Received: from sog-mx-1.v43.ch3.sourceforge.com ([172.29.43.191] helo=mx.sourceforge.net) by sfs-ml-1.v29.ch3.sourceforge.com with esmtp (Exim 4.76) (envelope-from ) id 1Xi7PY-0000bB-CG for bitcoin-development@lists.sourceforge.net; Sat, 25 Oct 2014 19:54:04 +0000 Received-SPF: pass (sog-mx-1.v43.ch3.sourceforge.com: domain of gmail.com designates 209.85.214.177 as permitted sender) client-ip=209.85.214.177; envelope-from=alex.mizrahi@gmail.com; helo=mail-ob0-f177.google.com; Received: from mail-ob0-f177.google.com ([209.85.214.177]) by sog-mx-1.v43.ch3.sourceforge.com with esmtps (TLSv1:RC4-SHA:128) (Exim 4.76) id 1Xi7PX-0000Zw-A3 for bitcoin-development@lists.sourceforge.net; Sat, 25 Oct 2014 19:54:04 +0000 Received: by mail-ob0-f177.google.com with SMTP id m8so926737obr.8 for ; Sat, 25 Oct 2014 12:53:57 -0700 (PDT) MIME-Version: 1.0 X-Received: by 10.182.79.41 with SMTP id g9mr10664610obx.14.1414266837807; Sat, 25 Oct 2014 12:53:57 -0700 (PDT) Received: by 10.202.168.142 with HTTP; Sat, 25 Oct 2014 12:53:57 -0700 (PDT) In-Reply-To: References: Date: Sat, 25 Oct 2014 22:53:57 +0300 Message-ID: From: Alex Mizrahi To: Gavin Andresen Content-Type: multipart/alternative; boundary=047d7b2e468a7c3802050644a842 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 (alex.mizrahi[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: 1Xi7PX-0000Zw-A3 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 19:54:04 -0000 --047d7b2e468a7c3802050644a842 Content-Type: text/plain; charset=UTF-8 > 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. --047d7b2e468a7c3802050644a842 Content-Type: text/html; charset=UTF-8 Content-Transfer-Encoding: quoted-printable

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

Yes.

When the m= arket is rapidly growing, margins can be relatively high because of limited= amounts of capital being invested, or introduction of more efficient techn= ologies.

However, we should expect market to becom= e more mature with time, and a mature market will result in lower margins.<= /div>
The halving can do much more damage when margins are relatively s= mall.

Besides that, there is a difference in ecosy= stem maturity:

1. Back in 2012, miners weren't= so focused on profits, as Bitcoin was highly experimental: some were minin= g for the hell of it (it was a novelty thing back then), others wanted to s= ecure 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% hashrat= e, 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 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://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.

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