MtRed Bitcoin mining pool will be shutting down

ASIC is an implementation of a circuit. They will be the fastest implementation of the logic, however they are the most expensive implementation of that logic by far.

Unlike FPGAs once logic is implemented in an ASIC the implementation is set in stone, so if there is a bug in the hardware fixing it will require producing an additional run and incur the expensive cost again.

The high cost is why FPGAs are popular for both prototyping and production units when possible as it is much cheaper for smaller quantities.

ASIC having exactly the logic necessary to target a task is why they are the most efficient at the task compared to general purpose hardware.

https://en.wikipedia.org/wiki/Application-specific_integrate...

sp332• 13 years ago

BTCguild got the lion's share of ASIC miners (so far, anyway). There's actually been some worry since that pool is approaching 51% of the network's power! That means with a malicious server, the admins could (theoretically, not saying they would) take over the entire network. They have taken some steps to reduce the number of miners in the guild, and have pledged to raise their fees if their control goes over 40%, to force miners to other pools. https://bitcointalk.org/index.php?topic=168108.0

(The way they could take over the network is by crafting a new blockchain, forging fake transactions or even claiming that they own all bitcoins. If they solve blocks faster than the rest of the network, soon their malicious chain would become longer and therefore accepted by all clients! Clients always trust the longest chain because it takes the most work to make, so you would have to control most of the mining power to fake anything for long.)

michaelbuckbee• 13 years ago

So say they did all of the malicious things you've stated, is that illegal?

lgeek• 13 years ago

> The way they could take over the network is by crafting a new blockchain, forging fake transactions or even claiming that they own all bitcoins. If they solve blocks faster than the rest of the network, soon their malicious chain would become longer and therefore accepted by all clients! Clients always trust the longest chain because it takes the most work to make, so you would have to control most of the mining power to fake anything for long.

This is incorrect. Having 51% or more of the computing power of the network doesn't allow you to replace the whole blockchain (there are checkpoints, and it gets more difficult as you want to replace a bigger part of it). You also can't forge new transactions, since transactions need to be signed by the sender.

Basically the only practical attack (assuming no serious bugs in the clients) is a double spend: they could pay out of their own wallet a sum X to a third party, the third party checks that the transaction has Y confirmations (remember, as Y grows, it gets more difficult to pull this off), they receive whatever they've bough from the third party, and then they start pushing a different and longer block not including the transaction.

betterunix• 13 years ago

If only there were a formal definition of "security" that we could work with...

eddywebs• 13 years ago

bitcoin pool shutting down are there any implications in terms of network hashrate or the overall exchange rate ?

pygy_2• 13 years ago

Individual miners will use other pools. Switching is very easy.

wmf• 13 years ago

Not really; miners will switch to other pools.

gibybo4• 13 years ago

On top of the already mentioned fact of indivudal miners switching easily, MtRed was also a comparitively small pool so it had little impact on the network as a whole.

ghshephard• 13 years ago

Would anyone like to translate this? I'm reasonably familiar with bitcoin mechanics, but I couldn't understand what had occurred based on this post.

yebyen• 13 years ago

A mining pool collects work from miners who are too small to mine on their own. In Bitcoin today, this is basically every miner (other than the bigtime dudes who already got ASICs). Time to complete a block is in the years for GPU miners. Put together hundreds of miners at varying rates and collect their work into a pool, now you can afford to pay small miners something even if their work would not approach a single block in the amount of time that you see them.

A negative buffer means they've been paying per share the going rate per share (however they've calculated that), and not some other way of calculating that avoids negative buffers (say, dynamically calculating the value of the shares based on how many buffers they touched and how much is in the buffer.)

They have missed their projections for too long and they are closing their doors to avoid paying out of pocket, rather than change to a scheme that does not depend so much on the pool's luck.

makomk2• 13 years ago

Normally, Bitcoin mining has fairly high variance - you only get paid when you find a block, and because blocks are relatively rare and found at random intervals your income varies a lot too. MtRed were what's known as a PPS pool, which meant they basically ate the variance and paid miners based on the amount of mining work they did.

The trouble is that running a PPS pool requires a huge buffer of your own funds to cover payouts during periods of bad luck, and if the buffer isn't big enough the pool will inevitably go bankrupt. It appears this has now happened to MtRed and it sounds like they only have enough funds to pay out half the money they already owe miners. (Technically, over a long enough period of time PPS pools will go bankrupt with 100% certainty no matter how big the pool buffer.)

tantalor3• 13 years ago

Would adding a fee allow them to continue?

What if they only paid out when a block was found?

adamgravitis• 13 years ago

As I've rapidly discovered, trying to calculate aggregate stats over the basis of Poisson arrivals... is a pain. To work out anything interesting, you end up studying piecewise-deterministic markov processes in more detail than you'd wish.

brador3• 13 years ago

Question: At current electricity prices, what is the total cost of mining the complete 21 million bitcoins set?

tantalor3• 13 years ago

In other words, what is the expected cost for the electricity to mine one Bitcoin?

gibybo4• 13 years ago

In the average, general case, it is slightly less than the cost of one Bitcoin. Due to the recent volatility it has been a lot less, probably about half at the moment (expect this to increase though).

gibybo4• 13 years ago

This depends on a lot of factors that change rapidly and are hard to predict. Essentially it will take until 2130 to mine all Bitcoins, regardless of how much electricity/computational power is thrown at it (there are some technical exceptions to this, but they are unlikely).

Current mining is probably using on the order of ~30-50 MW. At 10 cents kw/h (low estimate), that's ~$100k/day. It also grows with the price of Bitcoin, so it has been growing rapidly recently.

mikeash3• 13 years ago

The difficulty of mining is dynamically adjusted based on the currently available mining capacity so that bitcoins are produced at a constant rate over time no matter what.

In other words, you could mine the full set of bitcoins for virtually no electricity whatsoever if you could convince the world to abandon bitcoin mining completely, then just let a single old, slow, cheap miner run in the corner for the next 100+ years. Or you could use as much electricity as you wanted on the project by throwing more and more computational resources at it.

mkr-hn2• 13 years ago

So if someone set off a series of EMPs across the planet leaving only a handful of computers functional, the difficulty would adjust downward to account for it?

tlrobinson• 13 years ago

In a perfectly efficient mining market the cost of mining is exactly the number of Bitcoins mined, minus some small profit margin.

All profitable miners would be using the most efficient hardware, in a location where electricity is cheapest.

mtred• 13 years ago

Hey, This is RR, To anyone curious, I will be on #mtred@freenode this evening answering questions.

MtRed Bitcoin mining pool will be shutting down

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