Okay so what happens if bitcoin dies and then everyone starts mining monero? Wouldn’t they also develop specialized mining equipment like ASICs that eventually leads to mining centralization?
Discussion
The most efficient machine to mine Monero is a CPU. That's the way the algorithm is designed. It does multiple different things so that one single machine can't do everything like that.
If monero saw mass adoption, more people would mine it. The demand for monero would lead to more specialized “CPUs” that mine more efficiently than the CPU in your computer. I’m sure a newer generation intel CPU is more profitable than an older generation right?
Right, but if you're going to design a CPU that can mine Monero better, you might as well just release it to the public so that everybody can run it in their laptops and shit like that. bitmain claimed to make an ASIC, but its actually nothing more than a bunch of CPUs in a single box.
Play this out to its logical conclusion. You release this to the public and then the people with older and ordinary CPUs become obsolete. Eventually a similar company to bitmain makes even more specialized and efficient miners for monero. Maybe it’ll be called moneromain whatever. Now you can’t profitably mine with your CPU and it becomes more centralized over time as new publicly traded companies start building mining farms. So how does monero solve this problem? The only reason it isn’t a problem currently for monero is because barely anyone uses it.
Ever heard the phrase about building a better mouse trap? Since you are literally designing a better CPU you will want to sell it to the public and therefore the public will have it too and can mine Monero with it. If another company comes along and designs an even better CPU for mining the narrow, well then it will be an even better CPU and they will release it to the public so that people can use it in their laptops like gamers and shit. There is no point in doing the research and development to build a CPU specially designed for Monero Mining because if you do then you could just throw that same CPU in a gaming laptop and charge boatloads for it. Sure, I would not be surprised if large companies get a bunch of CPUs together in a warehouse and mine with them. But that doesn't mean that somebody mining on one CPU at home is going to be outdone in efficiency terms compared to them. Also, by putting a bunch of CPUs in a warehouse to mine with, the government now knows exactly where that warehouse is and can take the company's monero. Since people mine it at home, the government doesn't know whether you're using your CPU to play Call of Duty or render video or mine Monero. So there are serious disincentives towards centralizing the mining.
Why doesn’t this logic also apply to Bitcoin?
Because Bitcoin's proof of work algorithm can be much more efficiently done if you build hardware that does only that. Whereas Monero is not that way. Within Bitcoin, an ASIC is thousands of times more efficient than a CPU at doing the work. The whole idea behind RandomX is that the CPU would be the absolute most efficient device on which the work algorithm could be done.
What is randomX? How is the CPU more efficient for the algorithm?
It doesn’t explain how it works
tbf i dont know how it works, i just know that it does. Similar to the fact that I don't know how a car works, but I can get in a car and drive it across the country. It would take somebody way smarter than me to explain that. Also, I know that the Tor Project used a derivative of it for their proof of work, algorithm, for accessing hidden services.
It says in the GitHub that the i9 is more efficient than the i3 which means that there is still a way to get more efficient CPUs. That can eventually lead to centralization 🤷♂️
The better the CPU is, the better it's going to be at the algorithm. But I-9s can be purchased by regular human beings too. And they are just CPUs. So again, a government doesn't know whether you are buying an I-9 to mine Monero, or if you are buying an I-9 to render video. An Asik is a very, very specialized piece of hardware that only does one thing well, and since they are all made in China, their import could be very easily curtailed. In order to stop Monero mining, what are you going to do, ban CPUs?
So i can just build a miner that has five i9s inside it and sell it to mining businesses. Then solo mining becomes obsolete. It would then be centralized over time like it is with bitcoin. The issue isn’t that centralization leads to a ban. China banned bitcoin mining and it was pretty effective but didn’t end Bitcoin. If more countries banned bitcoin mining then the difficulty adjustment would come down and then people would eventually be able to mine on their CPUs again. I fail to see the difference in miner centralization risk for both monero and bitcoin. Centralization is more efficient. Decentralization is better but more costly. People are driven by profits so they will find ways to make things more efficient.
No solo mining wouldn't stop, because we have things like P2pool, which allow everybody to put their CPUs together into a pool, but nobody owns that pool's hash power, because you run it with your own node. Bitcoin has one too, but to my knowledge hardly anybody ever uses it. As I said earlier, I fully expect people to put 5 I9s into a box and sell it to companies to mine Monero. However, an I9 in a box that's sold to a company and an I9 in my bedroom are the same CPU. With Bitcoin, I do not have a fair chance to earn any, unless I buy thousands of dollars worth of hardware that can only do one thing. With Monero, I can earn Monero by buying a computer from Walmart. It may not be much Monero, but it will be Monero.
You don’t see how thousands of miners holding five or more i9s in each machine going online to mine would not hurt your mining rewards?
Of course it would hurt your mining rewards. But you can still mine Monero and actually get some. For 99% of people, if they try to mine Bitcoin, they will never get any at all. You've also got to consider the opportunity cost. Sure, a company could take five I-9s in a box in Mind Monero with them. But is there something more profitable that they could be doing with them? Maybe like running a virtual server provider or something? A company would have to weigh the opportunity cost of mining versus doing something else with those CPUs that may very well be more profitable.
Now take that to its logical conclusion. If monero overtakes bitcoin as the best money in the world, then mining would be the best use of that equipment. Eventually the hardware will become more specialized with maybe ten i9s or twenty.
It’s an interesting concept and monero clearly has the benefit of seeing some of the flaws in bitcoin early on. But efficiency leads to centralization.
Mining centralization isn’t as big of a problem in bitcoin as people think though. The miners don’t control the protocol. It will be interesting to see what happens when these big mining companies start censoring transactions. I expect it will happen at some point.
Would it be the best use of the equipment though? Just as a personal level, my computer could run 10 virtual machines easily as a VPS host. Each VPS would go for anywhere between 25 to 30 mXMR/mo and so, by using my equipment for a VPS host, I would be making 250 to 300mXMR/mo. Now, by mining, my equipment makes me about 30mXMR/mo. Why do I not stop mining on my computer and become a VPS host? Easy, because nobody knows who the fuck I am and who's going to trust somebody who they have no idea who they are to host a VPS for them. They won't. They will go to a place like digital ocean instead. So a company that has a computer with five i9s in it could mine with them or they could become a VPS host and make a hell of a lot more money something like 5x more money. It just doesn't make financial sense.
In this scenario, we are assuming bitcoin is gone. So i would be expecting the price of monero to shoot up to tens of thousands of dollars as it sucks in the capital that was in bitcoin. And i think VPS services would be done on i8s or other older CPUs because it’s difficult to justify the opportunity cost. But even if you continued to use your i9 for VPS services, it would not earn as much as it would if you were mining.
But even if we put all that aside. What happens when the demand for more CPUs for mining grows? New gen models will come out. So you’ll have the i10 then work your way up: i11 i12 i13 etc. Eventually these new models will be so expensive and powerful, that ordinary consumers will not be able to afford it or have any need for it. The market would look a lot like the asic market.
Idk these are all very interesting concepts. Monero seems to work optimally with the number of users it has today. And maybe it’s better like that. I don’t think it functions well as a store of value because you can’t audit the supply and i don’t think it can scale without suffering to centralization because there is no blocksize limit. But this was an interesting conversation and i approach your time. Most monero people just shill privacy like that is the only thing that matters.
I agree. You really made me have to think and that's something that you don't get a lot online. I wonder if we're already approaching the point where regular people don't need the kind of CPUs that are coming out as is. There also becomes a question of just how much more efficient can we really make a CPU because eventually we're going to get to the point where quantum physics causes particles to just jump logic gates and you can't make them any smaller and therefore can't put any more transistors on a chip. From what I understand, we are already rapidly approaching that limit even today.
How long will it take to earn enough Monero to pay for the computer and the electricity to run it?
You would have more Monero if you just bought it rather than a computer. You'd never mine more Monero with that computer than you'd have by just buying Monero rather than a computer.
Unless you're paying less than seven cents a kilowatt for your electricity, you'll always be better off buying any crypto, not just Monero, than mining it, even if you already own mining equipment.
I know there are people that are mining at a loss to 'help the network', which is nothing more than giving their money to a multi-national energy corporation rather than just buying crypto for themselves. Idiots.
Exactly. You don't buy computers to mine Monero with. You buy a computer to play Quake or Call of Duty or something like that. And when you're not using it for that purpose, you mine Monero with it. The computer used to mine Monero is the computer you already have.
But, you'd still lose money because it'll cost you more to mine it, than to buy it.
Doesn't matter if your computer is sitting idle. You're literally just giving money to multi-national corporations that pay no taxes and are happy to kill you.
Why are you supporting multi-national corporations? Why are you telling people to give money to them rather than buying Monero?
I don't understand your motivation here? Do you want more people to buy Monero, or give their money to corporations, because that's all you're doing is putting money in their pockets and short changing Monero users.
It's like, you're pretending to support Monero or Crypto, but what you're really doing is just telling people to buy overpriced electricity rather than Monero.
You're 'advice' is literally bad for Monero but ensuring that Monero is not economically viable.
I think you're a Psyop shill account that's actually trying to harm Monero.
Or, just learn some maths, quantitative methods and some basic economics and stop giving people bad advice.
Well, somebody needs to secure the network, so there needs to be at least some people mining it. But yes, you are definitely right. It is more efficient just to buy the Monero instead. I mine a little bit myself, knowing that I'm not going to profit off of it, but just contributing my hash rate to the security of the network. But most of my monero, I purchase. Eventually, I would like to see a world where you could just get paid for your work in Monero and it was a normal thing instead of having to purchase it on an exchange and deal with capital controls, fiat, shit coins. You know, I don't think I have ever been called a psyop before. That's a new one for me. I generally see myself as the most anti-psyop person you will probably ever meet. LOL. My friends all think I'm into like conspiracy theories and shit because I always say the government is out to hurt people. I am also highly interested in personal privacy and people look at me like I'm nuts.
Well, you're not helping the network, you're hurting it. Why don't you do some actual research, learn some basic economics and how the modern monetary theory actually works.
Because all you're demonstrating is a complete lack of education and understanding of the systems you say you're working against, as you commit your time, equipment, money to working for them because you have no clue what you are doing.
You're literally working for, and enriching the very corporations you say you hate. And worst still, is you're trying to convince others to do the same and give their money to greedy corporations.
How is any of that helping anyone other than corporations? You've fallen for corporate propaganda and you are feeding the beast.
So, you're either ignorant, or a Psyop?
Ignorance can be fixed by a vist to your local library. Start with Adam Smith's book The Wealth of Nations.
If you're going to fight against a system, you absolutely must first learn in extreme detail, how that system works.
