Schedule
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Project 2, Part 1 is due Sunday, 22 February.
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Quiz 2 will be in class on Wednesday, 25 February. It will be similar in length, format, and content to Quiz 1 (except will cover material from the beginning of the class through
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Continue thinking about project ideas!
If you download the slides, they are present though. Hopefully, the player will be fixed someday.
Mining Model
Mining Harware on the market today: Spondoolies SP20 (this is just an example, certainly not a commercial endorsement!)
Hash rate: 1.7 TH/s
Power use: 1200 W
BTC Price: US$ 240
Difficulty: 44455415962 # from https://blockchain.info/stats, 18 Feb 2015
This spreadsheet has lots of information about bitcoin difficulty over time.
Super Simple Model
>>> expected_hashes / (1.7 * 10**12)
112314445.6981567 # expected seconds to find block
>>> _ / (60 * 60 * 24)
1299.935714099036 # days to find block
>>> block_value = 240 * 25
>>> earnings_per_year = block_value * (365.25 / 1300)
>>> earnings_per_year
1685.769230769231
````
Why is this estimate of expected earnings totally broken?
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### Better Model
Python code (excerpted below): [mining.py](|filename|./mining-simple.py)
```python
def guess_difficulty(month):
return difficulty * ((1 + rate_of_difficulty) ** month)
hash_rate = 1.7 * 10**12 # 1.7 Th/s
hashes_in_month = hash_rate * 60 * 60 * 24 * ave_days_in_month
block_value = 25 * 240 # assumes fixed BTC value
electricity_cost = (1.2 * kWh) * 24 * ave_days_in_month
def expected_revenue(month):
success_probability = find_target(guess_difficulty(month)) / 2**256
return block_value * hashes_in_month * success_probability
def cumulative_income(months):
income = 0.0
for month in range(months):
income += expected_revenue(month) - electricity_cost
return income
Given this model, when should the miner be turned off and turned to scrap?
Bitcoin core code: GetBlockValue, ChainParams
What should happen to the bitcoin difficulty when subsidy is halved after block 420,000? (Current block is 344,044 so we should reach block 420,000 in (420000-34400 / (6 * 24)) = 527 days.)
Mining Pools
How can an open mining pool fairly determine miners share of the reward? Why is it not sensible to use actual blocks mined to estminate pool share?
What are the risks of a mining pool controlling a large fraction over the hashing power? Does anything dramatic happen when that fraction exceeds 50%?
Links
What Happens At Armageddon? (Ittay Eyal and Emin Gün Sirer, 13 June 2014)
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