Re: [bitcoin-dev] Proposal: Force to do nothing for first 9 minutes to save 90% of mining energy

[Zac Greenwood <zachgrw@gmail.com>]

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> if energy is only expended for 10% of the same duration, this money must
now be spent on hardware.

More equipment obviously increases the total energy usage.

You correctly point out that the total expenses of a miner are not just
energy but include capital expenses for equipment and operational cost for
staff, rent etc.

Actually, non-energy expenses are perhaps a much larger fraction of the
total cost than you might expect. Miners using excess waste energy such as
Chinese miners close to hydropower stations pay a near zero price for
energy and are unlikely to be bound by the price of electricity.

Unsurprisingly, miners having access to near-free electricity are
responsible for a significant share of the total energy usage of Bitcoin.
Since such energy is often waste energy from renewable sources such as
hydropower, the carbon footprint of Bitcoin is not nearly as alarming as
its energy usage implies. In fact, since mining is a race to the bottom in
terms of cost, these large miners drive out competing miners that employ
more expensive, often non-renewable sources of energy. It’s for instance
impossible to mine profitably using household-priced electricity. Looking
at it from that angle, access to renewable, near-free waste energy helps
keeping Bitcoin more green than it would otherwise be. To put it another
way: the high energy usage of the Bitcoin network indicates cheap,
otherwise wasted energy is employed.

For your proposal again this means that energy usage would not be likely to
decrease appreciably, because large miners having access to near-free
energy use the block-reward sized budget fully on equipment and other
operational expenses.

On the other hand, roughly every four years the coinbase reward halves,
which does significantly lower the miner budget, at least in terms of BTC.

Zac



On Sun, 16 May 2021 at 21:02, Karl via bitcoin-dev <
bitcoin-dev@lists.linuxfoundation.org> wrote:

> [sorry if I haven't replied to the other thread on this, I get swamped
> by email and don't catch them all]
>
> This solution is workable but it seems somewhat difficult to me at this
> time.
>
> The clock might be implementable on a peer network level by requiring
> inclusion of a transaction that was broadcast after a 9 minute delay.
>
> Usually a 50% hashrate attack is needed to reverse a transaction in
> bitcoin.  With this change, this naively appears to become a 5%
> hashrate attack, unless a second source of truth around time and order
> is added, to verify proposed histories with.
>
> A 5% hashrate attack is much harder here, because the users of mining
> pools would be mining only 10% of the time, so compromising mining
> pools would not be as useful.
>
> Historically, hashrate has increased exponentially.  This means that
> the difficulty of performing an attack, whether it is 5% or 50%, is
> still culturally infeasible because it is a multiplicative, rather
> than an exponential, change.
>
> If this approach were to be implemented, it could be important to
> consider how many block confirmations people wait for to trust their
> transaction is on the chain.  A lone powerful miner could
> intentionally fork the chain more easily by a factor of 10.  They
> would need to have hashrate that competes with a major pool to do so.
>
> > How would you prevent miners to already compute the simpler difficulty
> problem directly after the block was found and publish their solution
> directly after minute 9? We would always have many people with a finished /
> competing solution.
>
> Such a chain would have to wait a longer time to add further blocks
> and would permanently be shorter.
>
> > Your proposal won’t save any energy because it does nothing to decrease
> the budget available to mine a block (being the block reward).
>
> You are assuming this budget is directly related to energy
> expenditure, but if energy is only expended for 10% of the same
> duration, this money must now be spent on hardware.  The supply of
> bitcoin hardware is limited.
>
> In the long term, it won't be, so a 10% decrease is a stop-gap
> measure.  Additionally, in the long term, we will have quantum
> computers and AI-designed cryptography algorithms, so things will be
> different in a lot of other ways too.
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