Crazy crypto mining story from 2013
joonaskoppa.medium.com
joonaskoppa.medium.com
"so I'm mining monero to heat my apartment this winter" ... "My ceiling is now on fire"
Reference: https://www.cw.no/it-bransjen-komponenter/bruker-pc-en-til-a...
https://www.engadget.com/2018-03-09-qarnot-qc1-cryptocurrenc...
I do miss the heat of the Ethereum mine though. Thank you for sharing your story, it brings back a lot of memories. It also echoes the stories of most Bitcoin mining companies I read in The Age of Cryptocurrency by Casey and Vigna. Always racing on the hamster wheel of profitability against the difficulty algorithm and electricity prices and flirting with or going bankrupt. I’m glad proof of stake is finally here and we can move to a more sane way of doing things.
I’m glad proof of stake is finally here and we can move to a more sane way of doing things.
Proof of Work means participants in the network exchange energy to validate transactions. Anyone may participate without permission. Anyone may leave at any time.
Proof of Stake means participants in the network, that already hold a large stake in the network (32ETH in Ethereum) deposit that stake in exchange for permission to validate transactions. You may not withdrawal your stake (Coming Soon™) and if the transactions you publish are not inline with the rest of the network, you are fined (slashing).
So while it’s true both PoS and PoW can be used to validate and secure a blockchain network, they couldn’t be further from each other. Proof of Work is currently the only solution for a truly decentralized network that’s not susceptible to coercion.
Very well argumented!
(This is sarcastic )
the paper you linked hand-waves away this for some reason, either to suggest that interest in bitcoin is purely speculative (which to be fair would only be half-wrong), or ignoring that market forces put upward pressure on transaction fee cost.
so far, by-and-large, the proportion of block profit coming from transaction fees has increased, as expected: https://buybitcoinworldwide.com/stats/fees-percent-of-reward...
of course it has. I am not talking about the proportion of block profit, I am asking how you expect the total block profit to stay the same from just fees. The network will have to survive when the proportion will eventually be 100%
the transaction fee isn’t some algorithmically determined value, it’s completely controlled by market forces (for better & worse).
there are plausible arguments for transaction fees greatly exceeding even the original coinbase amount, although ultimately what matters is the value of those fees in local currency, contrasted with the cost to mine the block containing them.
I'm not sure the fees will actually change a whole lot if denominated in BTC. I just expect that when 1 BTC is worth a lot more than it is now in fiat, people won't be paying for their coffee on-chain (assuming inflation doesn't do crazy things to the price of a cup of coffee!).
Okay, but those LN transactions clearly depend on the security of their multisig channels without subsidizing the miners through the fee market.
The one asterisk that needs to be added here of course is that with sufficiently low difficulty, a double spend attack becomes more viable, but this is a somewhat overblown threat. It's low reward, extremely high cost, and 'easily' undone if the market so agrees. It shouldn't be ignored, because it is indeed a threat, but at the same it's also kind of a 'meh' threat.
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edit: And for those who are may not be aware. Even once the final Bitcoin is mined, miners will continue mining - something which may be counter-intuitive. Whoever mines the block will get no coins, but will get all revenue from the fees attached to whichever transactions are processed.
That is my point- that equilibrium point will eventually be low enough that 51% attacks, selfish mining attacks, etc. become feasible and highly desirable to execute.
>It's low reward, extremely high cost
It is currently low reward/high cost. But it will eventually not be.
>and 'easily' undone if the market so agrees.
False. Bitcoin has not made a hard fork in how many years? Can you make a hard fork faster than the attacker can "cash out" to crypto-crypto exchanges? Highly doubtful.
>Whoever mines the block will get no coins, but will get all revenue from the fees attached to whichever transactions are processed.
... which is dependent only on the fee market, and currently amounts to a small fraction of total block reward.
Mining is a liquidity service, therefore it only makes sense that the holders of the liquidity pay for it.
You couldn’t be more wrong about what you are saying.
[0] https://ethereum.org/en/staking/
[1] https://ethereum.org/en/upgrades/merge/#merge-and-shanghai
[2] https://www.coindesk.com/tech/2022/10/14/censored-ethereum-b...
Anyway, the real world use cases are largely large money transfers and scams, and PoS is more efficient for that.
Real world use cases are digital scarcity and digital commodities.
Energy use is so large mining at any non-negligible scale anonymously is impossible. Any serious miner will have to open a company, move to a special facility and get a special energy connection. Mining only makes financial sense in few countries with cheapest energy. Last but not least, due to the difficulty mechanism mining for anyone but enormous miners requires pooling with others.
Pools are public entities that are yet another possible layer of control by regulation. Adding all that and the conclusion is that PoW has zero resistance to regulations. China could take over bitcoin, but they decided to throw away mining instead, only making it possible for America to do so in turn.
All it takes is indirect or direct control over >50% of hashrate to censor anything. It's not possible to create a fork without censoring miners, because any minority fork can be trivially attacked in an adversary situation. If any PoW network even becomes important for American government to try to censor it there's no defense.
To stake in ethereum, you need to buy eth, which can be trivially bought anonymously from anyone that owns eth, most likely fully online without any physical contact. A more permissionless system isn't possible. There's no physical trail, both from ordering asics and from energy use. All that's needed is an internet connection. Staking can be easily fully anonymous and can happen anywhere in the world. That's why PoS is the only way to have a decentralized network.
It's always possible to fork with any arbitrary subset of validators, whether for censorship reasons or other disagreements.
PoW is objectively worse than PoS in literally everything but as a method to distribute coins. Mining is a way to sell coins for energy and hardware cost, which is an advantage at the cost of being worse in everything else, but only in the early period.
There is no hard limit here on the supply chains for miners, this is like saying "there are at most two mobile phone operating systems". Sure it is somewhat true, but there is no deep reason it must be true.
Second, bitcoin mining is not a permissioned system. A permissioned system means that the system itself imposes permissions. You are talking about actions outside of the system that would perhaps incentives people to not use the system. This is a concern but not the same as being a permissioned system.
> All it takes is indirect or direct control over >50% of hashrate to censor anything.
For bitcoin PoW and ethereum PoS (hashrate => stake percentage) this is true. However the difference is that with PoW it is possible to increase the supply of mining hashrate to overthrow this quorum of censorship by literally building more physical hardware. In ethereum, if this ever happens there is no recourse as the supply of coins to stake is finite.
That's an irrelevant theory. There are very few fabs capable of making adequate asics.
>if this ever happens there is no recourse as the supply of coins to stake is finite.
It's much easier to fork rather than fight state-affiliated miners.
Enter Proof of Space and Time. PoST improves upon Proof of Work to maintain the high level of security PoW provides (if not improve upon it) while using considerably less energy. It essentially does the work once instead of for every block, storing the proofs with space and using the time component to collectively move the chain forward.
Though you must be a time lord...
A true story that sheds light onto what crypto mining was like before the times of warehouse mining farms and dedicated mining hardware (FPGA & ASIC).
Wishing to hear from others with similar experiences in the comments. Take me back to the good old days.
Good times.
I wasn't making much, maybe $50/mo at absolute peak? I'm sure if I had scaled up the property manager would have eventually wondered why/who was spiking the apartment building's electrical bill and I would have found the limit to my unit's "unlimited" electricity. But it was a fun project. I was working a full time job too, so I learned a lot about remote managing something like that. I had it all wired up with a VPN so I could SSH into the mining box from my phone. Here's another pic of my "workstation" at the time. The right hand monitor was my "status dashboard", really just a tmux session with htop, iftop, eth miner, etc... [2].
I was ~25 and single at the time and the biggest obstacle to 100% uptime was actually if I wanted to bring guests or dates over, they would wonder why there was a jet engine in the corner of my studio apt. So I would shut it down in that case. Eventually that + loss of profitability + general jankyness of the setup led me to dismantling it. But it was fun while it lasted. The part in the OP about restarting the box with a screwdriving short definitely spoke to me. My box had a whole ritual around restarts that I discovered through trial and error, where I would power up, pull the plug, restart, restart again, and then it would run stable indefinitely. Good times.
I'm glad the author took some positive experience from it though. There is something "fun", or at least gratifying, about going all in on something even when it puts you through hell.
Who won in the whole arms race? Hardware manufacturers, and people who could either run arbitrage or steal resources. (Which is which was often a matter of perspective.) Everyone else? Break-even or worse.
What was actually built, for all that effort? Almost nothing. What did we gain as a society? The same.
And I'm not sure that dollar-denominated financial markets are really any different.
Deliberate?
For money owners they sell the free liquidity services and call it interest (Marx defeated?).
"took it to my friend’s student dormitory where the electricity was “free”."
I was not disappointed! Life hack: stealing can make you money!
Is tech still counter culture now that it pervades every place in society? Is it still okay to completely shirk the law now that many tech companies, for all intents and purposes, write the laws?
These are interesting questions to me.
Tech is not counter culture (and has in my personal observation never really been). Hacker culture, on the other hand, was counterculture from beginning on and still mostly is.
And Hacker News is run by YCombinator, which has an application form that asks applications to explain a time when they cheated ("hacked") a system for personal advantage.
Besides, breaking the law is not inherently a bad thing.
Edit: Also, I absolutely didn’t get rich from this if that’s what you’re concerned about for some reason. We cashed out after an early price spike, pocketing several thousand dollars each, which with both considered to be a major windfall.
Only a handful of people were mining Bitcoin in 2009, which is the same year it was created.
Maybe it was different in the US. In Europe I get the impression the FOSS community is predominantly left-leaning. My local Debian community certainly is, and they're anti-cryptocurrency (like myself).
Slashdot was also quite skewed against bitcoin, and that was a pretty international geek readership.
>Meanwhile, my monthly electricity bill was hovering somewhere around a thousand euros"
The Man will fuck you on any technicality they can - don't turn around and give them the benefit of the doubt
But a lot of people do see him as a role model. And he wields considerable influence and power. See what he did to Gawker. How many of us can ruin a publication just because of a personal vendetta?
I know for a fact my university in the early 00's did not have an acceptable use/abuse policy on internet usage, and I was the person that caused them to create that policy!
We had 2 T-3s for internet access, one dedicated to dorms, the other dedicated to labs/office spaces, but there was fast LAN access between the dorms and the labs. The dorm T3 was always slammed in the evening by about 5000 students, and the lab/office one was 100% available - so I set up squid proxy on a lab computer, and was getting 10 Mbps where everyone else was getting 50 kbps.
A sysadmin saw the process running and tried to kill it and it forkbombed for some reason, crashing the lab computer. So they came and knocked on my door and made me sign a paper saying I wouldn't do it again, and then next year every incoming student had a to sign a policy saying they would behave on the network.
I still maintained that I did nothing wrong, and it was the sysadmin that didn't know how to kill a process appropriately that needed to be talked to.
The dormitory did not give the free electricity to the author, but to their friend.
If, for instance, an "all you can eat" buffet had an acceptable use policy, I do not think that it would allow "you can also feed a friend".
It would also rightly be ignored.
A visitor charging their phone? Ignore it. A resident running an extension cord to the carpark to charge the car of a different visitor every day? Enforce it.
Don't ask bad-faith questions like this. There's nothing gained by arguing the extremes of a case.
You're just asserting that there is some kind of policy, without providing any details of it. Since you're arguing from a point of knowledge, it isn't bad faith to ask you about your knowledge of the policy of the unnamed dorm at the unnamed college attended by the unnamed friend.
I don't believe you actually know anything about the policies of the dorm - I think you're just assuming there is some policy, and it was reasonable in 2013.
> You're just asserting that there is some kind of policy, without providing any details of it
Human interactions, customs, policies and laws are not code, and should not be thought of as merely a bunch of if statements to run.
When faced with something obviously ok, such as "a visitor plugging in their phone that they need to charge on one occasion" we don't apply any written policy, we ignore it. This is basic hospitality such as allowing a visitor in need to use the toilet facilities.
When faced with something obviously not ok, such as "a visitor extracting as much electricity as they can, for no benefit but their own private profit" we raise that this is blatantly an abuse of the resources. If there is a policy, we apply it to that end. If there is no policy, then we add to the policy, to that end. The policy is merely an instrument.
My favorite crypto miner story was from a guy who caught an employee hiding ASIC miners above the ceiling tiles in their office. For some reason he thought nobody would notice. They noticed both the noise and the weird new devices on the network.
I suspect he lost more money from getting fired than he gained from the crypto mining. His miners were offline for quite a long time while they were seized as evidence in the ensuing investigation, too.
The FPGA/ASIC manufacturers were actually using their own stock to mine the best profits and only then ship them to customers.