Hello all,
Apologies for the lengthy submit, however I am simply performing some thought experiments and this was one among them. I haven’t got sufficient information in regards to the mining aspect of BTC to undergo with this, however my query is just about the title and I might prefer to see what others assume and hopefully some reasonings on why this is not a problem.
Beneath are some assumptions behind the reasoning of this thought. I perceive the probabilities are extremely low for all of this stuff taking place, however I am nonetheless curious to know and I feel it might be a very good dialogue. I am additionally conscious of the problem adjustment, per level 4, however bear with me. So, I am assuming:
1. BTC worth stays low/suppressed
2. Miners get priced out resulting from unprofitability
3. So much (and I imply lots) of miners cease mining inside a short while horizon to forestall additional losses (i.e. a number of massive mining swimming pools cease mining)
4. A lot in order that there are far too many blocks till the subsequent problem adjustment
5. Now there are a fraction of the miners left on the community tasked with fixing blocks, however the hash charge has been lowered closely, leading to a disproportioned problem degree to hash charge
6. Blocks are then solved extremely slowly and require a heavy quantity of power enter and value to unravel, nonetheless leading to a possible loss (even when we assume miners would obtain the next subsidy)
1. Stated one other approach, I am assuming that though much less miners can be entitled to extra of the block rewards (aka would make it extra worthwhile for them), this improve in rewards is offset by the massive improve in price to unravel the block, eradicating any extra profitability and protecting them in a loss place
This then leads me to a couple query:
1. What the title is asking
2. Is the mining problem adjustment calculation weighted extra in the direction of the close to time period and wouldn’t it assist remedy this difficulty (after slowly fixing the remaining blocks properly above the specified common 10 minute blocktime)?
1. I might admire any good sources on studying in regards to the problem adjustment
3. Can one thing like this be mitigated?
4. Is it crucially vital for the common block to be solved each 10 minutes? What occurs if grew to become one block per hour or worse than that?
1. I might assume that is vital because it helps protect the safety of the community and to maintain the prices to assault the community excessive by way of double spending or making an extended manipulated chain
That is the extent of my ideas and questions. I am no professional (in all probability clear to a few of you haha), however needed to ask anyway. Thanks!
you’ll probs get answers quicker at r/bitcoinbeginners
https://en.bitcoin.it/wiki/Difficulty
https://en.bitcoin.it/wiki/Mining
No. Bitcoin won’t fail.
> A lot (and I mean a lot) of miners stop mining within a short time horizon
Why so vague?
How many, and how short the time horizon, and precisely what would cause this?
The Bitcoin mining difficulty adjustment mechanism is designed to operate within reasonable bounds. You have deliberately avoided specific numbers
> Can something like this be mitigated?
Definitely. It’s a serious problem which has been unsolved for 14 years, just waiting for you to turn up and fix it
> any good resources on learning about the difficulty adjustment
https://github.com/bitcoin/bitcoin/blob/master/src/pow.cpp
Price is what it is. No need to editorialize your own biases into it. Suppressed, manipulated, pumped, whatever. Doesn’t matter. It’s the same market price, roughly, for everyone, buyers and sellers.
Pools don’t mine. Miners mine. They can stop and leave and many do. Some might very soon. Block interval will increase. But eventually difficulty will decrease at the adjustment point. It will be a proportional decrease but not to exceed max. Ten minute interval isn’t crucial for anything. Transactions will be more expensive and some things will be delayed. For example 3 block deposit wait time might be 3 hours before traders can sell their deposited coins, instead of 30 min.
Cost to attack is still high as long as miners use electricity. Double spending is not possible. Making secret alternate chains would be still quite expensive. Unless we are talking complete death spiral collapse. Then bitcoin is done. No one wants a coin that can be frontrun by one S9.
A lot of these larger miners have over leveraged themselves by taking loans to expand. As they expand the difficulty adjustment kicks in and makes it harder. If miners decrease difficulty adjustment kicks in again and makes it easier.
Two ends of the spectrum…huge industrial miners all the way to single home based ASICs
>4. So much so that there are far too many blocks until the next difficulty adjustment
There’re always 2016 blocks between difficulty adjustments. So it takes on average 2 weeks.
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>6. Blocks are then solved incredibly slowly and require a heavy amount of energy input and cost to solve, still resulting in a potential loss (even if we assume miners would receive a higher subsidy)
The amount of energy input to solve a block actually stays the same on average. It’s just that this amount of energy is distributed over less miners that are still active. So the energy per miner is more, but the rewards per miner are proportionally more as well. So there’s not really a problem.
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>a. …removing any additional profitability and keeping them in a loss position
You’re assuming all miners are either at loss or in profit. The reality is that they are all different entities and some will be in a loss while others are still making profit. Therefore the miners will gradually stop mining and the difficulty will have time to adjust.
You assumption that everybody will stop mining all at once, or that everybody is at a loss all at once is not realistic.
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>This then leads me to a few question:
>
>1. What the title is asking
Answer to the title is no, since the difficulty will adjust.
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>3. Can something like this be mitigated?
I don’t think it has to, as there’s no real problem.
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>4. Is it crucially important for the average block to be solved every 10 minutes? What happens if became one block per hour or worse than that?
It’s not crucially important. When China banned mining a lot of miners stopped mining for a while and it had no real consequences for Bitcoin whatsoever.
If it takes longer to solve a block it’ll take longer before transactions are confirmed, but that’s about it.
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>I would think this is important as it helps preserve the security of the network and to keep the costs to attack the network high via double spending or making a longer manipulated chain
You’re assuming that the block times go from 10 minutes to more than 60 minutes. Which is completely unrealistic. More than 80% of miners need to stop mining before this happens.
Professional miners will still mine even if they mine at a loss because of sunk costs and contracts with energy companies (not mining would mean an even greater loss). They will only stop mining if this is the most optimal solution. Usually this means they are bankrupt and there’s no other solution than to stop mining. It’s just completely unrealistic for 80% of miners to go bankrupt in a time period of 14 days.
Furthermore, even if 80% of miners became bankrupt, this would mean mining equipment became so dirt cheap that other’s will start mining. There are already several big miners that have become bankrupt in the last month. But because mining equipment becomes cheap when BTC prices are low, the still active miners have increased the hashrate even more, instead of it decreasing. It’s a self regulating system.