Lecture 2 - Mining Flashcards
Why do we need blockchain?
To prevent double spending
–> have an ordered list of all transactions; public
What is a sybil attack?
A Sybil Attack refers to when a system is violated by an entity that controls two or more different identities in a network.
–> Voting does not work
How do we solve the Sybil problem?
Make people pay for each vote. –> Proof of Work
polynomial time
An algorithm is polynomial (has polynomial running time) if for some 𝑘,𝐶>0, its running time on inputs of size 𝑛 is at most 𝐶𝑛𝑘. Equivalently, an algorithm is polynomial if for some 𝑘>0, its running time on inputs of size 𝑛 is 𝑂(𝑛𝑘). This includes linear, quadratic, cubic and more. On the other hand, algorithms with exponential running times are not polynomial.
What are the assumptions of a fair coin issuance?
- Start with zero coins in the system
- reward voters with freshly generated coins for supporting the network
- reduce issuance over time to approach a fixed maximum (period halvings)
current estimated total hashrate
213 EH/s
How often is the difficulty adjusted?
Every 2016 blocks
How do we calculate the new difficulty?
New difficulty = current difficulty / (time taken for last 2016 blocks / 2 weeks)
Could quantum computers find valid block hashes easily?
No. Because Bitcoin uses two SHA-256 sequentially.
Could a quantum computer crack Bitcoin wallets and steal the coins?
- Very old addresses (P2PK) use the plain public key so they are attackable via Shor’s algorithm.
- Other addresses that have never been used to send funds: addresses are themselves hashes and since breaking a hash is not feasible they are safe.
- Any addresses that have send any number of coins in the past: Sending coins requires to sign a transaction. This exposes the private key, so we are vulnerable to Shor
Shor’s algorithm
can factor large numbers in O(log(n)) instead of O(n)
Grover’s algorithm
can crack hashes O(sqrt(n)) instead of O(n)
What to do against quantum attacks?
Never reuse Bitcoin addresses.
What are mining pools?
Miners construct blocks at a lower difficulty and submit those as proof of work. When one miner actually finds a block, the hashrate statistics of all miners on the pool are used to calculate fair payouts.
Pros of a mining pool
- miners get consistent rewards
- miners don’t need to run a node
Cons of a mining pool
- pools must be trusted with the fair distribution of coins
- miners can’t choose which transactions they are mining
Largest mining pool companies?
Foundry USA,
F2Pool
AntPool
Best mining farm builds
Custom, Immersion
- -> medium to low operating expenses overhead
- -> high stability
- -> high temperature ranges work
Power supply comparison Data Center vs. Mining Farm
- data centers always have redundant power
- mining farms never have backup power since downtimes are not so important
Cooling in data centers vs. mining farms
- data centers need to guarantee that servers can run inside their rated environment. Active cooling is necessary
- mining farms use direct air cooling using outside air. Innovation in Immersion cooling
Active cooling is a heat-reducing mechanism that is typically implemented in electronic devices and indoor buildings to ensure proper heat transfer and circulation from within.
Unlike its counterpart passive cooling, active cooling is entirely dependent on energy consumption in order to operate. It uses various mechanical systems that consume energy to dissipate heat. It is commonly implemented in systems that are unable to maintain their temperature through passive means.
What is immersion cooling?
Immersion cooling is an IT cooling practice by which IT components and other electronics, including complete servers and storage devices,[1] are submerged in a thermally conductive but electrically insulating dielectric liquid or coolant. Heat is removed from the system by circulating relatively cold liquid into direct contact with hot components, then circulating the now heated liquid through cool heat exchangers. Unlike many other applications, water cooling cannot be used as normal water is electrically conductive and will break electronic components.
Networking in DC vs mining farms
DC: Complex firewall, glass fibre
mining farm: Low bandwidth requirements
Security in DC vs mining farms
DC: high
mining: low only perimiter
Calculating electricity usage
hashrate * efficiency = power hashrate is 213 EH/s average efficiency = 57 J/TH = 57 MJ/EH --> 213 EH/s * 57 MJ/EH = 12141 MJ/s = 12.1 GW .2% of global electricity usage
What growth can we still achieve?
26% growth until spring 2024.
Equilibrium is at about 15.32 GW
CO2 impact by source
around 25% gas, 35% coal, rest renewables.
Annual CO2 emissions are 44Mt –> around .08% of global emissions.
Are renewables cheaper than fossil fuels for bitcoin mining?
Yes because mining is done is sparsely populated areas
–> Miners participate in various load management plans worldwide to provide flexibility as a service.
when is a block valid?
When it’s hash is smaller than 2^224/difficulty
new difficulty =?
current difficulty / (time for last 2016 blocks / 2 weeks)
ASIC 110nm vs ASIC 3cm
1000 J/TH
15 J/TH
Miner hardware currently
66% Bitmain
power =
hashrate * efficiency
When is mining equilibrium reached?
when total costs approach total revenue.
