Bitcoin mining efficiency and Botnets

Cathal Garvey cathalgarvey at cathalgarvey.me
Tue Oct 15 03:31:02 PDT 2013


> mining was always intended as a bootstrap, not a means unto itself...

Not so; mining is what fixes the history of transactions and protects
the integrity of the entire currency. If you can out-mine everyone
else, by even a small margin, you can rewrite recent history in
bitcoin, selectively permit transactions between other peers, cause
general havoc. The reward for mining was the bootstrap, but mining
itself is a critical part of what makes bitcoin work.

And this part is principally what's broken, because it uses a
hardware-optimisible hash.

> this is why it is useful to run a bitcoind and contribute to the
> network, even if you do not mine.
> as for contributing with a CPU or GPU it is simply not worth the
> power cost.
> buy coins and run nodes; participate in the digital economy!

I'll happily use Bitcoin as a medium of exchange in the same way I
would any currency. I just think we need to grow up and look at the
project critically; has it met its goals? No. Then like good engineers,
try again.

Bitcoin was supposed to be different:
1) It was supposed to be outside the control of any individual or
group. This is obviously failed, as mining pools have actually had to
voluntarily stop growing in order to not pass the 50% margin of
dominance over the mining pool.
2) It was supposed to be scaleable by individuals to prevent monopoly;
the old myth "if anyone looks like they'll become dominant, we'll all
fire up mining rigs and stop them!"-> does this look realistic anymore?
3) It was supposed to be a "free market currency" obeying simple supply
and demand, but there is evidence of price fixing and market
manipulation by those with enough money to pump and dump the currency
when it suits them.
4) It was supposed to be untraceable, but for architectural and simple
network-analysis reasons, it's not untraceable to a large enough
opponent. If you ask me, this is the reason the NSA hasn't just fired
up its sha256 brute-forcing rigs to out-mine everyone and destroy the
currency.

There are areas where bitcoin has succeeded. It's offering a real
alternative to credit cards and conventional banking online, and that's
great. But the political, architectural and privacy goals are a flop,
and the mining pools who control bitcoin at this point won't back the
developers if they try to fix the architecture. It's deadlocked; it
needs replacing. And, as big and awesome as bitcoin is, nobody should
every have expected us to get P2P anarchic crypto-currency right the
first time.

On Tue, 15 Oct 2013 03:16:55 -0700
coderman <coderman at gmail.com> wrote:

> On Tue, Oct 15, 2013 at 3:03 AM, Cathal Garvey
> <cathalgarvey at cathalgarvey.me> wrote:
> >....
> > People focus too much on the "profit" miners make, and not the
> > verifiability and anarchism they are supposed to be providing to the
> > bitcoin network.
> 
> this is why it is useful to run a bitcoind and contribute to the
> network, even if you do not mine.
> 
> as for contributing with a CPU or GPU it is simply not worth the
> power cost.
> 
> buy coins and run nodes; participate in the digital economy!
> 
> 
> 
> mining was always intended as a bootstrap, not a means unto itself...

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