Received: from sog-mx-4.v43.ch3.sourceforge.com ([172.29.43.194] helo=mx.sourceforge.net) by sfs-ml-4.v29.ch3.sourceforge.com with esmtp (Exim 4.76) (envelope-from ) id 1Xi9Eg-0001xn-5g for bitcoin-development@lists.sourceforge.net; Sat, 25 Oct 2014 21:50:58 +0000 Received-SPF: pass (sog-mx-4.v43.ch3.sourceforge.com: domain of gmail.com designates 209.85.215.49 as permitted sender) client-ip=209.85.215.49; envelope-from=melvincarvalho@gmail.com; helo=mail-la0-f49.google.com; Received: from mail-la0-f49.google.com ([209.85.215.49]) by sog-mx-4.v43.ch3.sourceforge.com with esmtps (TLSv1:RC4-SHA:128) (Exim 4.76) id 1Xi9Ee-0001vI-4b for bitcoin-development@lists.sourceforge.net; Sat, 25 Oct 2014 21:50:58 +0000 Received: by mail-la0-f49.google.com with SMTP id gf13so3035544lab.36 for ; Sat, 25 Oct 2014 14:50:49 -0700 (PDT) MIME-Version: 1.0 X-Received: by 10.112.137.39 with SMTP id qf7mr13058305lbb.47.1414273849379; Sat, 25 Oct 2014 14:50:49 -0700 (PDT) Received: by 10.112.1.234 with HTTP; Sat, 25 Oct 2014 14:50:49 -0700 (PDT) In-Reply-To: References: Date: Sat, 25 Oct 2014 23:50:49 +0200 Message-ID: From: Melvin Carvalho To: Alex Mizrahi Content-Type: multipart/alternative; boundary=089e011609cc6850a20506464a03 X-Spam-Score: -0.6 (/) X-Spam-Report: Spam Filtering performed by mx.sourceforge.net. See http://spamassassin.org/tag/ for more details. -1.5 SPF_CHECK_PASS SPF reports sender host as permitted sender for sender-domain 0.0 FREEMAIL_FROM Sender email is commonly abused enduser mail provider (melvincarvalho[at]gmail.com) -0.0 SPF_PASS SPF: sender matches SPF record 1.0 HTML_MESSAGE BODY: HTML included in message -0.1 DKIM_VALID_AU Message has a valid DKIM or DK signature from author's domain 0.1 DKIM_SIGNED Message has a DKIM or DK signature, not necessarily valid -0.1 DKIM_VALID Message has at least one valid DKIM or DK signature X-Headers-End: 1Xi9Ee-0001vI-4b Cc: Bitcoin Dev Subject: Re: [Bitcoin-development] death by halving X-BeenThere: bitcoin-development@lists.sourceforge.net X-Mailman-Version: 2.1.9 Precedence: list List-Id: List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Sat, 25 Oct 2014 21:50:58 -0000 --089e011609cc6850a20506464a03 Content-Type: text/plain; charset=UTF-8 On 25 October 2014 21:53, Alex Mizrahi wrote: > > We had a halving, and it was a non-event. >> Is there some reason to believe next time will be different? >> > > Yes. > > When the market is rapidly growing, margins can be relatively high because > of limited amounts of capital being invested, or introduction of more > efficient technologies. > > However, we should expect market to become more mature with time, and a > mature market will result in lower margins. > The halving can do much more damage when margins are relatively small. > > Besides that, there is a difference in ecosystem maturity: > > 1. Back in 2012, miners weren't so focused on profits, as Bitcoin was > highly experimental: some were mining for the hell of it (it was a novelty > thing back then), others wanted to secure the network, others did it > because it was hard to obtain bitcoins by other means. But now miners are > mostly profit-motivated: they buy expensive dedicated mining equipment and > want to maximize profits. As you might know, at one point ghash.io > reached 50% hashrate, and miners didn't care about it enough to switch to a > different pool. > > 2. Back in 2012, we didn't have multipools. Multipools automatically > switches between mining different alt-chains to maximize miners' profits. > Miners who use multipools do not care how their hashrate is used as long as > they profit off it. > Particularly, check https://nicehash.com/ -- you can easily buy hashrate > to attack a smaller alt-coin, for example. > > If the halving will result in a significant hashrate drop (and we did > observe hashrate drop in 2012, although it wasn't that big), it might be > possible to buy enough hashpower to attack Bitcoin. > This is a good point, imho. Miner sophistication has increased drastically in 2 years. Sites like ( http://www.coinwarz.com/ ) can heavily influence mining, 1-2 orders of magnitude on significant levels of hashing. I think this is more prevalent with scrypt than sha256, litecoin is set to half reward in 9 months, and it will be interesting to observe what happens there. > > > > ------------------------------------------------------------------------------ > > _______________________________________________ > Bitcoin-development mailing list > Bitcoin-development@lists.sourceforge.net > https://lists.sourceforge.net/lists/listinfo/bitcoin-development > > --089e011609cc6850a20506464a03 Content-Type: text/html; charset=UTF-8 Content-Transfer-Encoding: quoted-printable


On 25 October 2014 21:53, Alex Mizrahi <alex.mizrahi@gmail.com> wrote:

We had a halving, and it was a non-event.
Is there some reason= to believe next time will be different?

<= /div>
Yes.

When the market is rapidly g= rowing, margins can be relatively high because of limited amounts of capita= l being invested, or introduction of more efficient technologies.

However, we should expect market to become more mature with= time, and a mature market will result in lower margins.
The halv= ing can do much more damage when margins are relatively small.
Besides that, there is a difference in ecosystem maturity:


2. Back in 2012, we didn't have multipools. = Multipools automatically switches between mining different alt-chains to ma= ximize miners' profits. Miners who use multipools do not care how their= hashrate is used as long as they profit off it.
Particularly, ch= eck=C2=A0https://niceha= sh.com/ -- you can easily buy hashrate to attack a smaller alt-coin, fo= r example.

If the halving will result in a signifi= cant hashrate drop (and we did observe hashrate drop in 2012, although it w= asn't that big), it might be possible to buy enough hashpower to attack= Bitcoin.

This is a= good point, imho.=C2=A0 Miner sophistication has increased drastically in = 2 years.=C2=A0 Sites like ( http://www= .coinwarz.com/ ) can heavily influence mining, 1-2 orders of magnitude = on significant levels of hashing.

I think this is more pr= evalent with scrypt than sha256, litecoin is set to half reward in 9 months= , and it will be interesting to observe what happens there.
= =C2=A0


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