Brief Introduction Name Radoslaw Krzeski Occupation Digital Project Manager Interested in Blockchains as a tool for economic efficiency in the media industry Bitcoin ID: 1003798
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1. Topic of the day:
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3. Brief IntroductionName: Radoslaw KrzeskiOccupation: Digital Project ManagerInterested in Blockchains as a tool for economic efficiency in the media industry
4. Bitcoin miningThe authors warn of a goldrush raceTo join, we connect to other nodes and perform six tasks:Listen for transactionsMaintain block chains and listen for new blocks (valid nonce)Assemble a candidate blockFind a nonce that makes your block valid (hitting target)Hope your block is accepted= Profit
5. Finding the Valid Block
6. Determining DifficultyChanges roughly every two weeksChanges at every 2016 blocksDifficulty fluctuates based on given time to mineMiners on the same block have the same difficultyAllows consesus
7. Side Question; What is a death spiral?
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9. Mining HardwareSHA-256 Hash functionApplied twice to a bitcoin blockImpossible for normal computersCPU/GPU mining (2010 OpenCL)Arithmetic Logic Units (ALUs)Field Programmable Gate ArraysApplication –Specific Integrated CircuitsWhy are hashes non-reversible?
10. Professional mining
11. Energy consumptionLaundauer`s Principle (every time you flip a bit there is a minimum amount of energy requiredThree steps to bitcoin`s usage of energyEmbodied energyPure ElectrityCoolingTwo ways to calculate: Top-down/Bottom-up0.21%
12. Mining PoolsSmall chance of finding blocksMany miners, one pool managerCalculating mining shares by reporting near valid hashes and actual valid blocksPay-per sharePropotionalPool hoppingCommunication API`s
13. Mining Pools cont.51%?
14. Mining Risks Forking attackGoldfinger attackForking via briberyTemporary block-withholding attacksBlacklisting / Punitive Forking
15. Alternative Mining puzzlesWhy do we have mining puzzles?A few basic requirements:Quick to verifyAdjustable difficultyProgress-freenesMemoryless processWhat is a different word for «Bitcoin Puzzle»?
16. ASIC-resistant?«One-CPU-one-vote»Memory-hard puzzlesMemory-bound puzzlesScrypt – although resitant, what happened?DASH(x11)Changing/Moving puzzles
17. Last Notes Proof-of-Useful-WorkNonoutsourceable PuzzlesVirtual Mining
18. DiscussionWhat constitutes the luck element, what is involved in the block creation to be accepted by the consensus chain?Is there a chance that two miners are mining the same block/puzzle?At one point the book mentions : «If the period were much higher, the network’s hash power might get too far out of balance with the difficulty.» - What happens then?What happens when we go from derived value from the mining to the transaction fees? How will miners change their behaviour?ASIC mining and the development of professional mining centers violate the original vision of Bitcoin which was to have a completely decentralized system in which every individual in the network mined on his or her own computer. Is it a violation of Satoshi Nakamoto’s original vision in terms of the mining or did he foresee it?
19. What happens when we go from derived value from the mining to the transaction fees? How will miners change their behaviour?