Bitcoin Block #210 000 mined - reward halving

http://blockchain.info/block-index/322335/000000000000048b95347e83192f69cf0366076336c639f9b7228e9ba171342e

by nelse • 14 years ago

135 109 14 years ago

blockchain.info

Syssiphus• 14 years ago

NoooOOoooOOOooo!

ewillbefull2• 14 years ago

13 bitcoins in transaction fees... lots of people wanted to be in this block.

adanto6840• 14 years ago

Can you expand on this for a non bitcoin-savvy person?

tvdw• 14 years ago

Transaction fees are a 'gift' from the person doing the transaction to the person that's processing the transaction. Processing transactions is done in blocks, and the process is called 'mining' because for every processed block, the person who processes the block gets 25 BTC (before today that was 50 BTC) plus the transaction fees. Obviously 25 BTC is a lot, which is why it's so hard to mine blocks. Mining is often done in groups, and the person who mines a block has to share the profits with the rest of that group.

IIRC the entire Bitcoin community mines 6 blocks per hour, and it's the mining process that keeps Bitcoin going, because without miners there couldn't be any transactions.

harrigan• 14 years ago

For the 210,000th block some people voluntarily provided high transactions fees to reward the miner of the block: http://www.reddit.com/r/Bitcoin/comments/13xd05/idea_for_the...

narcissus2• 14 years ago

I saw that, too, and was really surprised at the fees generated. Didn't realise it was specifically for that block, though, until I saw that the one prior only got 0.53BTC :)

Evbn• 14 years ago

Translation to English from Bitcoinese?

nelse2• 14 years ago

Bitcoin are "mined" by miners across the globe who run special software on their machines/mining rigs. Each time a block was mined before block #210 000 miner earned 50 bitcoins (+transaction fees). Now, it will got only 25 bitcoins. It's part of Bitcoin specification. More reading: https://en.bitcoin.it/wiki/Mining#Reward

TazeTSchnitzel• 14 years ago

Bitcoin works by having "blocks" of data, containing transaction history (every Bitcoin transfer someone has made - it is only actually made when incorporated into a block), "mined" by a network. These blocks are mined by incrementing a value in the block of data computing a hash of it, until it falls within a certain range. The fact the hash must be in this range results in Bitcoin miners having to do millions of hash computations until they find the correct one, creating a significant level of difficulty in producing a block. This difficulty means that it is difficult to spend Bitcoins twice, since you would theoretically need to control 50% of the computing power working away at it. Each miner is competing with every other to mine the next block first. Whoever does so can add a "reward" of Bitcoins to the block of transactions, and this is how new Bitcoins are made. Over time, the Bitcoin network increases the difficulty by making the range of valid hashes narrower, so that even as more miners join the network, it will still take roughly 10 minutes until the next block is mined. What's happened in this case is that now the reward, previously 50 BTC, has been halved to 25 BTC. I should note that miners can also deduct transaction fees... anyone who makes a transaction can add a small fee. This adds an additional incentive for miners to mine a block beyond the other reward. It also means, of course, that they prioritise whoever pays the highest fee.

StavrosK• 14 years ago

I've long wondered about this, how long does it take to process a transaction if you add no fee? The fee is pretty significant (especially for microtransactions), and I'm not in a hurry, so I can wait a few minutes/hour.

TL;DR: What's the wait like if you're stingy?

IanDrake2• 14 years ago

Can anyone explain this to me?

Sorry, I never really paid attention to bitcoin. I was sure the government would have killed it by now, labeling you all criminals.

nelse2• 14 years ago

https://en.bitcoin.it/wiki/Mining#Reward

IanDrake2• 14 years ago

Thanks. I guess no one else gets the sarcasm in my initial comment.

pixelcort• 14 years ago

Looks like the exchange rate didn't fluctuate too much during this time:

http://bitcoincharts.com/charts/mtgoxUSD#rg5ztgSzbgBzm1g10zm...

I wonder what will happen to the difficulty over the next couple days:

http://bitcoin.sipa.be/

Considering the exchange rate remained stable, I expect the difficulty to halve.

nullc2• 14 years ago

I expect the moon to be made of green cheese.

... GPU mining is still fairly profitable with the half reward for ~most people (those who don't have electricity over $.15/kwh or so). My expectation is that the difficulty is currently lower than its proper equilibrium because people have opted to not purchase more GPUs while anticipating the introduction of ASIC devices.

IgorPartola• 14 years ago

Where do you get the $0.15/kWh figure from? I am curious, since this seems to make it sound like there is a stable formula for converting kWh's to BTC's. That will of course depend on the exchange rate, but I'd like to see the figures.

finnw• 14 years ago

> I expect the difficulty to halve.

Why would it? Those who have invested in dedicated mining hardware aren't going to switch it off just because the reward has halved. At least not until mining fails to pay for the electricity that goes into it (but I don't expect that will ever happen.)

jeremyjh4• 14 years ago

>(but I don't expect that will ever happen.)

You mean happen again? Like it did last summer?

pserwylo• 14 years ago

This is what I don't understand about bitcoin. With my extremely small amount of knowledge about it, I thought the idea was to make it so that the rewards for mining were aligned closely with the price of electricity.

But is this the price of electricity in the USA? What about hiring people to do mining in countries with cheaper electricity?

What about if some miners had a solar panel on the roof? Although, as I write this, it occurs to me that at some point, it would be more economical to sell the solar generated electricity back to the grid, rather than use it for mining hardware...

rfugger• 14 years ago

Difficulty would only halve if none of the miners had anticipated the block reward halving.

gojomo2• 14 years ago

Anticipation could have affected exchange rates earlier. Also affected: prior investment in rigs given expected-payback and risk levels.

But the decision "with my current fixed plant, do I mine this hour, or not?" is unaffected by anticipation. Either the expected-reward is enough to pay incremental costs, or not.

The expected reward for the same hashing power is now half what it was. Surely, some marginal miners who were only slightly profitable before are now non-profitable. It may take them a while to notice, but when they do, they're likely to drop out. But this is far from half of the mining capacity, and other rigs that are still profitable at the new reward rate are still coming online.

I expect difficulty to trend down a bit in the very short term... but not by half, and not for long as lower-power rigs continue to come online.

debacle4• 14 years ago

What might this do to the acceptance of bitcoin? In an article yesterday, someone mentioned in the comments that it was no longer financially viable to make money from mining, I would assume that this would make it doubly so. If that is the case, will there be required transaction fees for processing transactions, and how will that effect the price of BTC?

DennisP• 14 years ago

Transaction fees will be one factor, and are already built in. Pay a transaction fee and your transaction gets processed faster.

But also, miners who can't be profitable anymore will drop out. As they do, the mining difficulty will decrease until mining becomes viable again. On the other hand, the first special purpose mining ASICs are starting to be offered, and people with those will be able to mine more efficiently.

I'm not expecting the bitcoin price to change significantly, since I figure it's determined more by the demand for bitcoins than by production costs. Looking forward to seeing whether that's correct.

mrb2• 14 years ago

This person is misinformed. Mining is still quite profitable to many of us. Eg. each one of my Cairnsmore1 FPGA boards makes about $43/month, after the halving. Before the halving, they made $86/month. I paid $640 for each one. Electrical cost for one of them (40W) is $2.90/month at the worldwide average rate of $0.10/kWh.

debacle4• 14 years ago

So it takes the better part of a year to make your money back?

What kind of money do you make on transaction fees?

graue5• 14 years ago

This sounds like good business. Any links on getting started? I'm especially curious about the legal aspects like how you report mined-Bitcoin income when you do taxes.

lectrick3• 14 years ago

1) GPU mining is still profitable, if your power is cheap.

2) FPGA mining is still plenty profitable (I'm making, eh, 20BTC a day or so? And already paid for my hardware)

3) ASIC, coming soon, will change everything again, but keep it profitable

kylec• 14 years ago

The fireworks and sound were extremely annoying. I'm not used to web pages making noise on my iPhone and was unprepared for it.

duiker101• 14 years ago

Nobody is, that's why it's usually pissing everyone. A "Party" button might have done a better job.

jonny_eh• 14 years ago

The animation is fine, but add a pre-selected mute button for the audio, and a stop button for the animation.

ShawnBird• 14 years ago

Some kind of fuse or something to show what was about to happen with a 'stop' button might have been better. I don't think anyone would click a 'party' button.

kaiuhl• 14 years ago

May I suggest a bookmarklet I created called PARTYMODE?

http://wenthiking.com/partymode

win_ini• 14 years ago

Oh, you mean like this?

http://www.plasma2002.com/epb/

piuk• 14 years ago

Sorry, it was meant to be a bit of fun and I wasn't expecting it to get on HN front page (developer).

flog• 14 years ago

How dare you have fun on your website. Hacker News users are super serious, busy, important startup people. You've just disrupted my zen flow for my super productive day.

cmelbye• 14 years ago

It's just for fun...

frozenport• 14 years ago

needs more <blink> tag

motters• 14 years ago

Bitcoin is looking increasingly less practical. The size of the block chain is becoming massive. Recently I tried downloading the official client, and after 2.8GB of downloading with the progress bar only about half way through I gave up. If Bitcoin becomes more popular in future the block chain really isn't going to scale well, and that's going to result in a more centralized system in which there are fewer block chain "banks".

ch0wn• 14 years ago

This is a fixable problem. BIP 0037[0] for example tries to mitigate the size issue with bloom filters, so you no longer need to download the complete block chain to be able to verify transactions.

[0] https://en.bitcoin.it/wiki/BIP_0037

narcissus2• 14 years ago

There's already a couple of ways around this. One is the 'online wallet' set up, where someone already has the complete block chain online, the other is the bootstrap approach, whereby although you still download the entire chain, you can do it a lot more quickly via Bittorrent or the like.

But generally, I imagine most people would go with the online wallet approach if they're not comfortable with the drive space requirements.

I also believe that it is possible (theoretically, at least) to essentially just start somewhere further in the chain, in a way. Having said that, that would probably remove you from the option to mine at the same time. Maybe?

bencoder• 14 years ago

Hard drive and network cost per gigabyte is always falling, and much faster than the blockchain is increasing, so it's not expected this will be a huge problem. But what you say is true that it will "centralise" more in a sense - but the barriers to entry will still be much smaller than any other financial institution so there will likely be many groups still involved with processing the block chain.

If it's just the download time that's bothering you, try the electrum client: http://electrum.ecdsa.org/

It uses a remote blockchain so that you don't have to sync with the network. But you control the wallet (the private keys that let you spend the coins) so it doesn't suffer from the problems of the online hosted wallets where you are not in control of your coins.

graue5• 14 years ago

However, using Electrum entails putting significant trust in the third party that hosts the blockchain for you (and it's not clearly identified on the Electrum website who that is). See past discussion: https://news.ycombinator.com/item?id=4836269

If I were going to trust a third party to begin with, I'd just go with a hosted wallet like Coinbase. They seem more reputable to me than whoever's behind the Electrum project.

donpdonp• 14 years ago

Efficiency in syncing the blockchain appears to be the number one priority of the bitcoin client developers right now. The next release, 0.8.0, will have major improvements in this area.

from https://bitcoinfoundation.org/blog/?p=16 "new features are being added to the protocol to support alternative implementations– next major release of bitcoind/Bitcoin-Qt (version 0.8) should support for “bloom filters” to get just the transactions relevant to your wallet"

"...optimize transaction storage so validating transactions requires much less disk access and memory..."

pkulak• 14 years ago

Several gigs may be prohibitive for an end user, but not for anyone who wants to set up a server. How many people run their own email servers any more? Spam control and all the security and other BS is a giant PITA. That doesn't mean, however, that there isn't still Hotmail, Gmail and Yahoo. Email is not centralized.

Though, I see that this is a bit different. If I had 1000 bitcoins I wouldn't want to put it on any server but my own. But, then again, I'd be pretty rich and downloading a few gigs of data wouldn't be the end of the world. ;)

celticninja• 14 years ago

exactly, if you are dealing with under 100 BTC then a webwallet will work sufficiently well for keeping your money in, however those with larger balances are more likely to not mind needing to download the entrie blockchain.

I will say that I recently wiped by HDD and re-installed everything incuding the bitcoin-qt client and it probably took me around 24 hours to download the entire blockchain, probably just shy of 210000 blocks. The first 50-70% of data took very little time at all, the last 50-30% took the lions share of the 24 hours.

downandout2• 14 years ago

I think that the sustainability issue can be managed with bloom filters etc, but you are correct. Under the current model where the entire block chain must be in the possession of every client, Bitcoin is not remotely close to sustainable. Imagine if, in order to process credit cards, you had to download transaction data for every credit card transaction in the history of credit cards.

What surprises me is that the original creators, who were obviously very intelligent, didn't anticipate this becoming a problem and create the system from the ground up to address it.

jeremyjh4• 14 years ago

They never expected anyone to actually use it.

smithzvk2• 14 years ago

So, what I don't get is why can't I, as a user, just pick how far back I want to go? Why can't some trusted party, like bitcoin.org post a their best guess for the block chain state 10 days ago. Isn't that sufficient to determine with a high level of certainty that I am on the correct branch and that there has been no funny business in the history?

frisco• 14 years ago

You don't need to store the entire block chain in every client, even in a model where you don't want to trust a third party server. Most of the block chain is "dead," in that the coins in those transactions have changed hands since then. You can drop those transactions as they can't affect anything. Further, since the block chain contains a Merkle tree, each client only needs to have log(n) blocks on hand to validate the entire tree (i.e., provided by someone else or federated across the network).

There's a lot of compression possible that the client hasn't bothered with yet. The community expects this to eventually be a solved problem.

lectrick3• 14 years ago

1) They're working on that problem, and it's solvable without disrupting the security.

2) You can always use one of a number of online wallets who will host the blockchain for you.

sp332• 14 years ago

Some details for the curious http://www.reddit.com/r/Bitcoin/comments/13xd05/idea_for_the...

Kilimanjaro• 14 years ago

After the bitcoin debacle, it went from $30+ to $3- and I knew if it were to rebound to that same price again, that would be the perfect time to buy.

Three dollars, now I regret it.

hxc• 14 years ago

I bailed out and sold my 100 btc at 5$ and then patted myself on the back when it hit 3$. I didn't buy back in like I should have and now I am kicking myself in the ass.

javert• 14 years ago

Don't let yourself make the same mistake again. I'm thinking of buying some more soon.

mikeash• 14 years ago

Is it time to haunt eBay for cheap video cards unloaded by miners who no longer find mining worthwhile?

iso-8859-1• 14 years ago

I doubt that the Bitcoin community is large enough to affect the video card market.

cwkoss3• 14 years ago

I'd say give it another month or two. Many are still able to mine profitably if they have 4x cards per rig (dividing the "fixed (power) costs" of motherboard, psu, etc). Once ASIC mining hardware comes online, GPUs will be completely worthless for Bitcoin mining.

But if you see a deal, by all means grab it.

* Disclosure, I am the community manager for a GPU-centric Bitcoin mining pool

kristianp• 14 years ago

More like FPGAs and ASICs.

Bitcoin Block #210 000 mined - reward halving

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