Return-Path: Received: from smtp1.linuxfoundation.org (smtp1.linux-foundation.org [172.17.192.35]) by mail.linuxfoundation.org (Postfix) with ESMTPS id 412A2BED for ; Wed, 9 Mar 2016 17:58:37 +0000 (UTC) X-Greylist: whitelisted by SQLgrey-1.7.6 Received: from mail-qk0-f173.google.com (mail-qk0-f173.google.com [209.85.220.173]) by smtp1.linuxfoundation.org (Postfix) with ESMTPS id 20E6D10C for ; Wed, 9 Mar 2016 17:58:35 +0000 (UTC) Received: by mail-qk0-f173.google.com with SMTP id s68so23545653qkh.3 for ; Wed, 09 Mar 2016 09:58:35 -0800 (PST) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=gmail.com; s=20120113; h=subject:to:references:cc:from:message-id:date:user-agent :mime-version:in-reply-to:content-transfer-encoding; bh=phdi+LolBeBtBnCOp1nJM+cPJw+3AVs0tb53c0xe5Lc=; b=zioA0O/STYYAYQGZu3JCeeGfjAcE9kTvFm+pAR6mpWOwbsvam+wetoLbucOvURS0si BEzV99CjR9KNJPWO1Cp1mLDBCPuw3Mi6ZRg043pT69f0FCbEoxZhAcpOPVSeeVRgZ47g NrxYyY8+5ln3QyOB5R9sSXDE3i3p377VmWGWYQIFUcpde43bhaipsexyeVYwTBkYi6jG dUly8yMgCEkEs6UMWbNVdHhE/vvDOvI0nZc8jXl6z1xBj3B3eKxuHHCp+/6D2KJeBUQq PkLiBiWFgohtaruXcRtEWEjEGk8+U59grgAlctb++QuRnh7Lwi64bt1bZSTyruumbxYW yu0g== X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=1e100.net; s=20130820; h=x-gm-message-state:subject:to:references:cc:from:message-id:date :user-agent:mime-version:in-reply-to:content-transfer-encoding; bh=phdi+LolBeBtBnCOp1nJM+cPJw+3AVs0tb53c0xe5Lc=; b=btMFYjZjHSq1p4alPU26XBwc7+gfH/nWTFY0R5RbZ3r38SvLYM+ETLz0b5MCWcMwMm u2RXDUE0U5KVkldnTq8D3SMPtMczmWik0GOR2W9wlAL2w9Wbg26i+pqmUiurjua5XCvx ghGMh/0mkacGSFUfb0e9vsoYbUOj3B04nEyBJihNOIjnzEmZCoJKKBbRnh7P13u1uybP hCQD4t8tShYP5M6jXqzlSe2IGGiUn3XyaM3KE/CaGkrQ4WKfsj956uM9BoVxLWh89gPu uN075+xoayrw1Ay/JfdqIUAnShfoKq0HmTBVJAt5T4v4BaJc8UKR9FFZOqxpqQfYJelp Vc2w== X-Gm-Message-State: AD7BkJJE89wZapi9eAzwzz3o8bxNkyr9qRrLLxvaM6PdbZzhNzdCQMKYs+WYjkfXBrPQnw== X-Received: by 10.55.78.11 with SMTP id c11mr12643950qkb.89.1457546314318; Wed, 09 Mar 2016 09:58:34 -0800 (PST) Received: from [192.168.1.104] (ool-4575fa8d.dyn.optonline.net. [69.117.250.141]) by smtp.googlemail.com with ESMTPSA id o67sm4123423qho.12.2016.03.09.09.58.32 (version=TLSv1/SSLv3 cipher=OTHER); Wed, 09 Mar 2016 09:58:32 -0800 (PST) To: Gregory Maxwell , "David A. Harding" References: <201603021456.15820.luke@dashjr.org> <20160302171418.GA5312@localhost.localdomain> <56D78E13.2050403@gmail.com> From: Paul Sztorc Message-ID: <56E0643A.8070201@gmail.com> Date: Wed, 9 Mar 2016 12:58:18 -0500 User-Agent: Mozilla/5.0 (Windows NT 6.1; WOW64; rv:38.0) Gecko/20100101 Thunderbird/38.5.1 MIME-Version: 1.0 In-Reply-To: <56D78E13.2050403@gmail.com> Content-Type: text/plain; charset=windows-1252 Content-Transfer-Encoding: quoted-printable X-Spam-Status: No, score=-2.7 required=5.0 tests=BAYES_00,DKIM_SIGNED, DKIM_VALID, DKIM_VALID_AU, FREEMAIL_FROM, RCVD_IN_DNSWL_LOW autolearn=ham version=3.3.1 X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on smtp1.linux-foundation.org X-Mailman-Approved-At: Wed, 09 Mar 2016 18:06:22 +0000 Cc: Bitcoin Dev Subject: Re: [bitcoin-dev] Hardfork to fix difficulty drop algorithm X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.12 Precedence: list List-Id: Bitcoin Development Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Wed, 09 Mar 2016 17:58:37 -0000 My recent conversations with miners revealed: * Many have made "extra-large" hardware investments recently. * Some wonder if we have just reached (or are quickly reaching) a plateau of hardware-efficiency. This would mean that hardware-investments might not be made in the critical period immediately preceding the halving. However, some good news: * For Chinese miners, power is often purchased in fixed quantities, for long-durations (of around 12 months, and these contracts -fortunately- do overlap the July halving). Because power is difficult to store, this implies that miners will *need* to mine, at all times, even at a loss. So miners may continue to mine after the halving, no matter what. On the other hand, miners can default on these contracts by simply declaring bankruptcy, at which point their equipment would be entirely unusable, by anyone, for a very long time. So the problem is less likely, but more potentially-catastrophic. Paul On 3/2/2016 8:06 PM, Paul Sztorc wrote: > > On 3/2/2016 12:53 PM, Gregory Maxwell via bitcoin-dev wrote: >> What you are proposing makes sense only if it was believed that a very= >> large difficulty drop would be very likely. >> >> This appears to be almost certainly untrue-- consider-- look how long >> ago since hashrate was 50% of what it is now, or 25% of what it is >> now-- this is strong evidence that supermajority of the hashrate is >> equipment with state of the art power efficiency. > I don't understand the relevance of this. > > In my view, we would prefer miners to invest in hardware just a mere > 2016 blocks away from the halving. Instead, they've made them too soon.= > Assuming that miners are already located in low-power-cost areas, the > difficulty will be quickly rising to compensate for "state of the art > power efficiency". > > So it will have canceled out by July. > > If anything, the more efficient miners become today, the bigger our > potential problem in July, because chip-manufacturers may have used up > all of the easy efficiency-increasing moves, such that investments do > not take place in June. > > Paul