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Comment by ssharp | Hacker News Reader

All for the "benefit" of mining Bitcoin.

The idea is to stick these chips into household applications (e.g. USB chargers), give the appliances out for free, stick the electricity bill on you, and give 75% of the Bitcoin revenue back to the parent company.

Yep, a free USB charger that you amortize over its entire use, at many multiples of what it should cost. It's great for people who love playing a guaranteed losing shell game between buying electronics and electricity.

I'm becoming more and more convinced that it's impossible to profitably mine bitcoins without screwing someone else in the process. The trick is to screw them as long as possible without them knowing.

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The scenario you describe is malicious because people don't expect a charger to have "features" which consume large amounts of power without benefit, but it does make me wonder if such tech could be incorporated into electrical items whose express intent is to turn electricity into heat.

Say, a clothes iron, or washing machine/dishwasher water heater (where not already plumbed for hot water), etc.

Since computation ultimately dumps essentially 100% of the consumed energy as heat, why not use it for that?

Obvious arguments against are the cost of the initial hardware, and the engineering difficulty of making something which can actually operate whilst generating kilowatts of heat (i.e. not cooking your cores in the process)

Wired Magazine did a stunt where they ran an early ASIC miner as a coffee warming coaster in their office and displayed it on a webcam.

The idea has been around for a long while. Google "data furnace".

The crux seems to be Moore's Law. We buy heaters and use them for decades, but any compute device has a useful lifetime of a few years before it's surpassed. If we ever see Moore's Law come to an end, expect to see a lot of highly-distributed computing.

Under these conditions, it could still work in irons or especially electric kettles. Those are so crappy nowadays, you have to buy new every two-three years anyway.

Unless the device is on almost all the time, it won't compete with datacenters, even on price.

Using compute for heat is a dodgy proposition even where heat is needed at least half the year. The minimal uptime of an iron or kettle really puts the kibosh on the economics.

> I'm becoming more and more convinced that it's impossible to profitably mine bitcoins

I suspect that's been the case for a few years - at each time I investigated, in the pre-ASIC days starting from 2011, the electricity cost was roughly the same as the Bitcoin value, and the only people who seemed to be able to mine profitably were ones with "free" electricity (e.g. students in halls of residence).

Ironically this is the free market working as expected, that the sale value should collapse to exactly the marginal cost of production. Profit can only be maintained by barriers to entry or market differentiation, and there's a constant threat of oversupply with no way to cartelise to reduce oversupply, OPEC-style.

No irony required. It's absolutely the free market working as expected, driving the price of a commodity to its marginal cost.

The difference is that for most goods, the marginal cost of production falls with increasing economies of scale. Bitcoin is the exact opposite: The block difficulty will continue to escalate as more miners enter the market. It's like running on a treadmill that keeps getting faster and faster. Oh, and instead of making you healthier, your treadmill pumps more and more soot into the air around you.

Yes. A bitcoin is basically a token that says that someone, somewhere has wasted a (quite large) amount of electricity on your behalf. It's an incredibly pure form of conspicuous consumption.

(Likewise with gold you know there's a pile of acidic tailings and a river full of arsenic to back it up, and with diamond mining quite a lot of real human suffering)

Though it's never wasting. You can phrase it better by saying that:

A bitcoin is basically a token that says that someone, somewhere has spent a (quite large) amount of electricity on your behalf to make sure that your bitcoins are secure and safe.

(The more computing power used, the harder it is to counterfeit transactions.)

Except those computations aren't actually doing anything useful. They're not protein folding, they're not analyzing data, they're just computing for the sake of computing.

The actual computation done is not computationally useful. It only "secures" your bitcoins in the sense that an attacker has to put more economic input into their attack to match the economic input of the mining network. The act of mining does not even check whether the transaction is valid - that is done by the host that decides which transactions to include and the rest of the network deciding to propagate a mined block. Mining just churns through a single hashing algorithm to deliberately expend power. You could also secure your network by introducing trust and actually securing the trusted nodes, without having to create an ecological travesty.

However ASICs continue to become vastly more efficient and powerful as well.

"No way to cartelise"

you could. check out proof of idle.

Mining operation KnC Group actually had to publish their earnings statement for a BTC-based fund they created in Sweden. Turns out, they have been losing money throughout 2014.

http://ftalphaville.ft.com/2015/04/29/2128137/calling-all-mu...

"it's impossible to profitably mine bitcoins without screwing someone else in the process"

That is not true. Most mining is done professionally in data centers these days, by companies that all pay for their own electricity without screwing anyone:

This is KnC's facility: http://www.datacenterknowledge.com/archives/2014/07/10/massi...

This is MegaBigPower: http://www.kplu.org/post/central-wash-home-nations-biggest-b...

21 Inc has a 26 megawatt facility: http://www.coindesk.com/21-intel-bitcoin-mining-strategy/

And so on. They certainly seem to be making a profit; it is much easier to do so nowadays (~5% monthly increases of the difficulty level) compared to last year (30-40% monthly increases).

21 Inc sought to build that facility, there's absolutely no indication they actually did.

I think you just landed on the "Free" version of future electronic devices. Imagine a terrible reality, not unlike today's videogame market, where every device, charger, lamp, TV, and box fan comes in "Free" and "Pay" versions - most manufacturers will have a mail back program, so you can return a broken "Free" item for a brand-new "Free" item. The "Free" items will mine Bitcoins and return all profit to the manufacturer.

Meanwhile "Pay" items will still be widely available from numerous online vendors. These devices will require you to enter your personal Bitcoin address, so they can credit you with their mining.

And thus the world will continue to be dominated by Whales, so named for the size of their bank accounts. The rich will be able to keep the entirety of their revenue, while the poor must subsist not only on the charity of the State, but also the charity of the Corporation.

There would no doubt be plenty hacking to disable them, or modify to feed the Bitcoins back to the user.

It certainly raises some interesting problems with ownership... if I can modify my hardware/software to disable unwanted features, this certainly fits in that category.

A USB charger that phoned home? If it's free, I'd certainly take it and modify it so it doesn't, in a similar fashion to the way a Lenovo laptop with Superfish would get its OS wiped and reinstalled.

The question of ownership on this topic isn't as new as you'd think.

If you get a free sports bag from your local training center, is it ethically right for you to use a black marker and erase their printed logo?

I think most people would say that once the training center has given you the sports bag, even if their intention was for you to advertise their brand by walking around with it, it's no longer their property and they cannot control it.

Yes, because most people will not erase their printed logo and they get advertisement. If they notice that most people erase the logo, then they could just stop giving away the bag.

In some ways it's like the adblock debate - and there are JavaScript bitcoin miners (https://news.ycombinator.com/item?id=2566365 ) - uselessly slow now, but the concept still holds.

I've collected a few "ad supported" free items (keychains, bags, writing boards, etc.) from various trade shows and conventions, and of those that are still usable, amusingly enough the logo was the first thing to come off from normal wear and tear.

Have you encountered the new breed of ad-supported free flash drives? I recall from a discussion on HN that apparently some people are putting a hub inside said flash drives and a fake HID device that will occasionally type in "Win+R http://companysite.com <enter>".

No, (un?)fortunately I haven't. I do have a few small ones which I don't use for anything critical, but they show up only as the usual mass-storage devices.

Their hope was for you to advertise for them, they certainly couldn't have counted on it and they know that up front so it's perfectly ethical to cross it out and even they wouldn't disagree.

Its crap like this that's going to force new federal regulations on us, that will probably be over-reaching and pegged to a bill full of questionable things. Its disheartening to see our energy usage drop because of the move to CFL's over incandescent, targeting vampire power appliances, moving from CRT to LCD, moving towards energy efficient chips, etc only to lose a lot of these gains because of some bitcoin stupidity.

uTorrent just did this by running a background miner bundled with the software. Considering how much extra coal we're going to burn for this, I think its going to become a regulation issue sooner than later. The industry's greed is begging for it.

I'd also be worried about a fire risk from these things. How hot do they get? How much ventilation do they need? How well do they handle a hot day in the American South without A/C? What kind of QA can we expect here considering these will be disposable tchotski's.

This is a genuinely scary scenario.

Have there been precedents of profiteering by hiding _something_ invisible to the end-user but with an ulterior purpose into normal consumer electronics?

Lenovo's Superfish? Prior to that, the Sony rootkit CDs? Pre-installed adware in general? Amazon's thing with the always-on microphone? The Samsung TVs that report all filenames on connected devices back to a server?

I miss the good old days of "If you aren't paying for a product, you are the product." Now, the new paradigm is: "By using our stuff, we own your data. All of it."

How do Global Fortune 500 companies think bundling malware is OK still after all the bad press the last few years?

Because that bad press isn't translating into lost dollars. And dollars are the only language large companies understand.

Superfish only got bad press because their spyware was shotty and had huge attack vectors.

Half of Silicon Valley is either built on spying on people or selling to those who are spying on people. It's the original sin of social networking.

All malware, spyware, and adware.

If you do that while the USB charger isn't in use, that in practice already is illegal in the EU (http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:320...).

You could try and stay under that 0.3W load, or only start using real power whle under load, but I expect the EU will move to forbid that, too, if an Intel-scale company starts doing it.

That will probably kill this idea world-wide, as economies of scale make it cheaper to have only one type of charger (economies of scale similarly exported lead-free soldering from the EU to the world and car safety and economics guidelines from California to the USA to the world)

There was an interesting paper a few years ago about this inevitability;

http://iang.org/papers/BitcoinBreachesGreshamsLaw.pdf

Then it was in the context of botnets and chinese miners -- but the theory is that dishonest mining (stolen electricity) will necessarily drive our honest mining which will spell doom for Bitcoin.

So who are most miners screwing over?

Whoever is paying the electric bill. You see lots of people talking about mining from apartments with included utilities, dorm rooms, their work, etc. It sounds like 21 Inc. wants to take this route on a massive, distributed scale.

Wasn't there also a company that pre-sold mining rigs, used the pre-sale money to fund the manufacturing, and then used the equipment to mine for a few months before shipping, at which point the equipment could no longer profitably mine?

Was that Butterfly labs? I remember hearing rumours of their early ASIC business operating that way.

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