Hi Lucas,
I would question the assumption inherent in the problem statement. Setting
aside variance discount, proximity premium, and questions of relative
efficiency, as these are presumably already considered by the miner upon the
purchase of new equipment, it’s not clear why a loss is assumed
I agree, thanks.
FWIW I’ve never been a fan of the ‘reject’ message, or its implementation.
https://github.com/bitcoin/bips/wiki/Comments:BIP-0061
e
> On Oct 18, 2019, at 18:46, David A. Harding wrote:
>
> On Thu, Oct 17, 2019 at 01:16:47PM -0700, Eric Voskuil via bitcoin-dev wrote:
>> As th
On Sun, Oct 20, 2019 at 12:29:25AM +, SomberNight via bitcoin-dev wrote:
> waxwing, ThomasV, and I recently had a discussion about implementing
> SNICKER in Electrum; specifically the "Receiver" role.
That'd be awesome!
> As the referenced section [0] explains, the "Receiver" can restore
> f
> On Oct 20, 2019, at 10:10, JW Weatherman wrote:
>
> I think the assumption is not that all miners are unprofitable, but that a
> single miner could make an investment that becomes unprofitable if the hash
> rate increases more than he expected.
This is a restatement of the assumption I que
So we are talking about a miner insuring against his own inefficiency.
Furthermore a disproportionate increase in hash rate is based on the
expectation of higher future return (investment leads returns). So the
insurance could end up paying out against realized profit.
Generally speaking, insur
Hi Lucas,
This can all be inferred from the problem statement. In other words this
doesn’t change the assumptions behind my comments. However this is an
unsupportable assumption:
“Difficulty would only go down in this case at the end of life of these
equipment, if there isn't a new wave of eve
Hi Lucas,
You are assuming that all miners operate at equal efficiency. The least
efficient miners are expected to drop offline first. Even with identical
hardware and operational efficiency, the necessary variance discount and
proximity premium create a profitability spread. The relation betwe
I think the assumption is not that all miners are unprofitable, but that a
single miner could make an investment that becomes unprofitable if the hash
rate increases more than he expected.
Depending on the cost of the offered insurance it would be prudent for a miner
to decrease his potential l
Oh, I see your point.
However the insurance contract would protect the miner even in that case. A
miner with great confidence that he is running optimal hardware and has optimal
electricity and labor costs probably wouldn't be interested in purchasing
insurance for a high price, but if it was c
Hi, guys.
Thanks a lot for taking the time to read and discuss my post.
I definitely wasn't clear enough about the problem statement -- so let me
try to clarify my thinking.
First, the main uncertainty the miner is trying to protect against isn't
the inefficiency of his new equipment, but how mu
Sorry, Eric, but I think you're completely missing the point.
It has nothing to do with sunken cost -- but the fact that the mining
equipment is good for nothing else other than performing hashing operations.
As long as someone can get paid more than they spend to keep the equipment
running, i.e.
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