After China's Crackdown on Bitcoin Mining, It's More Profitable For Everyone Else (cnbc.com) 81
Bitcoin mining just became easier and more profitable, reports CNBC:
The world has known for months that more than half the world's bitcoin miners would be going dark as China cracked down on mining. Now that it's happened, the bitcoin algorithm has adjusted accordingly to make sure miner productivity doesn't continue to fall off a cliff. That adjustment — which took effect early Saturday morning — also means that way more cash is going to the bitcoin miners who remain online. "This will be a revenue party for miners," said bitcoin mining engineer Brandon Arvanaghi. "They suddenly own a meaningfully larger piece of the pie, meaning they earn more bitcoin every day..."
"For the first time in the bitcoin network's history, we have a complete shutdown of mining in a targeted geographic region that affected more than 50% of the network," said Darin Feinstein, founder of Blockcap and Core Scientific. More than 50% of the hashrate — the collective computing power of miners worldwide — has dropped off the network since its market peak in May. Fewer people mining means that fewer blocks are solved each day. Typically, it takes about 10 minutes to complete a block, but Feinstein told CNBC the bitcoin network has slowed down to 14- to 19-minute block times. This is precisely why bitcoin re-calibrates every 2016 blocks, or about every two weeks, resetting how tough it is for miners to mine.
On Saturday, the bitcoin code automatically made it about 28% less difficult to mine — a historically unprecedented drop for the network — thereby restoring block times back to the optimal 10-minute window...
"We are expecting a period of much higher mining profitability for Compass Mining clients," said Whit Gibbs, CEO and founder of Compass, a bitcoin mining service provider. "We expect miners to be approximately 35% more profitable." Blockcap's Feinstein agrees. "We are expecting a revenue and profit increase for the foreseeable future. This was an unexpected gift to the network, not just on revenues but on decentralization and sustainable energy metrics."
CNBC also spoke to the former Chief Mining Officer at Greenridge Generation, the New York-based, coal-fired power plant that converted to large-scale bitcoin mining.
"Zhang estimates revenues of $29 per day for those using the latest-generation Bitmain miner, versus $22 per day prior to the change."
"For the first time in the bitcoin network's history, we have a complete shutdown of mining in a targeted geographic region that affected more than 50% of the network," said Darin Feinstein, founder of Blockcap and Core Scientific. More than 50% of the hashrate — the collective computing power of miners worldwide — has dropped off the network since its market peak in May. Fewer people mining means that fewer blocks are solved each day. Typically, it takes about 10 minutes to complete a block, but Feinstein told CNBC the bitcoin network has slowed down to 14- to 19-minute block times. This is precisely why bitcoin re-calibrates every 2016 blocks, or about every two weeks, resetting how tough it is for miners to mine.
On Saturday, the bitcoin code automatically made it about 28% less difficult to mine — a historically unprecedented drop for the network — thereby restoring block times back to the optimal 10-minute window...
"We are expecting a period of much higher mining profitability for Compass Mining clients," said Whit Gibbs, CEO and founder of Compass, a bitcoin mining service provider. "We expect miners to be approximately 35% more profitable." Blockcap's Feinstein agrees. "We are expecting a revenue and profit increase for the foreseeable future. This was an unexpected gift to the network, not just on revenues but on decentralization and sustainable energy metrics."
CNBC also spoke to the former Chief Mining Officer at Greenridge Generation, the New York-based, coal-fired power plant that converted to large-scale bitcoin mining.
"Zhang estimates revenues of $29 per day for those using the latest-generation Bitmain miner, versus $22 per day prior to the change."
Re: (Score:2)
Don't hate the player, hate the game.
I think that BTC is a massive waste of energy, effort and attention too, but if you get down to the nitty gritty of it, half of mankind's economy is pretty much the same. Hell, we live in an age where using your phone and computer as little as possible is considered healthy, buying and keeping as little material objects as possible is "sustainable", and being entirely self-sufficient is the greatest threat to the world's economy.
So yeah, BTC should be the last of your wo
Re:Keep raising that sea level (Score:5, Insightful)
Don't hate the player, hate the game.
I have enough hate for both.
Re: (Score:2)
Use your aggressive feelings, boy! Let the hate flow through you.
Re: (Score:2)
Don't hate the player, hate the game.
So exactly what is "the game"? What are the incentives for "the game" to change?
And if we don't like it, can we regulate the shit out of it without all the cryptocoin-huggers going ape-shit about it?
Re: Keep raising that sea level (Score:1)
Don't hate the player, hate the game.
Just because there's no need to hate stupid people does not mean they're not a threat to the rest of us (i.e. the 1.5% or thereabouts that aren't completely stupid).
Re: (Score:1)
The game is shitty because of the players that are in it behaving like dicks. Like another poster said, I have enough hate for both.
Re: (Score:2)
Hate the player and the game, and especially hate the apologists.
Re: (Score:2)
Let's take them up on what they want.
Let's give Bitcoin miners another gift by shutting down another 50% of the network.
Then another such gift.
Then a few more.
Re: (Score:1)
I suspect before long (Score:3)
All that said I don't think this is the beginning of the end. The beginning of the end will be when drugs are legalized and the larger and more prosperous economies start to crack down heavily on the money laundering. That'll remove the floor from Bitcoin and other mining cryptocurrencies which will chase out the speculators. And proof of stake is a dead end since by it's very nature it puts too much power in the hands of whoever owns the most stake making it very prone to simple currency manipulation.
Re: (Score:2)
>Developed Nations heavily subsidized their electricity
?
No.
They subsidize grid infrastructure to ensure they have a civilization, but they don't subsidized their electricity.
Re: (Score:2)
By adding steady base-load and counter-cyclical demand, Bitcoin mining makes the grid more cost-effective.
Re: (Score:2)
Re: (Score:2)
They actually do. For fossil, they never charge the the power-stations the damage their exhausts do. Nuclear does not have to pay for long-term storage of the waste, for risk-cost and the exceptionally expensive tearing down of the plants. (Well, there is token funds for that, but they will not even cover 1% of the actual cost.)
The one exception is renewables, which are artificially kept back almost everywhere and still manage to be the cheapest source of electricity almost everywhere.
I hope so. (Score:5, Interesting)
Bitcoin is a global casino in a way that the stock market is not. When one buys stocks, one buys a legal stake of ownership in an actual business. When one buys bitcoin, one buys nothing at all.
I totally sympathize with people who get confused by this or feel that the distinctions being drawn here have no difference. We are dealing with multiple layers of high level abstraction. Legal currency, for example, is already fiat money which means that it is already nothing more than a global agreement that an arbitrary symbol will have value. That sure sounds a lot like bitcoin!
On top of that, a business is properly a "legal fiction." Nothing more than a complex agreement about who gets to make what kinds of decisions in the organization of the production of a good or service, and the distribution of the above-mentioned fiat money.
And then here I am saying that buying stock in these businesses is somehow more real than buying bitcoin. Yes, I can see why people would object to this.
BUT, all the layers of agreement involved in money, business, and stock have a practical output: food gets grown, electricity gets produced, clothing gets made, and so on. Those agreements facilitate the necessities and pleasures of life.
Bitcoin is a different kind of agreement than currency, that doesn't have the same levels of control that are necessary to make it stable enough to facilitate the above-mentioned purposes. It is a way of using fancy math to gamble over money, without actually making meaningful transitions in who makes what decisions over the means of production. The allure is not "earn your keep by satisfying the needs of others," but rather "spend a little and then suddenly have a lot, without expending any actual effort or contributing any actual value." That's gambling in a nutshell, and it is overall harmful to the economy due to its natural antagonism toward productive jobs.
Re: I hope so. (Score:1)
When one buys stocks, one buys a legal stake of ownership in an actual business. When one buys bitcoin, one buys nothing at all.
If those stocks don't pay dividends, there's not much difference.
Re: (Score:2)
Re: (Score:2)
When one buys stocks, one buys a legal stake of ownership in an actual business. When one buys bitcoin, one buys nothing at all.
If those stocks don't pay dividends, there's not much difference.
Except for the part about owning a portion of the company.
Re: (Score:2)
Bitcoin is a global casino in a way that the stock market is not.
I dabble in both and... heh, no, COVID proved that the stock market is every bit as much about who's left holding the bag last.
Re: (Score:2)
I agree that investing in stocks is doing something worthwhile, whereas speculating on Bitcoin is just gambling. I have argued with my lefty friends that an investor deserves a reward (dividends, stock growth, etc.) for putting their surplus money into funding enterprises, that produce useful goods and services. This is I suppose the acceptable (maybe necessary) face of capitalism. I don't buy the argument that money earned from having money is always evil, compared to the wages earned by honest toil. By th
Re: (Score:1)
Re: (Score:2)
Indeed. "Mining" is an evil and selfish act, as it accepts significant damage to society and the environment for a minor personal gain. The "tragedy of the commons" all over again. Some people are incapable of learning.
ORLY?! (Score:1)
Re: (Score:1)
Re: ORLY?! (Score:2)
That's the point. It kind of averages your investment over a period. They always say buy low, sell high but this can be harder in practice or for those who are impatient. Mining by very nature averages the investment over time.
How is that regulated (Score:3)
Re: (Score:2)
Sure. Bitcoin is just a collective agreement that a particular system should be used. This specific difficulty adjustment is part of the original system, but you can also introduce arbitrary changes. Typically that results in a fork where some people go with the new system and others go with the old. It's happened already and it will happen again. You can create entirely new systems from scratch too, and they will also devalue bitcoin.
Re: (Score:3)
> If there is a way to change the difficulty of the algorithm, and that impacts the roughly 1 trillion$ total value of bitcoin, isn't there a huge potential for market manipulation?
No.
If you wanted to try this, you'd need way over half of miners to participate in this game- if you wanted to have 10x the mining rate for a short period of time, you'd need 90% of the miners to participate. The setup to this would be pretty crazy for bitcoin as suddenly blockrate would fall a whole bunch, and the reward wou
More western coal plants sustainably demothballed? (Score:2)
Sustainable coal for sustainable Bitcoin.
Re: (Score:2)
More likely than not, those plants are unusable now. Or they've been converted to natural gas.
Re: (Score:2)
Look, I hate Bitcoin too, but cyberstalking people isn't cool.
Re: (Score:2)
OK creepy stalker guy.
you're a creep.
nobody likes you.
Re: (Score:2)
The aforementioned AC (I actually caught him posting logged in a few times but I can't remember his username/don't care to remember his username) has multiple accounts and abuses the moderation system. If Slashdot won't do anything about him, it's up to us to remind the readership that he's a bad poster.
Re: (Score:2)
And I'm talking about Pyrite Pete, not the guy "stalking" him.
Re: (Score:2)
That might've been him but he obviously has sockpuppets with regular mod points.
Re: (Score:1)
Re: (Score:1)
I'm pretty sure I didn't post that.
Since that was your very first post. No you didn't.
Well played though. I should have made the account when I invented Pyrite Pete. But had no idea it would take off like it did.
Just like bitcoin I suppose.
Re: (Score:2)
lol at a 50% drop being called 'plummeting' for Bitcoin. After sucking up 90%-80% drops in the past, it's getting more stable. if it hits $6k, I might get worried.
On Another Track... (Score:3)
If China has banned bitcoin mining, and half of the hardware to support it is no longer useful, can we expect to see prices drop on GPUs at eBay? Might some now be available to ordinary mortals at or near (or even below) MSRP? That might be a nice piece of fallout, though one wonders about the remaining lifespan of a GPU that's been hammered with mining 24/7 for a while.
Re: (Score:1)
No. It's just going to move to another country like Kazakhstan or Iran and be mined there. Any effects to mining due to the China banning will likely in a few months be gone once all the miners have setup shop elsewhere.
Re: (Score:2)
The problem is what bitcoin is used for. The reason for China having clear majority in bitcoin mining is because Chinese elites are getting desperate for means of taking money out of China.
And if you want to see just how serious Chinese Communist Party is at shutting down paths elite uses to get their money out of China, just look at Hong Kong for an example. Until the current crackdown, that's where most of the money was going through. Everything from money mules to insurance scams to move money across the
Re: (Score:2)
In any way possible to facilitate exchanging yuan for "an actual currency". Just like all other ways to get money out of China.
Re: (Score:2)
Tee Hee. How are you going to convert your Yuan to bitcoin?
You convert the Yuan into ASIC hardware and electricity and wait one year.
Why would you not just change for an actual currency instead?
Because the government won't let you.
Re: (Score:2)
No. It's just going to move to another country like Kazakhstan or Iran and be mined there.
Not necessarily. The ASICs are a PITA to ship. Shipping costs may make many current ASiCs unprofitable.
Re: (Score:2)
GPU prices go up and down with bitcoin, and already dropped when bitcoin dropped. However, GPUs are never used to mine bitcoin. They are used to mine other cryptocurrencies that are much smaller than bitcoin, and those currencies tend to follow bitcoin around as well.
If crypto in general contracts more, GPUs will become cheaper.
Re: (Score:2)
So far, this has been true. But it depends on how China's bitcoin ban progresses. There's a decent chance (lower than 50% in my view, but still meaningful) that Party apparatus will be slow enough to react to not understand that there are other currencies, and will fail to block exchanges working with GPU-mined currencies like ethereum.
Which would cause all of the money mule activity to go from bitcoin to those other currencies, decoupling their prices from bitcoin price.
We'll see how it goes.
Re: (Score:2)
> Which would cause all of the money mule activity to go from bitcoin to those other currencies, decoupling their prices from bitcoin price.
From a user perspective, the mining rate doesn't matter.
From a security perspective, a lower mining rate makes a cryptocurrency more open to disruption, with the community having to come together to reverse or prevent an attack. Attacking bitcoin is vastly harder than attacking other cryptocurrencies. Everyone rationally has a lot more confidence in a proof of work
Re: (Score:2)
You're talking about technical and financial aspects of an issue that has a political problem. It's not that you're right or wrong. It's that those points are irrelevant to political issue in play.
Reality is, CCP really doesn't care about those technical aspects. What it cares about is locking down any paths used by the massive amount of money fleeing China. Now that Hong Kong is mostly under control, bitcoin has become a large method of getting money out of China. Which is likely why it's now being targete
Re: (Score:2)
I love living in your head rent free in all China related threads. Now, even before I post in them!
Re: (Score:2)
Re: (Score:2)
Not directly, no. However there were apparently a lot of Ethereum miners in China that are now selling off their dGPUs.
GPU farms are mining Etherium not Bitcoin (Score:2)
If China has banned bitcoin mining, and half of the hardware to support it is no longer useful, can we expect to see prices drop on GPUs at eBay
No, because GPU farms are mining Etherium not Bitcoin. Bitcoin is mined by ASICs.
One Job Title Won't Be Missed After Peak Bitcoin (Score:2)
Ripe for a double-spend exit attack. (Score:2)
And right now bitcoin is ripe for a double spend exit attack by one of those Chinese miners (or a group of them conspiring together).
If they turn their equipment back on they could have a real shot at controlling 51% of the hashing power long enough to let them double spend and sell a big stack of Bitcoin twice before anyone else can realise what has happened. Bitcoin will then plummet, but they'll have made off with the cash first. Probably make themselves a lot of enemies, too.
Re: (Score:2)
That would probably be the best outcome. And while I do not hope for any understanding on the side of the greedy morons, a nice big catastrophe could make them stay away from this foolishness in the future.
I see the pumping is still going strong (Score:2)
However, why Slashdot participates in the scam is a mystery to me. Are we pro-stupid now?