MtRed Bitcoin mining pool will be shutting down
bitcointalk.org
bitcointalk.org
It's sad to see, and a big worry for the future security of the blockchain.
in the bitcoin context they chips created for the specific purpose of hashing, allowing you to mine for bitcoins quickly and effficiently.
http://cryptojunky.com/blog/2013/02/17/bitcoin-asic-roundup/
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...
(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.
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.
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.)
What if they only paid out when a block was found?
Then the miners would have no impetus to help them and would instead mine for themselves
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.
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.
(I don't actually do this because I don't have a desktop computer, and it's unclear if building one at this point will pay for itself before custom integrated circuits push the bitcoin difficulty so high that GPUs become worthless)
Of course, energy has to be expended to move heat around, and there are inefficiencies. But with real-world equipment and common cold-but-not-too-cold temperatures, a single unit of electricity can be used to move several times as much heat as it would produce if you just converted it to heat directly.
A computer is as efficient as anything when it comes to converting electricity to heat. Heat pumps win because they're ultimately playing a different game.
But, thanks for clarifying.
All profitable miners would be using the most efficient hardware, in a location where electricity is cheapest.