8 votes

Bitcoin mining's three-body problem - An analysis of the three principal forces that drive the mining industry

Posted by Deimos
Tags: cryptocurrency, china, analysis, technology, bitcoin, bitcoin mining, author.leo zhang, long read
https://www.aniccaresearch.tech/blog/bitcoin-minings-three-body-problem

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Title
Bitcoin Mining's Three Body Problem - Anicca Research अनिच्चा
Published
Jun 1 2020
Word count
5436 words

7 comments

  1. [3]
    vord
    Link
    This is why I have higher hopes for https://filecoin.io/ By tying the currency primarily to a useful good (persistent storage), instead of an arbitrary hash rate, it breaks the energy consumption...

    This is why I have higher hopes for https://filecoin.io/

    By tying the currency primarily to a useful good (persistent storage), instead of an arbitrary hash rate, it breaks the energy consumption arms race. This also means that old mining setups aren't necessarily made obsolete by new miners.

    3 votes
    1. [2]
      null_radix
      Link Parent
      Wouldn't that be true for any POS chain?

      instead of an arbitrary hash rate, it breaks the energy consumption arms race. This also means that old mining setups aren't necessarily made obsolete by new miners.

      Wouldn't that be true for any POS chain?

      1 vote
      1. vord
        Link Parent
        I hadn't looked into POS before, and it's certainly an interesting development I hadn't researched before. A cursory glance it does make me wary of it. You must get a stake in the currency to earn...

        I hadn't looked into POS before, and it's certainly an interesting development I hadn't researched before. A cursory glance it does make me wary of it. You must get a stake in the currency to earn currency, the more you have the more you earn. They even explicitly say that smaller networks are susceptible to various network takeovers by a large enough investor.

        Both POW and POS both suffer from the fact that they're essentially just another fiat currency with no inherit value, just with no central authority.

        Filecoin utilizes newer methods and ties the mining to an actual usable good: persistent storage of a user's data. It will be much closer to 'the gold standard' than existing cryptos. It will be able to be inflationary and deflationary (whereas Bitcoin is 100% deflationary).

        1 vote
  2. [4]
    Akir
    Link
    Honestly, the fact that you have to mine to create value is what I think is one of the major downfalls of cryptocurrency. If we absolutely must tie the creation of a currency to computing power,...

    Honestly, the fact that you have to mine to create value is what I think is one of the major downfalls of cryptocurrency. If we absolutely must tie the creation of a currency to computing power, then I think it would be a much better idea to tie it to research purposes - imagine a Folding@Home where every work unit you finish gives you a FoldingCoin.

    Alternatively, we could have a blockchain-based cryptocurrency without mining altogether by simply having all coins pre-owned by a central authority, but then there are problems with trust that can completely tank the entire currency.

    3 votes
    1. [2]
      vord
      Link Parent
      That already exists: it's called the USD (or any other country's currency). Or the points you get as rewards from a credit card, or miles from an airline. They are all functionally currencies with...

      simply having all coins pre-owned by a central authority, but then there are problems with trust that can completely tank the entire currency.

      That already exists: it's called the USD (or any other country's currency). Or the points you get as rewards from a credit card, or miles from an airline. They are all functionally currencies with a central authority.

      A cryptocurrency is essentially just a financial ledger being distributed in a way that makes it verifiable with no central authority. If you remove the decentralized nature of it, you've removed the entire reason it exists.

      1 vote
      1. Akir
        Link Parent
        You're missing the finer details. After the authority releases a cryptocurrency they no longer have any control over it; it's still decentralized.

        You're missing the finer details. After the authority releases a cryptocurrency they no longer have any control over it; it's still decentralized.

    2. BlindCarpenter
      Link Parent
      There is something like this. Sorry, shameless plug, nano.org It is not without its flaws, but it is my favourite crypto and it was distributed via a faucet in small amounts.

      There is something like this. Sorry, shameless plug, nano.org

      It is not without its flaws, but it is my favourite crypto and it was distributed via a faucet in small amounts.