Maybe I'm remembering this wrong, but isn't block difficulty adjusted depending on how much computing is thrown at the blockchain? Which means the incentive for miners would be, uh, just power through and hope your competitors fold before you do? Like the car scene in Rebel Without a Cause but boring and stupid.
this post was submitted on 21 Feb 2024
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yep! bitcoin is literally anti-efficient
It's very efficient for the people selling energy and mining equipment
Correct, the difficulty (official term) adjusts every ~14 days so that the average time between blocks remains 10 minutes or so. But the rewards of each block is constant within each halving period. So you can outcompete other miners by purchasing better hardware, or getting cheaper power, but it's a slow grinding process.
The halvening instantly halves the block reward, so everything is twice as expensive per bitcoin. If your margins are thin now, they're even thinner after the halvening.
Here's a chart of the difficulty over time (no endorsement of blockchain.com, this is public info):
Yeah, and even worse for bitcoin, when all the miner competitors fold (and the block difficulty goes down) the old mining equipment still exists. So this could be cheaply gotten by bad(er) faith people who want to fuck with the mining (for which you wouldn't need to run the rigs constantly, or in the case of some bad faith miners they are not really bound that much by budgets). Of course the utility of this is a bit low, as most you can do (I think) is disrupt parts of network for a while (which could open up some financial fraud things) but still, if I was a state looking to disrupt crypto because some of my enemies are using it, getting large mining capacity at pennies for the dollar would be a potential move (I don't think states actually see crypto at large as a threat to anything btw, which if I was a diehard gold standard anti state cypherpunk crypto bro would make me worry).
I do wonder if the price of mining will eventually fall so low that only state backed miners or fraudulent miners can still mine (mining is easy if you don't pay for your power).
This is good news for Bitcoin
my simulation predicts it with high probability
it's so dumb! IT'S SO DUMB!
it can't be that stupid, you must be explaining it wrong
On top of the libertarian agenda there is this gambling/betting agenda that is in the DNA of all this stuff. For example, immutability is a bet that the bad reasons for modifying something will always be more prominent than the good reasons. The reasons for modifying something in the future is an unanswerable question, but they've bet on an outcome. I remember reading the Arweave documentation about how they feel they can claim that it is a permanent storage solution based on tokenomics and all that shit. Just like the halvening, it's a bet that the thing will exponentially increase in relevance, usefulness, importance etc. The bet is that more people are mining bitcoin because it is becoming more important for life. It's like they're so sure of the usefulness they never bother to talk about it, instead they talk about the nitty gritty around an imaginary world where the bet has paid off.
It's like picking numbers for a lotto ticket you'll buy in 20 years time and spending the next 20 years planning how to properly manage all the money you will win.
Funnily enough, a big cheese in the early Bitcoin era is noted crazy person Luke-Jr, who released his own fork of a client that censored SatoshiDice because he is a sedevacantist Catholic who hates gambling.
I know it's obvious. I'm just marveling about a subject I've avoided thinking about for a good amount of time
No need to worry about inflation if you can’t print more money /s
Lmao.
I think that's literally the reason they designed it this way lol. At least it's been the line from as far back as I remember. Because we all know inflation is bad, so surely a strongly deflationary currency must be really good!!! It's just free value!!!!
"If inflation is bad, deflation must be good" was a notion I had when I was like 12, my dad (an economist) swiftly disabused me of that notion.
I think there's a (deliberate?) confusion about the interwar years. People know 2 things:
- the Great Depression
- hyperinflation in Wiemar Germany
They think those are connected (they are, kinda) and think that inflation caused the great Depression, when in fact it was characterized by deflation.
Back in the early days of Bitcoin there was this weird Mellon-esque view that debt==bad and that a deflationary economy would encourage savings. This is one of the many ways that Austrian economics is childish and shallow.
Another thing I've had thought about - if the gold standard is so superior, why doesn't a country base its currency on it and outcompete everyone else? If you ask that you'll inevitably get conspiracy theories about how (((they))) won'd allow it.
I've had someone try to bully me into buying Luna a couple months before it collapsed because they understood economics and I was a fool for not wanting free money and letting my vast welfare ressources get eaten by inflation. I don't think crypto can function without this narrative.
Also I'm wondering now how they square their Ponzi scheming with the popular libertarian slogan about free lunches, and I imagine the answer is something like "by not thinking about it".
I'm of the opinion that the gold standard was obsolete around the time when the railroad and the telegraph were being rolled out on a wide scale and that shiny metal fetishism was heavily responsible for the longer and deeper economic crises of the 1800s and early 1900s.
this is basically correct, yes