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Cc: Bitcoin Dev <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] death by halving
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--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
<div dir=3D"ltr"><div class=3D"gmail_extra"><div class=3D"gmail_quote"><br>=
<blockquote class=3D"gmail_quote" style=3D"margin:0px 0px 0px 0.8ex;border-=
left-width:1px;border-left-color:rgb(204,204,204);border-left-style:solid;p=
adding-left:1ex"><div dir=3D"ltr">We had a halving, and it was a non-event.=
<div>Is there some reason to believe next time will be different?</div></di=
v></blockquote><div><br></div><div>Yes.</div><div><br></div><div>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.</div><div><br></div><div>However, we should expect market to becom=
e more mature with time, and a mature market will result in lower margins.<=
/div><div>The halving can do much more damage when margins are relatively s=
mall.</div><div><br></div><div>Besides that, there is a difference in ecosy=
stem maturity:</div><div><br></div><div>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 <a href=3D"http://ghash.io">ghash.io</a> reached 50% hashrat=
e, and miners didn't care about it enough to switch to a different pool=
.</div><div><br></div><div>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.</div><div>Particularly, ch=
eck=C2=A0<a href=3D"https://nicehash.com/">https://nicehash.com/</a> -- you=
can easily buy hashrate to attack a smaller alt-coin, for example.</div><d=
iv><br></div><div>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.</div><di=
v><br></div></div></div></div>
--047d7b2e468a7c3802050644a842--
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