The Bitcoin/Crypto Thread
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wrote on 24 Nov 2021, 16:29 last edited by xenon
It used to be fun! I had a mining rig in 2012 (it was just a gaming PC, but you could get coins back then). I sold all of it when I went to grad school.
Among techies there was a lot of optimism around blockchain. I haven't seen a single useful and valuable application developed in the last decade.
If it were so useful, I would have expected something by now. (And we know there’s no shortage of money or top minds)
I could be completely wrong though.
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wrote on 28 Nov 2021, 08:22 last edited by Klaus
If you have 80 min to kill, watch this.
Link to videoIt blew me away how fees in Bitcoin work: the game theoretical considerations about incentives, the potential attack vectors, the interaction with block size, the interaction with transaction frequency variability etc.
I particularly liked the considerations of how miners should behave rationally if there's a block with an absurdly high fee, e.g. how they should try to "steal" the block from another miner who has already successfully mined it. That part starts around 58:20.
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If you have 80 min to kill, watch this.
Link to videoIt blew me away how fees in Bitcoin work: the game theoretical considerations about incentives, the potential attack vectors, the interaction with block size, the interaction with transaction frequency variability etc.
I particularly liked the considerations of how miners should behave rationally if there's a block with an absurdly high fee, e.g. how they should try to "steal" the block from another miner who has already successfully mined it. That part starts around 58:20.
wrote on 29 Nov 2021, 02:39 last edited by@klaus said in The Bitcoin/Crypto Thread:
If you have 80 min to kill, watch this.
Link to videoIt blew me away how fees in Bitcoin work: the game theoretical considerations about incentives, the potential attack vectors, the interaction with block size, the interaction with transaction frequency variability etc.
I particularly liked the considerations of how miners should behave rationally if there's a block with an absurdly high fee, e.g. how they should try to "steal" the block from another miner who has already successfully mined it. That part starts around 58:20.
Very interesting video. Thanks for sharing. It’s different than a one-time game like a spectrum auction. Miners need to keep their software updated in response to the “meta game” of strategies being deployed by others.
The other factor is that it’s inherently not a fair game. Speed wins. Better equipment means better speed.
(I think today something like 95% of mining is done by 6 players).
It’ll be interesting to see when / people start ditching Bitcoin because of its technical design.
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@klaus said in The Bitcoin/Crypto Thread:
If you have 80 min to kill, watch this.
Link to videoIt blew me away how fees in Bitcoin work: the game theoretical considerations about incentives, the potential attack vectors, the interaction with block size, the interaction with transaction frequency variability etc.
I particularly liked the considerations of how miners should behave rationally if there's a block with an absurdly high fee, e.g. how they should try to "steal" the block from another miner who has already successfully mined it. That part starts around 58:20.
Very interesting video. Thanks for sharing. It’s different than a one-time game like a spectrum auction. Miners need to keep their software updated in response to the “meta game” of strategies being deployed by others.
The other factor is that it’s inherently not a fair game. Speed wins. Better equipment means better speed.
(I think today something like 95% of mining is done by 6 players).
It’ll be interesting to see when / people start ditching Bitcoin because of its technical design.
wrote on 29 Nov 2021, 06:14 last edited by@xenon said in The Bitcoin/Crypto Thread:
The other factor is that it’s inherently not a fair game. Speed wins. Better equipment means better speed.
(I think today something like 95% of mining is done by 6 players).Those who invest more gain more. What could be more fair?
Are you sure those 6 aren’t mining pools? I think it’s more distributed than that.
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wrote on 29 Nov 2021, 12:18 last edited by
Cryptocurrency miners are using compromised Google Cloud accounts for computationally-intensive mining purposes, Google has warned.
The search giant’s cybersecurity team provided details in a report published Wednesday. The so-called “Threat Horizons” report aims to provide intelligence that allows organizations to keep their cloud environments secure.
“Malicious actors were observed performing cryptocurrency mining within compromised Cloud instances,” Google wrote in an executive summary of the report.
Cryptocurrency mining is a for-profit activity that often requires large amounts of computing power, which Google Cloud customers can access at a cost. Google Cloud is a remote storage platform where customers can keep data and files off-site.
Google said 86% of 50 recently compromised Google Cloud accounts were used to perform cryptocurrency mining. In the majority of cases, cryptocurrency mining software was downloaded within 22 seconds of the account being compromised, Google said.
Around 10% of the compromised accounts were also used to conduct scans of other publicly available resources on the internet to identify vulnerable systems, while 8% of instances were used to attack other targets.
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wrote on 29 Nov 2021, 13:28 last edited by
Sound as a dollar...
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wrote on 29 Nov 2021, 13:35 last edited by
The best technology is probably secret. Once the secret is out, the value diminishes.
Link to video -
@xenon said in The Bitcoin/Crypto Thread:
The other factor is that it’s inherently not a fair game. Speed wins. Better equipment means better speed.
(I think today something like 95% of mining is done by 6 players).Those who invest more gain more. What could be more fair?
Are you sure those 6 aren’t mining pools? I think it’s more distributed than that.
wrote on 29 Nov 2021, 17:58 last edited by@klaus said in The Bitcoin/Crypto Thread:
Are you sure those 6 aren’t mining pools? I think it’s more distributed than that.
Yeah, I think I'm wrong on that. Not sure where I heard it.
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wrote on 1 Dec 2021, 14:15 last edited by
Has anyone tried staking or delegating? Ian thinking of trying delegating on The Graph…
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Has anyone tried staking or delegating? Ian thinking of trying delegating on The Graph…
wrote on 1 Dec 2021, 14:25 last edited by@lufins-dad said in The Bitcoin/Crypto Thread:
Has anyone tried staking or delegating? Ian thinking of trying delegating on The Graph…
I looked into it, but the risk I'd be taking is not clear to me.
I hate to invest in something I don't fully understand.
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@lufins-dad said in The Bitcoin/Crypto Thread:
Has anyone tried staking or delegating? Ian thinking of trying delegating on The Graph…
I looked into it, but the risk I'd be taking is not clear to me.
I hate to invest in something I don't fully understand.
wrote on 1 Dec 2021, 14:36 last edited by@klaus said in The Bitcoin/Crypto Thread:
@lufins-dad said in The Bitcoin/Crypto Thread:
Has anyone tried staking or delegating? Ian thinking of trying delegating on The Graph…
I looked into it, but the risk I'd be taking is not clear to me.
I hate to invest in something I don't fully understand.
The delegating GRT on the Graph makes a little more sense to me, but there are still elements of all of this that I am still not sure about which again is why my investment has been weekly lunch money… As of this morning I am breaking even, but that’s mostly because two of my weekly buys of Solana were at low/value prices. It still hasn’t returned to the original price I bought at…
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wrote on 1 Dec 2021, 14:39 last edited by
Got a link on that "The Graph" thing?
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wrote on 1 Dec 2021, 15:20 last edited by
@klaus said in The Bitcoin/Crypto Thread:
Got a link on that "The Graph" thing?
https://thegraphportal.com/how-to-delegate/
I’ve been tracking their price for a few weeks. Seems relatively stable with an upward trend. A good long term option to hold. As long as it’s holding, may as well put it to use… I’m just trying to figure out how much of an initial “buy” is needed. The larger the GRT the better the rewards for delegating, though there are some groups that pool their GRT.
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wrote on 1 Dec 2021, 18:42 last edited by
I understand delegation and proof of stake (POS) even less than I understand crypto itself, so I'll probably stay away out of ignorance.
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I understand delegation and proof of stake (POS) even less than I understand crypto itself, so I'll probably stay away out of ignorance.
wrote on 1 Dec 2021, 19:11 last edited by@89th Proof of stake allows the network to run more efficiently, but concentrates validation power in the hands of fewer, large entities.
Basically the trade-off is more centralization of power for efficiency.
It's the reason Bitcoin will never be a transaction network in its current form. Proof of work requires too much computation and doesn't scale well.
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@89th Proof of stake allows the network to run more efficiently, but concentrates validation power in the hands of fewer, large entities.
Basically the trade-off is more centralization of power for efficiency.
It's the reason Bitcoin will never be a transaction network in its current form. Proof of work requires too much computation and doesn't scale well.
wrote on 2 Dec 2021, 11:55 last edited by@xenon Thanks, believe it or not I kind of understood that (thanks youtube!) but I guess I'm more curious on how does an individual make money on this, per @LuFins-Dad 's angle. Guess I could go back to the youtube...
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@89th Proof of stake allows the network to run more efficiently, but concentrates validation power in the hands of fewer, large entities.
Basically the trade-off is more centralization of power for efficiency.
It's the reason Bitcoin will never be a transaction network in its current form. Proof of work requires too much computation and doesn't scale well.
wrote on 2 Dec 2021, 12:27 last edited by Klaus 12 Feb 2021, 12:41@xenon said in The Bitcoin/Crypto Thread:
@89th Proof of stake allows the network to run more efficiently, but concentrates validation power in the hands of fewer, large entities.
Basically the trade-off is more centralization of power for efficiency.
It's the reason Bitcoin will never be a transaction network in its current form. Proof of work requires too much computation and doesn't scale well.
I think that's not quite accurate.
Proof of stake doesn't make the network more efficient. It makes block validators consume (way) less energy. But it doesn't change, for instance, how many transactions can be processed per second. PoS also doesn't necessarily put validation power in the hands of fewer entities. It puts more power into the hands of those who are willing to stake more money.
Scalability doesn't have a lot to do with PoW vs PoS.
The technologies that can make blockchains scale are "layer 2" approaches such as, for Bitcoin, the "Lightning network". Their idea is to have transactions that are "peer to peer" and immediate and do not cost (relevant) fees and are not stored on the blockchain. All you need on the blockchain is a so-called "funding transaction" (you can think of this as going to an ATM to get some cash), which you can then spend on the layer 2 network using a gazillion transactions that are never stored on the blockchain.
There's a lot of misinformation about this being spread, such as this article, which, however, seems to suffer from the common "the author doesn't understand what he's writing about" problem.
You can increase the number of transactions per second stored "on chain" by smaller block times or bigger block sizes. But you could do either with both PoW or PoS. The main argument against bigger blocks or smaller block times is that the storage requirements for nodes quickly become such that "normal people" could no longer install nodes and nodes would be confined to big data centers.
There are many other scalability ideas, such as "sharding", which basically means that you split the blockchain into parts and nodes only store a subset of the full chain. PoS provides an indirect benefit here because the "51%" attack would be easier to carry out in a PoW sharding architecture.
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Just reached my first $1.00… 1% in 6 hours….
wrote on 2 Dec 2021, 22:16 last edited by@lufins-dad said in The Bitcoin/Crypto Thread:
Just reached my first $1.00… 1% in 6 hours….
Three weeks later and I’m finally in the black again. Not much, but a little. Solana took a nosedive price-wise when I first invested, and tanked even more the second week, but I stuck with my pick and my 3rd and 4th buys were at much lower prices. Now that it’s come back up, I am about 3% up. I’ll be curious to see where I am next week…
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@xenon said in The Bitcoin/Crypto Thread:
@89th Proof of stake allows the network to run more efficiently, but concentrates validation power in the hands of fewer, large entities.
Basically the trade-off is more centralization of power for efficiency.
It's the reason Bitcoin will never be a transaction network in its current form. Proof of work requires too much computation and doesn't scale well.
I think that's not quite accurate.
Proof of stake doesn't make the network more efficient. It makes block validators consume (way) less energy. But it doesn't change, for instance, how many transactions can be processed per second. PoS also doesn't necessarily put validation power in the hands of fewer entities. It puts more power into the hands of those who are willing to stake more money.
Scalability doesn't have a lot to do with PoW vs PoS.
The technologies that can make blockchains scale are "layer 2" approaches such as, for Bitcoin, the "Lightning network". Their idea is to have transactions that are "peer to peer" and immediate and do not cost (relevant) fees and are not stored on the blockchain. All you need on the blockchain is a so-called "funding transaction" (you can think of this as going to an ATM to get some cash), which you can then spend on the layer 2 network using a gazillion transactions that are never stored on the blockchain.
There's a lot of misinformation about this being spread, such as this article, which, however, seems to suffer from the common "the author doesn't understand what he's writing about" problem.
You can increase the number of transactions per second stored "on chain" by smaller block times or bigger block sizes. But you could do either with both PoW or PoS. The main argument against bigger blocks or smaller block times is that the storage requirements for nodes quickly become such that "normal people" could no longer install nodes and nodes would be confined to big data centers.
There are many other scalability ideas, such as "sharding", which basically means that you split the blockchain into parts and nodes only store a subset of the full chain. PoS provides an indirect benefit here because the "51%" attack would be easier to carry out in a PoW sharding architecture.
wrote on 3 Dec 2021, 03:17 last edited by xenon 12 Mar 2021, 05:34@klaus Helpful. I admit my understand of the technical details of crypto is not super deep - but I do try to grasp the basic factors at play. I should have been more clear when I mentioned "efficiency" - I was talking about computational (and therefore energy) efficiency.
Here's a very biased link - but it has some good examples of the changing narrative on layer 2 technologies.
It seems no one really knows for sure if L2 tech like lightning will work - and the only working solutions right now are custodial centralized nodes, which defeat the purpose of trustless/DeFi systems.
https://github.com/davidshares/Lightning-Network
This thread is (again) biased but enertaining:
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wrote on 5 Dec 2021, 12:41 last edited by
Big dip lately... could be a good time to buy crypto (at least bitcoin) at a discount