AE, question regarding current state of Bitcoin mining:
have you seen any discussions on hypothetical scenarios regarding hash rates becoming increasingly centralized as more corporate funding moves into the ASIC Mining space and appears to be pushing smaller "retail"/hobbyists out of the mining pools?

I was evaluating the possibility of running a few S19's but based on recent ATH in difficulty, corporate $ buying ASIC's in bulk and new machines on the horizon it would seem I'm far better suited to use those funds to buy BTC.

It lead me to ponder the question above as I can see this scenario starting to accelerate around 2024.

Been pondering the same thing

Retired FBI Agent said:

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Done7 said:

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Identifying the peak will be difficult. Please let us know once we reach the peak.

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84,100 by Thanksgiving.
208,100 by Christmas.

Edit: Priced ~62,000 at time of post.

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Oops. I meant Thanksgiving/Christmas 2022.

I'll still take it.

ThreatLevel: Midnight said:

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AE, question regarding current state of Bitcoin mining:
have you seen any discussions on hypothetical scenarios regarding hash rates becoming increasingly centralized as more corporate funding moves into the ASIC Mining space and appears to be pushing smaller "retail"/hobbyists out of the mining pools?

I was evaluating the possibility of running a few S19's but based on recent ATH in difficulty, corporate $ buying ASIC's in bulk and new machines on the horizon it would seem I'm far better suited to use those funds to buy BTC.

It lead me to ponder the question above as I can see this scenario starting to accelerate around 2024.

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🤯 Someone solved a #Bitcoin block worth 6.25 BTC with a few USB miners and a couple fans.

This is decentralization 🙌 pic.twitter.com/lJ7JFLyXwy

— Bitcoin Magazine (@BitcoinMagazine) January 24, 2022

Imagine an automated lottery ticket scratcher; you'd plug it in. NOT IF BUT WHEN YOU DO THE ADDITIONAL COMPUTE WILL:

Strengthen Bitcoin

Decentralize Bitcoin

ALLOW YOU TO:

Learn to Master Energy Transfer and use exhaust to heat home/etc

Capture new energy sources (animal waste, flare gas, renewables, etc) to reduce cost

Innovate, plugging in the miner is the easiest part, CONTRIBUTE!


The hashrate and mining difficulty continue to hit All Time High's, but don't lose your nerve. The future favors the bold. It's a scholarship to Bitcoin College. Bitcoiners don't lie cheat or steal nor tolerate those who do and we prove it every block. From the outside looking in, you can't understand it. From the inside out, you can't explain it.

BREAKING 💥 President Vladimir Putin: Russia has "some advantages" in #Bitcoin mining 🇷🇺 pic.twitter.com/sJGKx8pIMs

— Bitcoin Magazine (@BitcoinMagazine) January 26, 2022

They literally own a company Gazprom who has been mining for at least a year https://t.co/IHQsFQOLQZ

— Bitcoin Stock Video Clips 🎥🎬🎞 (@btc_stock) January 26, 2022

Yes I'm aware of the solo's that hit the BTC lotto powerball recently. I understand your answer regarding not focusing on the financials of the endeavor as the only value.
But my real concern would be the second part: using your imagination and looking toward a not so distant future where 6 large mining parties (whether they are private companies or nation states, etc.) have managed to gain lets say... 80% of the hashrate. Is it not feasible that the two largest parties could merge and flirt with a 51% hashrate?
In my opinion, almost everything (fiat, resources, power, etc.) tends toward centralization at some point depending on the time frame in reference. It's really a matter of the speed/ease of centralization occurs.

I.E. The USD is the most centralized it has ever been. Opponents to redistribution of wealth argue that you could equally distribute all money in existence today and in 10-20 years 10% of citizens would find a way to amass 40%-50% of it again.

I don't have an answer/solution to the scenario posed, I was just curious if you had seen any discussions on the topic previously.

ThreatLevel: Midnight said:

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Yes I'm aware of the solo's that hit the BTC lotto powerball recently. I understand your answer regarding not focusing on the financials of the endeavor as the only value.
But my real concern would be the second part: using your imagination and looking toward a not so distant future where 6 large mining parties (whether they are private companies or nation states, etc.) have managed to gain lets say... 80% of the hashrate. Is it not feasible that the two largest parties could merge and flirt with a 51% hashrate?
In my opinion, almost everything (fiat, resources, power, etc.) tends toward centralization at some point depending on the time frame in reference. It's really a matter of the speed/ease of centralization occurs.

I.E. The USD is the most centralized it has ever been. Opponents to redistribution of wealth argue that you could equally distribute all money in existence today and in 10-20 years 10% of citizens would find a way to amass 40%-50% of it again.

I don't have an answer/solution to the scenario posed, I was just curious if you had seen any discussions on the topic previously.

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Colluding Miners need only 1/3 of hash rate to eventually alter the chain, not 51%. Lower threshold is possible through 'selfish mining'.

Source: https://www.cs.cornell.edu/~ie53/publications/btcProcFC.pdf

There is also some evidence of a 'softer' type of collusion going on between miners in terms of creating excess fees - estimate is about 200 million a year.

Source: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3559894

BTC is still a remarkable invention, and has tons of benefits. But IMO the current setup does have some issues to be aware of.

Not only this but if bitcoin were to be concentrated and controlled it would cease being bitcoin, and a fork would appear or a BIP.

Would you rather stack Bits or Sats?

There's an argument on what to call the final denomination of bitcoin.

Whats your choice?

I think calling them Bits makes more sense and would lead to more of the uninformed understanding how a whole bitcoin can be broken down. But I don't care either way.

I should be studying 11 said:

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I think calling them Bits makes more sense and would lead to more of the uninformed understanding how a whole bitcoin can be broken down. But I don't care either way.

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I agree with this.

JUST IN - Biden admin is preparing executive action to regulate digital assets such as #Bitcoin as a "matter of national security," Barron’s reports.

— Disclose.tv (@disclosetv) January 27, 2022

will25u said:

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JUST IN - Biden admin is preparing executive action to regulate digital assets such as #Bitcoin as a "matter of national security," Barron’s reports.

— Disclose.tv (@disclosetv) January 27, 2022

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Good news. It seems like the ultimate "sell the rumor, buy the news" event.

ac04 said:

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shockingly, the actual article isn't anywhere near as scary as that headline makes it sound

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Exactly, very click baity headline (by design of course)

I should be studying 11 said:

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I think calling them Bits makes more sense and would lead to more of the uninformed understanding how a whole bitcoin can be broken down. But I don't care either way.

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I agree as well. Purists/maxis will likely favor Satoshis but if broader adoption is the end goal then I believe the bits nomenclature is more intuitive to the general uninformed demographic who likely won't take the time to make the connection between the Sat unit being a nod to Satoshi.
Might be more of an homage to call a larger qty of BTC holding (100, 1000, 1mil) a Nakamoto

ac04 said:

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shockingly, the actual article isn't anywhere near as scary as that headline makes it sound

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Yes! Having a cohesive regulatory framework on digital assets could be a really, really good thing for the space. Most people want to play by the rules, they just want to know what the rules are. Still a great chance for the US to lead in this space.

I'm sure the 3 big takeaways will be
1) requiring KYC, full blown tax reporting by all exchanges so the IRS can make the "fat cats" pay their fair share
2) balance sheets / backing transparency to limit/control stablecoins until the FedCoin comes out
3) either throttle APY earnings down to that of typical savings accounts or levy a fee so the traditional banks and gov get their piece of the pie on the front end as well as the taxation piece on the backside. Double dip

Maybe some doom and gloom posturing about BTC to drive price down so TPTB can establish/increase positions as desired.

ac04 said:

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shockingly, the actual article isn't anywhere near as scary as that headline makes it sound

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Can you share a link? I can't seem to find this anywhere. Nothing on WSJ about it. Thanks.

Thanks. I was being lazy and searched for it.

Gist of this so far just seems to be getting the various governmental organizations aligned on who is doing what. That actually makes sense if that is all they are doing and is expected.

The first two will probably be accepted to "protect" the space moving forward. The third is asinine (from our perspective) as it simply helps translate digital assets into legacy banking.

I hope all ecosystems and crypto enthusiasts demand preservation of two foundation pillars - decentralization and economic freedom.

Precisely the reasoning and design behind Bitcoin. We must not capitulate.

There is some irony in your comment about decentralization as a pillar while also shilling ADA and ONE any chance you get, no?

I don't disagree that those two things(decentralization and freedom) are crucial, for what it's worth.

ac04 said:

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Texas is using #bitcoin mining to bolster its energy grid.

How? As #bitcoin miners are the most reliable buyer of electricity, the state can profitability build up its infrastructure. If a surge occurs, the miners turn off/on instantly when needed!⚡️https://t.co/nxKmEwWLCo

— Documenting Bitcoin 📄 (@DocumentingBTC) January 28, 2022

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I need to read up on this more. I'm still missing how the two actually physically connect. Maybe I'm missing something obvious.

Ok, so it's a function of indirect usage of the grid then. I had it in my head they were talking about a more direct connection here for some reason.

1. I don't schill, not by any definition or connotation.
2. The conversation is primarily about BTC.
3. ADA is not centralized, especially when compared to Solana and ETH.
ONE will become more decentralized.

YouBet said:

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ac04 said:

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Texas is using #bitcoin mining to bolster its energy grid.

How? As #bitcoin miners are the most reliable buyer of electricity, the state can profitability build up its infrastructure. If a surge occurs, the miners turn off/on instantly when needed!⚡️https://t.co/nxKmEwWLCo

— Documenting Bitcoin 📄 (@DocumentingBTC) January 28, 2022

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I need to read up on this more. I'm still missing how the two actually physically connect. Maybe I'm missing something obvious.

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Miners are having to make massive investments in power infrastructure to get their facilities here. It's all over West Texas right now. Have a friend who's company is doing quite a bit of the work. With those investments, the infrastructure is in place to meet their demand, when they shut off, that power is available to be re-routed (potentially) to others in need.