Mining - Bitcoin Wiki

Vitalik dropped a bombshell on us when said that "high fees make Ethereum less secure". I explored what that means, why it's true, and what it means for the future of blockchains

The source of this is: https://twitter.com/VitalikButerin/status/1285593115672358912
And in particular, he links to: https://www.cs.princeton.edu/~arvindn/publications/mining_CCS.pdf
I am: an Ethereum entrepreneur working full time on https://flowerpatch.app, an indie game
When I first read that tweet, I was really surprised. We've been thinking since the start of Bitcoin that fees would gradually become the long-term thing that sustains miners. We were told that paying miners = security for the network
Overview:
The btc whitepaper explained that the block rewards would go down, slowly over time. Ethereum is modeled on this concept too, though has no fixed cap. Then: big blocks are good, because big blocks = more fees. However, looking back at this idea now, we see that there was a fair bit of hand-waving in this transition, and a new scalability problem becomes clear:
  • Up until recently, blocks have basically always had the same value per block. It turns out that this was a very important game theory assumption!
  • As fees begin to dominate the miners' revenue, we enter into a world where some blocks are very valuable, and some blocks not so much
  • An additional problem, especially in Bitcoin, is the "exponential time variance" in block mining. Sometimes, there's just no blocks for an hour
  • Miners always have the option to "fork" a blockchain. As we start to have high variance in the value of blocks, it becomes much more logical to try to fork valuable blocks instead of building on top of them. The paper states this as: "it becomes attractive to fork a “wealthy” block to “steal” the rewards therein". You can incentivize other miners to "join in" on your theft-fork by not taking all of fee revenue (i.e. not including all the transactions), leaving some for others that wish to follow you into the dark world. The paper provides an illustration: https://i.imgur.com/I2K9QDd.jpg
  • The paper also outlines several other "bad actor" strategies that miners can use. Increasingly, as blocks become irregular, and more "evil" strategies start to creep in, this actually opens the door to further bad actors, and collusion
  • One key quote from the paper: "Without a block reward, immediately after a block is found there is zero expected reward for mining but nonzero electricity cost, making it unprofitable for any miner to mine." — this leads to another class of game theory issues, where miners have no reason to start mining until transactions start to pile up, but still have to pay electricity fees. The world has changed since the btc whitepaper: various schemes for mining multiple currencies at once, or quickly switching to alternate networks, become available. Miners may choose to switch off their equipment, or switch networks for a while, instead of waiting for transactions to pile up. They call this phenomenon "mining gaps"
Their conclusion:
Impact on Bitcoin security. If any of the deviant mining strategies we explore were to be deployed, the impact on Bitcoin’s security would be serious. At best, the block chain will have a significant fraction of stale or orphaned blocks due to constant forks, making 51% attacks much easier and increasing the transaction confirmation time. At worst, consensus will break down due to block withholding or increasingly aggressive undercutting.
How this affects Ethereum:
  • Ethereum has, like Bitcoin, been slowly reducing its block rewards
  • Today, as Vitalik said, we had fees make up 40-50% of the block rewards
  • This actually introduces a new scalability issue — if we increase the blocksize by 4, even if the network could handle that, we could have a situation where fees make up 200% of the block reward (50% x 4). This would start to seriously undercut Ethereum's security, as the tweet alluded
  • This issue is not purely hypothetical, but could really happen, if fees hit a sustained 100-300Gwei — on today's eth1 network! Even without extra blockspace! We could start seeing these mining strategies appearing soon
How we fix this:
  • As Vitalik mentioned, EIP-1559 does largely solve this issue. That's all the reason we need to include this EIP. Burning fees is the key to fixing the game theory. But if nothing else, you can achieve a 0% inflation rate while still issuing block rewards, as long as enough eth is burned
  • ETH2 is not susceptible to these issues, because mining rewards are shared, rather than adversarial. The years of game theory research were worth it
What happens with Bitcoin:
Well, this probably won't be an issue for quite a while, because BTC's rewards will only slowly dwindle over the next 100 years. However, they have a strict policy around this. BTC was always meant to have a totally fixed cap, and that's a big part of their "digital gold" narrative. What happens if the price of BTC tanks while the network is at capacity and has high fee revenue? They could start seeing issues pretty soon, especially with the abundance of other coins using the same mining hardware. There's already a fair bit of miners that jump between BTC/BCH/BSV based on profitability, so the "mining gaps" we discussed earlier could become more prevalent
submitted by hugelung to ethereum [link] [comments]

To Vitalik and other ETH Devs, GPU Miners need you and you need GPU Miners (PoW/ProgPoW)

This is directed towards u/nickjohnson, u/vbuterin, u/5chdn and other ETH Devs.

Edit: Proof of ProgPoW: https://gangnam.wattpool.net/#/account/0x445c466856266f8a609f87fdc6b0aaeb274d203f
Initial testing is seeing 8.8-10.15mh/s on RX480 and 3.8-4mh/s on RX460. Will include write-up soon, Newest ETH-Miner release!

Let me start this by saying, I mined my first BTC before it was even $100 or well known. BTC Mined. That was my first foray into the PoW mining scene. I had a lot a fun doing so. I enjoy building computers, testing equipment, fixing problems. It's literally my everyday job as an IT Hardware Analyst for a company.

I had to put down my mining on GPU dreams due to ASICs overtaking the networks of both BTC and LTC. I gave up on crypto as a hobby. Why bother? I don't want an ASIC in my house. There's no fun in tuning an ASIC, cannot change out components, upgrade it, etc. Then in 2017 I heard a whisper of GPU mineable coin that was ASIC resistant. It was called Ethereum. It was posed to be the next "Apple" with great innovations. At first I was beset by previous failures of GPU mineable coins getting overtaken by ASICs. Eventually with some discussion to my friend we built our first GPU mining rig in June of 2017. I got into Ethereum by mining it.

Now ASICs run rampant through most of the top 100 Cryptocurrencies. The current outlook, regardless of the bear-market pricing, looks bleak. I want to appeal to Vitalik, Nick, and the other Ethereum developers. It was GPU miners you had in mind when you created the Ethereum network and not ASICs. Vitalik made the best effort of a ASIC-Resistant algorithm. It latest for years but it's a cat and mouse game. Continued development of ASIC-Resistant algorithms needs to continue, not fall by the wayside. u/AndLan u/ohgodagirl, Mr If, and others have poured non-paid work into ProgPoW and getting it working on the Ethereum network because they want to see Ethereum succeed.

ASICs are now on the network, ProgPoW is a solution, and we need YOU DEVELOPERS, To stand with US, THE MINERS! Together lets push Ethereum forward to #1!

The Developers and GPU Miners need a symbiotic relationship. GPU Miners are NOT against you! You should not be against us! We need to stand together to make Ethereum strong and succeed, not become Bitcoin, which as even in Ethereum's whitepaper you understood it became fairly centralized.
However, this mining algorithm is vulnerable to two forms of centralization. First, the mining ecosystem has come to be dominated by ASICs (application-specific integrated circuits), computer chips designed for, and therefore thousands of times more efficient at, the specific task of Bitcoin mining. This means that Bitcoin mining is no longer a highly decentralized and egalitarian pursuit, requiring millions of dollars of capital to effectively participate in.

In regards to Centralization Mr If, made an excellent argument last Dev meeting, for ProgPoW which I shall reiterate/paraphrase here for everyone on Reddit.

PoW is geared towards industries of scale. This is why ASICs typically become the dominate force, because the ASIC manufactures have the capital, investment, and industry to produce them at a low cost. Thus they reap the PoW rewards. Hence why all PoW tends to go towards ASIC. They can decide to sell ASIC and recoup cost plus profit or keep mining with that equipment. Making ASICs egalitarian. ASIC manufactures decide, not the miner communities, what they do with the ASICs. You pay to play and you must be first.
ProgPoW takes the same approach but changes who the industry is, instead of Bitmain/Innosilicon it is AMD/Nvidia. These two companies are industrial level manufactures and have the ability to produce on a scale to support PoW(Just look at all the overstock of Nvidia 1000 GPUs). In this sense we are trading one(ASICs) for another (ASIC-GPUs). We as PoW miners must use Nvidia/AMD GPUs to support the network. Because it is the commodity hardware mass available to everyone. ASICs ARE NOT commodity hardware and ARE NOT mass available to everyone. Changing from Eth-hash to ProgPoW changes the players in the game and chooses the lesser two evils (AMD/Nvidia).

ProgPoW is not stricitly an Algorithm to replace Eth-hash but a has various "buttons" and "knobs" to tune. hence why its called Programmable! Ill let an Eth-miner Dev explain it...
-Andrea LanFranchi (EthMiner Dev)
ProgPoW is not strictly an Algo, it is a finite set of basic operations. ProgPoW is to be considered more of a process which creates variants of the algo every specified interval. Due to this there is no concept of ProgPoW as an immutable algo like Eth-hash. It tune-able and can dial various "knobs" that allow the creation of large number "definition sets" which again due to the deterministic randomness create an infinite number of algo changes.
ProgPoW creates a new search kernel every 50 blocks. Every 50 . blocks the gpu receives a completely new and different kernel from the previous which causes hashrate to change. In ProgPoW there is no fixed and constant hashrate for GPUs. You have to take into account averages across multiple periods to get the best out of the hardware. Variances are from 8-9%.

I personally supported the Network at $400, $180, $1400 and still support it now $100. I supported throughout the uncertainty of the Iceage and delays. Ethereum is still a PoW coin! ONE OF THE BEST! It's what made ethereum great! The project has excellent idea's of smart contracts and Dapps. On top of all is a massive GPU networking supporting it. Throughout 2017 there were no ASICs(That we know of) yet the ethereum network grew. What helped make Ethereum blossom was the miners and the mining community.

I am personally invested into Ethereum want to see it succeed, I'm personally invested in PoW GPU mining, and want to see it succeed. I will invest my own time and money, being a GPU miner, into seeing that ProgPoW testnet gets fully scrutinized, put through it's paces to ensure that it is a fit for Ethereum and minimize problems. I plead, beg, and invite all other GPU miners to do so. If we want change we as miners must show through hashpower on the testnet, that we are pushing forward with ProgPoW. Throw a single GPU, a Rig, whatever you can spare or muster for ProgPoW testnet.

I can and am more than willing to help anyone setup the necessary files, miners, etc needed to get mining on the test network.
Right now you can download the ProgPoW Miner(Updates are constant) And Ethermine is in full support.
Ethminer -P stratum://(ProgPoW Test Address)[[email protected]](mailto:[email protected]):4444 -A progpow

Let's make a Decision together on ProgPoW. Miners are in majority support of ProgPoW and 100% support of kicking ASICs of the network(Look at Ethermine's twitter poll). GPU miners supported you, helped build your network, not investors, not ICOs. At the very heart of Ethereum beats the GPU. Operating that GPU is a typically an enthusiast, hobby miner, and a believer in Crypto.

*Edit:*PoW is the known best way to distribute token "fairly", yet everyone hates it and wants PoS? What happens when large ASIC manufacture and centralized parties mining with ASICs earn more tokens than anyone else? Wouldn't that lead to centralization in PoS? Ethereum is on PoW BECAUSE it needs it! And because Ethereum needs PoW, it needs GPU miners, and to stay decentralized to PoS and in PoS it needs to keep GPUs miners on board.

Vitalik, Nick, and others, a time-line needs to be set, ProgPoW needs to be in the Agenda continually, discussed throughly, until it's launched on the main network. I will personally come chat, debate ideas, with any of you! Civil discussions are important!







submitted by Xazax310 to ethereum [link] [comments]

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