Peter Todd [ARCHIVE] on Nostr: š Original date posted:2023-01-18 šļø Summary of this message: Discussion on ...
š
Original date posted:2023-01-18
šļø Summary of this message: Discussion on the potential consequences of a halving event in Bitcoin mining, including the possibility of significant hashing power shutdowns and fee increases.
š Original message:On Sun, Jan 01, 2023 at 11:42:50PM +1100, Alfie John wrote:
> On 31 Dec 2022, at 10:28 am, Peter Todd via bitcoin-dev <bitcoin-dev at lists.linuxfoundation.org> wrote:
> >
> >> This way:
> >>
> >> 1. system cannot be played
> >> 2. only in case of destructive halving: system waits for the recovery of network security
> >
> > The immediate danger we have with halvings is that in a competitive market,
> > profit margins tend towards marginal costs - the cost to produce an additional
> > unit of production - rather than total costs - the cost necessary to recover
> > prior and future expenses. Since the halving is a sudden shock to the system,
> > under the right conditions we could have a significant amount of hashing power
> > just barely able to afford to hash prior to the halving, resulting in all that
> > hashing power immediately having to shut down and fees increasing dramatically,
> > and likely, chaotically. Your proposal does not address that problem as it can
> > only measure difficulty prior to the halving point.
>
>
> > ... Since the halving is a sudden shock to the system
>
> Is it though? Since everyone knows of the possible outcomes, wouldn't a possible halving be priced in?
Re-read that I said. That explains why despite the halving being a forseeable
event, there's no mechanism to "price it in" when it comes to hashing power.
> > resulting in all that hashing power immediately having to shut down and fees increasing dramatically
>
> Which should cause that hashing power to come back because of this fee increases.
Right now the total reward per transaction is $63, three orders of magnitude
higher than typical fees. Sufficient fee increases to bring back hashing power
in a scenario like that would cause enormous disruption to many things,
including Lightning channels.
--
https://petertodd.org 'peter'[:-1]@petertodd.org
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šļø Summary of this message: Discussion on the potential consequences of a halving event in Bitcoin mining, including the possibility of significant hashing power shutdowns and fee increases.
š Original message:On Sun, Jan 01, 2023 at 11:42:50PM +1100, Alfie John wrote:
> On 31 Dec 2022, at 10:28 am, Peter Todd via bitcoin-dev <bitcoin-dev at lists.linuxfoundation.org> wrote:
> >
> >> This way:
> >>
> >> 1. system cannot be played
> >> 2. only in case of destructive halving: system waits for the recovery of network security
> >
> > The immediate danger we have with halvings is that in a competitive market,
> > profit margins tend towards marginal costs - the cost to produce an additional
> > unit of production - rather than total costs - the cost necessary to recover
> > prior and future expenses. Since the halving is a sudden shock to the system,
> > under the right conditions we could have a significant amount of hashing power
> > just barely able to afford to hash prior to the halving, resulting in all that
> > hashing power immediately having to shut down and fees increasing dramatically,
> > and likely, chaotically. Your proposal does not address that problem as it can
> > only measure difficulty prior to the halving point.
>
>
> > ... Since the halving is a sudden shock to the system
>
> Is it though? Since everyone knows of the possible outcomes, wouldn't a possible halving be priced in?
Re-read that I said. That explains why despite the halving being a forseeable
event, there's no mechanism to "price it in" when it comes to hashing power.
> > resulting in all that hashing power immediately having to shut down and fees increasing dramatically
>
> Which should cause that hashing power to come back because of this fee increases.
Right now the total reward per transaction is $63, three orders of magnitude
higher than typical fees. Sufficient fee increases to bring back hashing power
in a scenario like that would cause enormous disruption to many things,
including Lightning channels.
--
https://petertodd.org 'peter'[:-1]@petertodd.org
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