121 sats \ 8 replies \ @anon 25 Oct 2023 \ on: What if Bitcoin mining was ASIC-resistant? bitcoin
Just look at how Litecoin is doing. It was designed to be GPU resistant when Bitcoin migrated away from CPU to GPU mining. By placing limitation on miners being able to hash as fast as they possibly can, you are weakening the network and its value.
The problem as I see it is ASIC miners are expensive and the lower priced ones even with favorable KWH rates won't turn a profit for the average person. The issue isn't that Bitcoin needs to be ASIC resistant. The issue is Bitcoin mining needs to be accessible and profitable for more people who can't sink a bunch of money into equipment and power. Anyone can mine, but the incentive is only there for a small section of that demographic.
What happens when ASIC miners are priced out of everyone's hands except corporations and governments? Do we really want governments to accumulate more than us, to use their wealth and continue their human rights abuses against us? Do we think this stops on a Bitcoin standard?
There are pleb miners doing very well for themselves. Centralization in corporate hands is a concern of mine as well but its a myth that plebs can't mine profitably. It isn't easy but there are folks doing it. Its really about energy sources. There are locations where it is easier than others but it can be done.
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Yeah this is what I have been thinking about as well! I do think there are small scale ways to be profitable, but still require a decent chunk of cash to get into.
I imagine it would be pretty hard to get into profitable mining for less than ~$1000 USD. But that is just an arbitrary number I pulled out of my ass.
I do think that there is a way to be profitable with solar power (including all of the infrastructure costs to setup). This is if you run a setup with minimal batteries and use all of the power that you produce, essentially treating the ASICS as "batteries", similar to the digital energy analogy.
I'm fairly certain it would just be a lower profitability than at a large scale.
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You can pick up a used S9 for around $50-100 and learn how they work. They aren't profitable to mine with right now but they are low cost and simple. You can even use one as a space heater or pipe heat from the ASIC into your HVAC.
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Profitability is relative to exchange price for bitcoin of course. Mining off solar is not likely to be profitable for some time. Now, if you are installing solar for other reasons it can make sense to mine with excess power. It is very complex to calculate so don't trust your gut or me. Solar has a high cap cost to get started and mining as well. There are pleb mining groups on telegram that are very helpful.
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Thank you, I'll have to check it out.
Just throwing out some napkin math numbers on small scale DIY solar setup:
$0.10/kWh from utility company
~ 3kW ASIC (pick your model)
3kW of panels (~$0.50/W new / ~$0.25/W used) $750-1500
5 max sun hours per day ($1.50/day of power produced / saved from utility (15kWh))
5kWh of battery cells ~$1500
5kW inverter ~$750
Cables/Fuses/Connectors/Switches ~$250
Total solar equipment $3250 - 4000
Time to ROI on just power production: 6 - 7.5 years. ($4000 / ($1.50/day) / 365 = 7.3 years)
Knock off 30% for the US federal solar tax credit that becomes 4.5-5 years.
Panels maintain 90% efficiency out to 25 years. Batteries last ~10 years.
~$400 S17 @ 73Th/s currently makes ~15000 sats/day but we only have 5 hours of equivalent max power so 15000 * 5/24 = 3125 sats/day or ~$1
The extra ~$1/day cuts down your ROI from 5 years to just over 3 years to pay off your combined solar + mining setup. Certainly able to optimize this more with better price and power efficiency.
As always with mining returns calculations, there are unknowns like BTC/USD price and difficulty adjustments. Having your own infrastructure is inherently valuable since your cost doesn't inflate AND you have more sovereignty because you don't rely on others to produce electricity.
I think these returns, as long as I am not missing something important, are good enough that's it's worth trying IMO.
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There is certainly an economy of scale to mining operations, but there are also issues that are much harder to solve when you put more mining hardware in close proximity such as cooling and power supply. As the iteration cycles in ASIC production have grown longer, I’ve heard more stories about people running small mining operations off of self-owned renewable when they overproduce or during off-peak hours.
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I feel like difficulty adjustment and block reward halvings will always lead to miners increasingly being those who have the capital to afford cheap electricity, hardware, infrastructure. Unless you can find some other advantage at a small scale.
Only those who have an advantage in some way will be profitable. The difficulty adjustment is constantly adjusting to reach an equillibrium where 50% of the hashrate is profitable and 50% is unprofitable.
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Good point, that was my underlying reasoning while writing the original post. The problem is not ASICs per se, the problem is the fact that virtually no private individual can mine on the network without incurring huge losses.
To be honest, I am a bit surprised that core developers do not address this issue (which is a decentralization issue imho) somehow. I mean, one thing is being conservative in what innovations should be implemented and what not. But, this way, we’re all running toward a centralized future I think.
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