyone that burning billions of joules per day in a bank of resistive elements and then dumping the heat directly into the atmosphere is morally wrong. It's not even a tough question. It is clearly a malicious (hypothetical) act being done only to hurt others.

So if there's an unambiguous case of morally abhorrent energy use, everything else is up for debate. That tweet thread goes off the rails early, as it's clear the author is financially incentivized to not understand the position he is arguing against. So it's no surprise the argument is nonsense.

It opens a can of worms. If you start telling people how they should or should not use any form of energy, then you have to ͡° ͜ʖ ͡° at yourself first.

https://www.lynalden.com/wp-content/uploads/bitcoin-energy-c...

https://www.lynalden.com/bitcoin-energy/

I pledge to not spill 4.9 million barrels of oil into the gulf of mexico.

So you don't ever take advantage of an ICE? Fly a plane? Drive a car? Nor do you ever get a delivery to your house.

In other words, those things work because you directly or even indirectly support the system which causes those sorts of catastrophes to happen.

Isn't this just the "yet you participate in society" meme? We all can and should attempt to reduce our impact, that might mean we don't own a car, or we fly less frequently and take trains instead, perhaps even just working from home... If I need to fly from North America to Europe, I really don't have a choice. You could do it by boat, but ships are largely powered by fossil fuels too. That doesn't mean I actively support fossil fuel companies.

> then you have to ͡° ͜ʖ ͡° at yourself first

Yes, and?

It is absurd as: your website makes money from Google Adsense and therefore is a waste of power because google is profiting off people advertising crap to others.

I'd posit that your argument is ridiculous, but that doesn't make anyone else's silly by default.

Nothing wrong with having an opinion.

Nothing wrong with pointing out when that opinion is ridiculous either.

> burning billions of joules per day in a bank of resistive elements and then dumping the heat directly into the atmosphere is morally wrong.

Does this include mean computer gaming? How about watching movies? Is it morally wrong if done using computer "burning joules..."?

Just imagine the amount of compute, mechanical and human, that's spent trying to force people to watch ads that they don't want to see to convince them to buy things that they don't need.

Alternatively consider planned obsolescence. Devices are designed to break and be replaced rather than last today, as a rule. Consider just phones alone on this front. The amount of resources that consumes is unimaginable, and that goes well beyond just electricity or manpower.

Ultimately our entire society is built around the largely arbitrary expenditure of absolutely massive amounts of energy and resources to accomplish tasks that, in most cases, are not especially useful or necessary. Optimizing GDP, a goal of most all developed nations now a day, is often just a proxy for increasing waste. Buying the same phone 20 times gives a 20x boost to GDP relative to buying it once. And yet this is the metric we've chosen as a measure for progress.

In most ethical frameworks, making many people happy vastly outweighs making a few people rich. In some ethical frameworks, making people happy is the most moral thing it is possible to do.

The history of moral rectitude justifying forcing such rectitude on others is very bad.

There’s a big difference between doing something that’s maybe not the best use of resources, but still serves a purposes, even if it’s just pleasure (ex: watching the Kardashians) and doing something for no reason that makes any sense at all.

We should all be judicious with how we use our limited resources. The market often serves to incentivize that good judgement. When the market starts incentivizing waste (e.g. “cryptocurrencies”) that’s when you need to start banning things.

It's not possible to perform any action without using energy, so why not just say "No one has the moral authority to tell [me] what is a good or bad."?

The parent to your post never asserted “moral authority” around how power is used, only that they think this shift is a good thing in their view.

> at least that power would go to something useful

I consider that a moral opinion.

Ultimately it wasn’t the grandparent that asserted that proof-of-work Etherium mining wasn’t useful, it was the Etherium blockchain community themselves — which is why they have stopped doing it.

It’s not a “moral opinion” to accept someone else’s assessment of the utility of their own actions.

Is it a “moral opinion” to state a preference that crude oil is more useful when refined and injected into an ICE vehicle than if it’s burned on site in an oil well fire?

You have this backward actually, the fact that Ethereum went to great lengths to design a more power-efficient replacement for PoW (rather than, say, doing something else with their lives) shows that PoW was useful to begin with.

The fact that Ethereum went to great lengths to design a more power-efficient replacement for PoW shows that the developers of Etherium derive personal value from an engagement with a technical challenge. It does suggest but doesn't prove that any permutation of the project was/is actually useful.

Your definition of useful sucks, and you should feel really bad about that. I don't get too concerned about how you waste my oxygen, but you're making me rethink that decision.

I’m sorry to hear that you’ve become stuck in a semantic bog-hole, but amused to learn that my words are so powerful that they overwhelm your conscious agency.

My point is that it is not your (or my) right to tell anyone what a good use of power is or is not. Simply because we all consume power one way or another. Expressing an opinion is fine... we can all have one of those, but we should be considerate of pot/kettle there.

The only way for them to find other buyers is to lower prices, which benefits everyone.

I don't think that's the only way. There are other factors that go into choosing a power source. For example, they could offer cleaner power or the quantity of power available can also be factors.

More/bigger miners ==> higher competition ==> miners will require higher transaction fee's to finance their operation? Or do I misunderstand it?